UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549
                              ___________________

                                FORM 10-KSB/A/3

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

                    For The Fiscal Year Ended June 30, 2000

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

           For The Transition Period from _______ to_______ ________

                        Commission File Number  0-29351

                               HYBRID FUELS, INC.
                             ---------------------
          (Name of small business issuer as specified in its charter)

              NEVADA                                   88-0384399
       -------------------------------          ------------------------
    (State of incorporation)               (IRS Employer Identification No.)

           #214-2791 HWY 97 N, KELOWNA B.C.,                 V1X 4J8
   -----------------------------------------              --------------
         (Address of Principal Executive Offices)           (Zip Code)

Issuer's Telephone Number (250) 764-0352

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

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

Indicate by check mark whether the registrant (1) has 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 last 90 days.  Yes [X]  No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.      [X]

The number of shares outstanding of the registrant's common stock as of June
30, 2000 is 16,523,600

Amount of revenue for most recent fiscal year   $0.00

DOCUMENTS INCORPORATED BY REFERENCE
The Articles of Incorporation, Bylaws and a specimen stock certificate are
incorporated by reference in Part III, Item 13.


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                              TABLE OF CONTENTS

PART I...........................................................Page 3

 Item 1.   DESCRIPTION OF BUSINESS...............................Page 3

 Item 2.   DESCRIPTION OF PROPERTY...............................Page 9

 Item 3.   LEGAL PROCEEDINGS.....................................Page 9

 Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...Page 9


PART II .........................................................Page 9

 Item 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND
           RELATED STOCKHOLDER MATTERS...........................Page 9
 Item 6.   MANAGEMENT DISCUSSION AND ANALYSIS OR
           PLAN OF OPERATION.....................................Page 12

 Item 7.   FINANCIAL STATEMENTS..................................Page 18

 Item 8.   CHANGES IN OR DISAGREEMENTS WITH ACCOUNTANTS..........Page 30


PART III ........................................................Page 30

 Item 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
           PERSONS...............................................Page 30

 Item 10.  EXECUTIVE  COMPENSATION...............................Page 31

 Item 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
           OWNERS AND MANAGEMENT.................................Page 32

 Item 12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS....Page 32


 Item 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
           8-K...................................................Page 32













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                                   PART I

ITEM  1.  DESCRIPTION  OF  BUSINESS.

This is the first report required to be filed by the Company since it became a
fully reporting company on April 7th, 2000.  It is late filed as a result of
difficulties the Company has had in obtaining audited financial statements.

This Form 10-KSB contains forward-looking statements. The words "anticipate",
"believe", "expect", "plan", "intend", "estimate", "project", "could", "may",
"foresee", and similar expressions identify forward-looking statements that
involve risks and uncertainties. You should not place undue reliance on
forward-looking statements in this Form 10-KSB because of their inherent
uncertainty. The following discussion and analysis should be read in
conjunction with the Financial Statements and Notes thereto and other financial
information included in this Form 10-KSB for the year ended June 30, 2000.
Actual results could differ materially from the results discussed in the
forward-looking statements.

The Company is a developmental stage company that has had no income since the
acquisition of the hybrid fuels technology in June 1998. Until such time as the
Company sells an ethanol plant or otherwise earns revenue, necessary financing
will be obtained from loans or the sale of securities. If the Company is unable
to obtain funds from external sources, it will not be able to pursue it's
program and it is probable that it will be unable to continue to operate in the
long term. It is uncertain as to when it will develop any significant cash
flow.

The technology which is the basis of the Company's intended business is
designed to provide farm scale hybrid fuel production plants to farmers which
integrate the production of an ethanol based hybrid fuel with an animal
finishing operation.

The hybrid fuels technology which the Company acquired in a reverse takeover in
June 1998, has been developed over more than a decade. After early testing of
the various proprietary components in Kelowna, B. C., a prototype facility was
built at Dalem, near Drumheller, Alberta, Canada, in 1994. That facility proved
the basic concepts, but was not properly designed and thus not economically
viable and was therefore shut down and dismantled. Buildings were re-designed,
some equipment was modified and existing technology was adapted to improve some
stages of the process.

In 1998, a new plant was constructed near Cardston, Alberta. Before that plant
could begin operating, the farmer sold the land and removed the buildings and
equipment.  Although the plant never operated, much was learned from the
construction. That information has been used to refine the design which is
expected to reduce construction costs and improve operating efficiency. A plant
will consist of a barn in which the cattle are kept and a second building
housing the gasifier and the ethanol making equipment. The manure and used
bedding would be pushed into an auger that would take the waste material to the
gasifier to be burned. The ethanol making equipment consists of feedstock
handling and preparation tanks, fermentation tanks, water tanks, separation
columns, necessary pumps and tanks to hold the hybrid fuel.




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As a consequence of the Cardston plant being dismantled, there are no
prototypes in existence at this time. It is expected to cost less than $500,000
CDN ($325,000 US) for all anticipated development costs and to complete
construction of the first plant and operate it until it begins to generate cash
flow. Construction will start as soon as money is committed and is expected to
take about two to three months to complete. As it takes about 100 days to
finish the animals, cash flow from the sale of finished beef is expected to
begin 3.5 to 4 months after the plant starts operating. Although the process is
for sale now, the applicants wish to see an operating plant before committing
so revenues from sales are not anticipated until after the demonstration plant
is operating.

The farm operator supplies the feedstock, cattle, straw, electricity, diesel,
surfactants and approximately 2500 to 3000 gallons of water per day. The
operator will need to supply about 38,000 bushels of feedstock such as barley
or corn, per year, which will feed 200 cattle on a continually rotating basis.

The ethanol making process begins with treating the feedstock with an
un-patented proprietary process, that is only commercially available as a part
of whole Hybrid process. Certain commercially available enzymes which are
expected to cost the operator less than $50 per month are used in the process.
The process is carried out in the feedstock preparation tanks which are part of
the whole plant. This process upgrades the feed value of the feedstock by
breaking down some of the internal barriers to digestibility. The feedstock is
then fermented and the resulting "beer" is distilled to make the ethanol.
Making the "beer" removes some of the sugars and carbohydrates and further
improves the digestibility of the feedstock, leaving a very high protein mash,
called distillers grain, and liquid, called stillage water. Both are fed to the
cattle which eliminates the cost of drying the grain and transporting it to the
animals. The ethanol is mixed with a small amount of emulsifier and diesel in
the vaporization column to "de-nature" it, so there is no pure ethanol
accessible in the plant.

Typical beef operations produce manure and bedding which are expensive to
dispose of and cause tremendous groundwater contamination. The Company's
technology employs a gasifier, which burns high moisture manure and used
bedding, leaving no residual waste. The heat from the gasifier is used to heat
the grain and water and speed up the fermentation and distillation process that
creates the ethanol.  Excess heat can then be used to supply heat to other
buildings or a greenhouse if desired. The result is a virtually odor-free
disposal of waste that eliminates ground and groundwater contamination and
creates an energy resource that supplies the majority of the energy needs of
the ethanol plant. Because of the small amount of external energy required to
operate these plants, they are called "Micro Energy Food Factories" or MEFFs.

By burning the manure and bedding straw in the gasifier, the media in which
disease would usually grow is significantly reduced. In most conventional beef
feedlots, antibiotics are fed to the animals to prevent them from becoming
sick, growth hormones and steroids are implanted or fed to increase weight
gains and toxic chemicals are used to kill flies and to protect the animals
from other pests that might interfere with weight gains. To the extent that the
antibiotics, hormones and toxic substances remain in the meat, they are
ingested when consumers eat the end product.




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In the Company's plants, the animals are kept in a warm, dry and clean
environment and toxic chemicals are not required to keep them free of flies and
parasites. The enriched feed produces high conversion rates of approximately
one pound of beef for every seven pounds of grain without the use of steroids
or hormones. Conventional beef finishing operations may use as much as 16
pounds of grain for every pound of beef, with the use of hormones or steroids.

The MEFFs are operated manually so that trained people are in contact with the
animals several times a day. Thus, the operator can detect any illness or
disease early, separate any ill animal from the rest of the herd, and treat it
for that specific illness rather than giving a general course of antibiotics to
all the animals as a precautionary measure. As a result, antibiotics are only
used as required on any sick animal.

Each MEFF is designed to run in a balanced state, producing 200 Imperial (240
US) gallons of ethanol and enough food for 200 cattle per day. The cattle are
started between 600 and 1000 pounds and finished to about 1150 to 1400 pounds.

The synergy and balance between the various components of the process yields
significant benefits for the whole. Every effort is made to use every resource
as beneficially as possible with the view to reducing pollution and generating
the greatest economic benefits from all resources.

The hybrid fuel is an extra revenue source at very low cost to the operator and
is considerably more effective in reducing particulate and nitrogen oxide
emissions from diesel than any other diesel mixture of which the Company is
aware. For example, a diesel/water mix tested by Elf Acquitane and retired MIT
Professor, Keith Johnson, reduces particulate emissions by 45% and NOx by 15%,
compared to the results of Hybrid's mixture which reduced those emissions by
over 65% and 22% respectively. In addition to reducing pollution this hybrid
fuel could possibly extend our known reserves of fossil fuels.

The Company intends to purchase the resulting chemical mixture from each plant,
and transport it to mixing plants for further mixing of the hybrid fuel. The
plan is to then sell the hybrid fuel to end users and distributors.

The data regarding the beef referred to in this report and the Form 10SB is
extrapolated from the actual results of test trials at the Dalem facility in
1994. When the plant was closed, most of the records were destroyed or lost. In
the one test trial we have a record of, kill date September 23, 1994, 123 head
of heifers that were very poor range stock, produced finished animals which
averaged excellent weight gains of 3.94 pounds per day, without the use of
hormones, steroids or antibiotics. The extraordinarily high packout grade was
62% AAA, 34% AA and 4% A. Conversion rate from live weight to carcass was 2%
above the industry average. There was no death loss, no liver damage and none
were condemned. This first lot brought the highest price of the day at auction
and the processing results were so good that the purchaser offered a premium of
$0.10 per pound FOB the plant for all animals that could be produced using this
process. The other trials demonstrated similar results and the Company
therefore sees no reason why operators could not achieve as good  results if
the system is followed, or better results if good beef cattle are used.

Weight gains of just under four pounds per day are a significant increase
over the average for the industry, according to the statistics published by
the Illinois FBFM Association.  Their statistics show industry average weight
gain is 3.5 pounds per day, with the use of hormones, steroids and
antibiotics.
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In direct discussions with feedlot operators, the Company has been told that
they are happy if they average three pounds per day and most feed and/or
implant hormones, steroids and antibiotics in order to achieve those gains and
prevent animals from dying.

EMPLOYEES

Since his appointment on June 28, 1999, Clay Larson has been the President,
Secretary, the only Director and only employee of the Company. He is entitled
to a salary of $6000.00 per month which is deferred until the Company has money
to pay him. The Company does not have a written employment contract with Mr.
Larson. The Company does not intend to hire any other employees for the
immediate future. For the short term, until resources permit, the majority of
services will be supplied by paid consultants, contractors or commissioned
salespeople.

SIGNIFICANT CONSULTANTS

Sir Donald Craig is the individual who is most responsible for the development
of the concepts and invention of much of the equipment or improvements to the
equipment. Mr. Craig is expected to supervise the building of the first plants,
refining the system, and supervise the preparation of the training and
operations manuals. He has agreed to donate his time without remuneration until
the first plant is built, operating and generating cash flow.  Thereafter, he
may provide consulting service as needed at mutually agreeable prices. The
Company intends to pay Mr. Craig's Company related expenses.

SUPPLIERS

The Company is not dependent on a limited number of suppliers as most of the
equipment and materials required for the plants are readily available in all
areas where the Company expects to be operating. The Company plans to contract
for the supply of raw materials, and with independent contractors, who have a
verbal arrangement with the Company, for the manufacture the columns and
separators as necessary, on the basis of an agreed-upon amount for each item.
These independent contractors work from their own premises and have the
capacity to supply all of the items required by the Company for the next 12 to
24 months.

The Company intends to seek quotes from independent contractors to supply and
install the buildings, the flooring materials, pumps, tanks and other "off-
the-shelf" items required for each plant.  As the Company develops a history of
operations and experience with particular sources of supply, the Company may
enter into exclusive supply contracts in the future if it is advantageous to
the Company and its operators. No such arrangements are being negotiated at
this time.











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GOVERNMENTAL REGULATION

Each plant will require some form of government permit in order to operate. In
the United States, the Bureau of Alcohol Firearms and Tobacco is the
appropriate agency and they have verbally indicated to the Company that it
would be able to obtain the appropriate permits. In Canada, the appropriate
agency is Excise Canada which has taken the position that since the plants
produce ethanol, each will require a distillers license.  This would require
the installation of equipment in each plant which would measure the amount of
alcohol.

Unfortunately that equipment will not work because the ethanol is denatured by
the addition of diesel and the emulsifier in the column which means that it is
impossible to detect, access or measure any pure ethanol in the process. The
Company is therefore seeking an exemption for its operations and has enlisted
the assistance of a number of people and politicians to assist in persuading
Excise Canada to issue the necessary exemption.  Until such an exemption is
made, the plants may be built without the ethanol equipment. The operators of
these plants would pay lower royalties until their ethanol equipment was
installed. The feedstock enrichment process would still be used which is
expected to produce better than average weight gains. If there are significant
delays in obtaining the desired exemption, the Company anticipates that it will
commence building plants in the U.S. The prototype plant will have the ethanol
making equipment and is expected to operate with a special permit.

COST AND EFFECTS OF GOVERNMENTAL REGULATION

Governmental regulation will affect the Company most in the areas of compliance
with environmental regulations and those regarding the production of ethanol.
Each jurisdiction will require the Company to obtain the appropriate permits to
comply with its specific set of regulations. The Company plans to initially
build in those jurisdictions where the process for obtaining the necessary
permits to produce the hybrid fuel and to operate in accordance with these
regulations, are the easiest and least expensive to comply with. The Company
anticipates it will have little difficulty in complying with environmental
regulations as the process which the Company uses does not create any
pollution. In fact, the Company believes that this is likely solve many of the
pollution problems that are associated with beef finishing operations. The
Company does not anticipate any significant delays in obtaining the necessary
permits for the production of the hybrid fuel in the Province of British
Columbia and in most states of the US.

TARGET MARKET AND ADVERTISING

The Company's target market for the sale of the MEFFs is the farming
communities. The Company intends to advertise its MEFFs in trade journals,
local newspapers, on radio and television programs, and through seminars and
presentations at trade shows.  The Company is also in contact with a number of
government agencies and industry organizations whose role it is to locate and
promote new opportunities for the economic benefit of farmers.

There appears to be very strong interest in the Company's project from the
farming community. Even though we have not been advertising, to date the
Company has received applications from more than fifty farmers, and we receive
more phone calls each month.


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The Company is expecting to have a screening process in place and at least four
candidates approved before the first MEFF is ready to operate. These
individuals will need to qualify for financing in accordance with the
requirements of the particular financial institution. Financing will have to be
committed before the Company would start construction. It is anticipated that
the first operators will be fully trained and qualified by the time the second
MEFF is finished and ready to operate.

COMPETITION

The production of food and fuel are both highly competitive. Giant companies
compete in both markets with significant competitive advantages that make it
difficult for smaller operators to survive and prosper.  Many competitors of
the Company have significantly greater resources and experience than the
Company.  Additionally, competitors of the Company may have better access to
financial and marketing resources superior to those available to the Company.
With the resources and name recognition that competitors possess, the Company
may face severe adversity entering the markets it is pursuing.  There is no
assurance the Company will be able to overcome the competitive disadvantages it
will face as a small, start up company with limited capital.

The Company is not aware of any competitors who offer farm scale feedlot-fuel
plants, although there are several competitors who produce ethanol and other
fuels on a very large scale basis.

The Hybrid Fuel Market.

Major oil and petroleum companies as well as alternate energy companies will
all be competitors of the Company.  The Company anticipates that the quality of
its hybrid fuel product combined with the potential of significantly reduced
environmental impact in both producing and using the hybrid fuel may provide a
competitive advantage.

The Company intends to market the hybrid fuel to both end users and diesel fuel
distributors encompassing all industries. Initially, the Company intends to
target the trucking and railway industries. Because the hybrid fuel can be used
in an unaltered diesel engine, it can be used economically where it is
available and no modifications or changes need be made to engines to switch
back to regular diesel fuel when the hybrid fuel is not available.  There is
research done by others which quantifies the environmental benefits and safety
of a mixture similar to the Company's. As regulators work to decrease engine
emissions and users look for less expensive fuels that burn cleaner, the
Company believes it will be able to attract users for the hybrid fuel.

The Food Market.

The production of beef, pork, poultry and dairy products has become focused on
giant facilities. In these "factories", antibiotics are used to prevent the
animals from becoming sick, growth hormones are implanted or fed to force
weight gains and toxic chemicals are used to kill flies and to protect the
animals from other pests that might interfere with productivity.

When consumers eat the end product, they ingest the antibiotics, hormones and
toxic substances which remain in the meat. More and more consumers are becoming
concerned about the adverse effects on their immune systems of this constant
barrage of chemicals, antibiotics and growth hormones. Research has shown
direct links between the increasing incidence of a number of diseases such as
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cancer and respiratory diseases to the consumption of meat, dairy products and
other foods which contain antibiotics, hormones and toxic chemicals.

The Company plans to promote the beef as being "organic", free of hormones,
antibiotics and other toxins.  As consumers become more selective about eating
"clean" meat, the Company anticipates capitalizing on these products being free
of these substances. The Company also intends to "brand" the finished product
with a name, trade marks and logos (not yet selected) to make the product more
easily recognizable in order to generate consumer loyalty and capitalize on
brand quality. Other marketing strategies which the Company intends to
consider, in due course, include our own retail co-op.

Item 2.  DESCRIPTION  OF  PROPERTY

The Company maintains an office at #214-2791 Hwy. 97N, Kelowna, British
Columbia, Canada. The rent on this office is currently being paid by a related
party. The Company also has an office at #302-855 8th Avenue S.W., Calgary,
Alberta, Canada. This office and its operating expenses are currently being
supplied by shareholders at no cost to the Company. Both properties are owned
by parties that are not related to the Company or it's Director, or any of it's
affiliates.

In addition, the President maintains an office in his home at 740 Westpoint
Court, Kelowna, British Columbia, Canada at no cost to the Company.

Item 3.  LEGAL PROCEEDINGS

No legal proceedings are threatened or pending against the Company or any of
its officers or directors.  Further none of the Company's officers or directors
or affiliates of the Company are parties against the Company or have any
material interest in actions that are adverse to the Company's interests.

Although the Company is not involved in any legal proceedings, several issues
may eventually lead to the Company instituting legal action to recover
improperly issued shares of the Company and to recover unauthorized payments.
For details of these legal issues that may arise in the future, see Note 7 to
the financial statements.

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

         None.


                                  PART II

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

The Company has authorized capital of 50,000,000 share of common stock with a
par value of $0.001, of which 16,523,600 were issued and outstanding as at June
30, 2000. For more information regarding the stock, see the Consolidated
Statement of Change of Stockholders Equity and Note 6, Stockholders Equity, in
the Financial Statements.





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The Company's common stock is traded in the National Quotation Bureau "Pink
Sheets" under the symbol "HRID."  The following table sets forth the high and
low closing bid prices for the periods indicated, as reported by the National
Quotation Bureau.

                               HIGH           LOW
                               ----           ---
                                      1998
                                      ----
              3rd Quarter      5.00           1.75
              4th Quarter      2.00           0.375

                                      1999
                                      ----
              1st Quarter      3.00           0.875
              2nd Quarter      2.625          0.875
              3rd Quarter      2.00           0.50
              4th Quarter      0.75           0.125

                                      2000
                                      ----
              1st Quarter      3.00           0.50
              2nd Quarter      1.875          0.50

The Company has never paid cash dividends.  The Director of the Company
currently anticipates that it will retain all available funds for use in the
operation of the business and does not anticipate paying any cash dividends in
the foreseeable future.

RECENT  SALES  OF  UNREGISTERED  SECURITIES.

     1.   Date, title and amount of securities sold

             Date                     Title                 Amount
             ----                     -----                 ------
             May 29, 1998           Common Stock        12,000,000 shares
             August 4, 1998         Common Stock         1,000,000 shares
             September 10, 1998     Common Stock             2,400 shares
             November 24, 1998      Common Stock            21,200 shares
             March 23, 1999         Common Stock           900,000 shares
             September 7, 1999      Common Stock             5,000 shares
             October 8, 1999        Common Stock            15,000 shares
             January 3, 2000        Common Stock            29,050 shares
             February 7, 2000       Common Stock            22,730 shares
             March 17, 2000         Common Stock            13,040 shares
             June 29, 2000          Common Stock            53,400 shares

1. The May 29, 1998 issuance was an exchange of shares whereby the Company
acquired Hybrid Fuels, U.S.A., Inc. and Hybrid Fuels (Canada)Inc.

2. The August 4, 1998 and March 23, 1999 issuances are contested by the Company
as the shares were issued without consideration.  The Sole Director passed
resolutions and the transfer agent canceled the shares.

3. The September 10, 1998 issuance was for cash of $3,600.00 upon which no
commissions were paid. The November 24, 1998 issuance was for cash of
$10,000.00 upon which no commissions were paid. These shares were issued by
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Page-11-

3.(con't) the former President. It is believed that they were sold to
accredited investors, however the Company has no documentary evidence of that.

4. The March 23, 1999 issuance is contested by the Company as the Shares were
issued without consideration. The Director passed a resolution and the transfer
agent cancelled the shares.

5. The shares issued September 7, 1999, October 8, 1999, January 3, 2000,
February 7, 2000, March 17, 2000, and June 29, 2000 were all made in
consideration of shareholders not exercising their right of rescission arising
from an Offering Memorandum issued by the previous Board of Directors that
contained information that the present Director assessed as inaccurate and
requiring a rescission offer. As the Company had no funds to complete a
rescission, the Company offered restricted stock in lieu of such an offer, and
these individuals accepted that offer. The Company relied upon Section 4(2) of
the Securities Act of 1933 to effect the issuance of all shares. All shares
were issued in an isolated private transaction to "sophisticated" investors,
not involving any public solicitation or offering, with no underwriters
involved.

As of June 30, 2000 there were 253 shareholders of record of the Company's
common stock, holding 16,523,600 shares.

By an Offering Memorandum dated October 18, 1999, the Company, offered to sell
shares at $0.65 or such other price as the Director may determine to raise up
to $975,000. The Offering began in November 1999. Before the Form 10SB filed
February 4, 2000 became effective, the Company completed the offering of its
common stock pursuant to Regulation D, Rule 504.

On February 17, 2000, the Company agreed to sell 1,500,000 shares to Great
White North Inc., for $150,000. On the same day, the Company accepted a second
offer to sell 1,500,000 shares to Mido Investments Inc., for $150,000 on the
basis of a promissory note payable in 60 days.  On February 18, 2000, the
Company accepted a third offer to sell 1,500,000 shares to BA Nightclubs
International Inc., for $150,000 on the basis of a promissory note payable in
60 days.  Each offer was subject to the purchaser receiving and reviewing the
comments from the SEC with respect to the filed Form 10-SB.  Each purchaser was
an accredited investor, resident in Colorado.

Comments were received on April 14, 2000 and delivered to the purchasers.  On
June 21, 2000, the Company received $150,000 from Great White North Inc., in
return for 1,500,000 shares, in accordance with that agreement.  Mido
Investments Inc., and BA Nightclubs International Inc., were granted several
extensions of time to pay, at their request. On February 6, 2001 when they had
still not paid, the Company demanded they pay the balance by February 21st,
2001, and when they failed to do so, the Company contacted the Transfer Agent
and requested that the 3,000,000 shares be cancelled.  Should the Company need
further funds, it is likely the Company will sell additional shares of its
common stock.

The Company negotiated a further verbal commitment for a further $550,000 US
which is to be completed under Rule 506 as soon as possible after the Company
is re-listed on the OTC BB or other suitable exchange.




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Page-12-


Item 6.   MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


PLAN OF OPERATION

The twin themes which underlie our proposed business are conservation and
farming. Sir Donald Craig, the man most responsible for the development of the
hybrid process, has long been dedicated to these two themes.  He was born in
Morden, Manitoba were farming was a way of life and his first degree after high
school was in Agricultural Engineering.  He wrote his doctoral thesis on
conservation of the rainforest and developed a process for re-refining used
motor oil as a conservation measure.

Concerns about the declining number of family farms and fossil fuel reserves
along with threats of global warming, led Sir Donald to develop a process that
would return the family farm to profitability, improve the quality of food
produced using renewable resources, conserve non-renewable resources and reduce
pollution.

We have the opportunity to be proactive in reducing pollution and reliance on
fossil fuels.  We can act to protect our water supplies from cryptosporidium
and e-coli from ground contamination and MTBE from gasoline. We have the
opportunity to produce cleaner food, re-mineralize our soils, and reduce some
of the cause behind the increase in antibiotic resistant "super bugs" and
auto-immune diseases.

At the moment, the economy in North America is showing signs of slowing down.
High gas prices and energy shortages which increase costs and reduce
productivity are partly responsible.  By building MEFFs, the Company can
produce cleaner food and a supply of ethanol which will help to alleviate high
energy prices and shortages plus reduce air, ground and groundwater pollution.

In the second quarter of 2000, Hybrid found a non-operating packing plant that
was within a two-hour drive of our head office. Although the plant is less than
20 years old, and had been remodeled with new equipment added in the late
1980s, it was shut down in 1996 as a result of the owners selling part of their
business and the plant being surplus to the purchasers needs because of its
relatively small size and location.

This plant seemed to perfectly fit our intended long term program because of
its size and the fact that it meets EU specifications necessary to process beef
for shipment to Europe and the Far East. It had the additional advantage that
it would be able to start processing meat and generating cash flow as soon as
it could be certified. It could be used to process beef for both domestic and
off-shore markets from the MEFFs once they start producing and that would give
the Company control over processing quality, allow the production of value
added products plus expected reductions in processing costs, which could all
help to produce maximum return from the finished beef.

Doug Hayward, who has over 25 years in the meat business and had been the plant
manager before it was shut down, was available and has the expertise to start
the plant and manage it.  He was willing to assume the responsibilities of
getting the plant certified and operating, and the Company needed someone with
his personality, qualifications and experience, before it could contemplate
taking on such an operation.

===============================================================================
Page-13-

The Company negotiated an agreement to take possession of the plant, and get it
operating and certified by the Canadian Food Inspection Agency (CFIA). The
purchase price was $3,000,000, CDN, ($1,950,000 US) and the plant was appraised
at $4,995,000 CDN ($3,250,000 US) in 1996, on a replacement cost basis.

Financing for the purchase was projected to come from traditional lenders, and
to be secured by mortgage on the property. Before entering into this agreement,
we obtained "expressions of interest" from two financial institutions that were
conditional on the operation being able to develop strong, positive cash flow
by the end of the year.

A deposit of $250,000 CDN, was paid and it forms part of the purchase price.
The agreement, which allows the Company to operate the plant before the balance
of the purchase price was to be paid, calls for a further $150,000 deposit
before we start operating.  That operating period was necessary in order to
demonstrate cash flow from the operation as a prerequisite to the financial
institutions advancing the money to pay the balance of the purchase price.

The Company projected its cash flow requirements based on purchasing the
packing plant and not. After researching the markets for our high quality,
hormone free beef, the Issuer anticipated it could generate sufficient cash
flow from operating the plant to service the debt financing needed to purchase
it. The Company projected that it would take three to six months of operations
to generate sufficient cash flow from the sale of purchased and processed beef
to local and European markets to satisfy the financing requirements.

Relying on written commitments of equity financing from investors, the Company
made a deposit on the packing plant on June 29, 2000. For financing reasons, a
new company, Blue Mountain Packers LTD., was incorporated, to operate the
packing plant. It is intended that Hybrid will acquire all of the shares of
Blue Mountain Packers LTD., for a nominal amount and operate it as a wholly
owned subsidiary. Hybrid anticipated that between July and September, 2000, it
would need to advance between $150,000 and $200,000 CDN, ($100,000 to $130,000
US) to Blue Mountain to pay start-up costs.

The Company projected using part of the $300,000 US of equity financing to
certify the packing plant and get it operating by the end of September. Barring
large, unforeseen expenses, that money was projected to be sufficient to keep
operating until positive cash flow was achieved. The purchase agreement
provided for us to withdraw if, once we took possession, it appeared that the
costs required to start up the plant were likely to be higher than expected.

Sufficient cash flow to service the purchase loan was projected to come from
custom processing plus the processing of our own hormone free beef.  The
Company confirmed adequate supplies of both from an Alberta group that has
bison for us to process and hormone free beef that the packing plant can
purchase, process and market in North America and Europe. Our calculations
indicate that would provide sufficient positive cash flow for the packing plant
until we produce our own supply from our own MEFFs.

There appears to be a strong, lucrative market for hormone free beef in Europe.
The packing plant meets EU specifications and CFIA has advised us they can see
no reason why we would not receive the appropriate certification.




===============================================================================
Page-14-

The Company also has contacts with highly placed officers of two of the larger
Swiss meat distributing companies and they have expressed strong interest in
Canadian hormone free beef. The net return from this market is projected to be
considerably higher than from North American markets.

Other good markets where the Company has good contacts include the cruise ship
industry and a group that manages high-end restaurants.

Our research further indicates that the market for good-quality, hormone free
beef is not being filled at present even though consumers are prepared to pay
premium prices for it. Specialty shops that wish to market this beef find it
difficult to obtain sufficient supplies of the quality their customers are
prepared to pay for.  Restaurants that wish to offer specialty items of hormone
free beef on their menus have difficulty obtaining an assured supply of the
quality and quantity they require. The Company anticipates that it can succeed
financially by having the MEFFs produce this beef. Blue Mountain Packers LTD
would purchase the beef, process and market it at premium prices to all of the
markets described above.  It is anticipated that Blue Mountain Packers LTD
would operate successfully and profitably as a wholly owned subsidiary of the
Company.

If we are unable to arrange the financing to purchase the packing plant on our
own, we intend to seek a strategic alliance or joint venture partner or
partners, who have processing needs and would strengthen the financial base to
satisfy lenders.  Such "partners" may be offered shares in Blue Mountain
Packers LTD.  No such negotiations are being conducted at the moment, nor are
expected in the immediate future.

The Company believes it is necessary to get on with our program and begin
building MEFFs and producing our own hormone free beef as soon as possible,
whether or not we operate the packing plant.  As such, the Company is seeking
debt financing from a private source to allow us to construct our first MEFF.
The Company is in the process of negotiating a loan for $500,000 CDN to cover
all construction and start-up costs, plus a reserve to cover operating costs
until the MEFF begins generating cash flow. This is projected to be
approximately six to eight months from the start of construction. This plant
will be built near Kelowna, B.C., Canada, and is intended to be a Company owned
and operated demonstration, training and research facility. The lender is
expected to be given mortgage security on the plant. Construction is expected
to begin as soon as a written commitment outlining the funding conditions is
signed by both parties.

As a result of ongoing research, the Company has been advised to eliminate the
training and construction management fees. Instead, each MEFF will be sold at a
profit which is projected to be sufficient to cover all of the training,
construction, and general overhead expenses until each MEFF begins paying
royalties. In addition, the column and spinner, which are the most sensitive
pieces of the proprietary equipment, will be leased to the operator for a lease
payment based on their value. This lease payment has not yet been set. In
addition, ongoing monthly service fees will be established in the $150 to $250
per month range to cover the costs of the ongoing service and training.

The Company has investigated sources that would provide financing to the
operators for the construction of the MEFFs, in order to be able to build as
quickly as possible once operators are approved for training. One source are
the European ecological funds, which finance projects that have a positive

===============================================================================
Page-15-

environmental impact. They wish to see the first MEFF once it is operating and
assuming that it performs as expected, they have expressed strong interest in
financing the construction of the MEFFs. The Company anticipates that the MEFFs
will meet the "eco" fund requirements and they will agree to provide financing
for the operators who meet their qualifications.

In addition to the "eco" funds, two large West Coast leasing companies have
expressed  strong interest in providing financing for the operators of MEFFs
who meet their requirements. No commitments for construction of MEFFs will be
made until financing is committed.

Projecting short and long-term liquidity requirements for Hybrid is extremely
difficult, largely because we have no operating history.  In many cases it has
been necessary to make projections regarding such things as building times and
costs relying on estimates made by others. These projections are best estimates
with contingencies built in. Such forward-looking projections are inherently
inaccurate and placing undue reliance on them is inherently dangerous as actual
results may differ substantially from these projections.

As of June 30, 2000, the Company had received $150,000 U.S. from the sale of
shares.  A further $31,000 CDN was borrowed from a related party to provide
sufficient funds to make the $250,000 CDN deposit on the packing plant. Of the
$300,000 US ($450,000 CDN) yet to be received from the equity financing,
$150,000 to $200,000 CDN was expected to be loaned to Blue Mountain Packers LTD
to get the packing plant certified and operating, which was projected to take 3
to 4 months. The balance of that money, $250,000 to $300,000 CDN, was projected
to be sufficient to meet liquidity needs until the packing plant was generating
positive cash flow which was projected to take three to six months after
processing began.

The commitment from investors to provide the further $550,000 US in equity
financing was expected to give us adequate reserves in the event that it took
longer than projected to achieve positive cash flow from the packing plant
and/or the MEFFs.

For the longer term, approximately 10 MEFFs paying royalties are projected to
produce sufficient revenue to cover liquidity needs to cover all general
overhead and operating expenses and produce an operating surplus. Projections
indicate that it will take less than a year to achieve that number of operating
plants.

In the meantime, operating expenses will be kept to a minimum and no
construction will commence until funding is committed. It is anticipated that
related parties will continue to pay operating expenses until such time as
funds are received, but no commitment can be made.  If more money is required
in the next twelve months, the Company anticipates selling more stock to raise
cash.

RESEARCH AND DEVELOPMENT

Since 1998, the Company has spent $8,000 on research and development. The
majority of funds were spent on perfecting the formula for the emulsifier. The
balance of the funds were spent on testing at the British Columbia Institute of
Technology to quantify the effects of the use of the hybrid fuel in an
unaltered diesel engine.


===============================================================================
Page-16-

RESEARCH AND DEVELOPMENT (con't)

During the next twelve months, the Company anticipates expending $50,000 on
research and development with respect to the following:

1. Researching the long-term use of the hybrid fuel, particularly in extreme
temperatures; plus testing and refinement to obtain the optimum hybrid fuel
mixture.

With respect to further testing of the hybrid fuel, the Company has had
preliminary discussions with manufacturers of diesel engines and several
companies that operate large fleets of diesel powered equipment. Several have
expressed strong interest in using the fuel in their operations and providing
testing and evaluation services at no charge or significantly reduced prices.
As of this date, no contracts have been entered into.

The Company is also investigating the possibility of applying for grants from
various government agencies for support in further testing of the hybrid fuel.

2. Researching efficiencies in plant construction and operation;

3. Research of training methods and development of training and operations
manuals.

TRENDS THAT MAY EFFECT THE COMPANY'S BUSINESS

The Company has identified the following trends as potentially having an impact
on the business of the Company.

Trend toward supporting businesses which have a positive environmental impact.
The Company seeks to take advantage of this trend by providing technology that
produces a hybrid fuel which reduces diesel engine emissions. In addition, the
animal finishing operation will be promoted as having an environmentally
positive impact in that it produces no groundwater pollution and virtually no
odor.

Over the last three decades, there has been a trend toward reducing consumption
of meat generally and beef in particular.  Continuation of this trend could
have an adverse effect on the Company. However, in January 2000, Successful
Farming Online reported the first increase in consumer spending on beef since
the early 1970s.  This was an increase of 4%.  This report further says that
consumers will pay more for beef that is guaranteed good quality. This, and a
trend toward consuming healthier foods, is expected to operate to the advantage
of the Company.

Management is of the view that if overall beef consumption declines, it should
have little or no adverse effect on the Company's business as the MEFFs are
expected to produce exceptional quality beef which we anticipate marketing as
guaranteed quality beef which is hormone and antibiotic free.

Trend towards significantly increased gas prices. Within North America, there
is a trend towards significantly increased gas prices, which the majority of
commentators seem to believe will continue. One of the responses to this trend
has been the announcement by President Clinton of research programs to triple
the use of ethanol during the next ten years. The Company believes that this
initiative creates a more favorable climate for the expansion of the Company's
business.
===============================================================================
Page-17-

The United States and Canada are signatories to the Kyoto Emission Standards
Agreement which requires them to adhere to the Kyoto Protocol commitments to
reduce pollution by the year 2010. In addition, many states, such as
California, have or are considering legislation to eliminate the use of MTBE as
an octane enhancer and "clean air" additive. This should work to the advantage
of the Company, as ethanol is the additive of choice to replace MTBE. Also, the
Company plans to produce ethanol relatively inexpensively, and the proprietary
emulsifier allows the mixing of wet ethanol and diesel which reduces emissions,
without incurring drying costs.  There is a risk that there will be no market
for the hybrid diesel fuel.  However, the ethanol should still be valuable for
use in other products such as windshield washer fluid or gasohol.

Trend of governments and health regulators to mandate environmental clean-ups
and reduce pollution. In California and other states, local authorities are
implementing stricter environmental clean-up requirements, in particular
tighter restrictions on the handling of dairy waste which has been found to
contaminate ground water. The Santa Ana Regional Water Quality Control Board,
which enforces state and federal water quality standards in the Santa Ana River
watershed, recently mandated dairy farmers remove stockpiled manure and
established a new 180 day limit for new manure to be cleared from the dairies.
The Company's gasifier technology and the fuel-feed lot facilities may provide
answers to this type of regulation.

During the last two years the Company has spent zero dollars on compliance with
environmental regulations. The Company believes that the impact of the cost and
effects of the Company's compliance with environmental laws should be minimal
in the future as the Company's process is believed to be environmentally
friendly.

It must also be noted, that beef prices are especially volatile as a result of
the "mad cow" scare sweeping Europe.  The result is that beef prices generally
are expected to rise in the short term even though demand is likely to decline.
In addition, with fuel prices as high as they are and expected to go higher,
the price of ethanol is also expected to increase. Both of these trends should
work to the advantage of the operators and the Company.

As of June 30, 2000, the Company had:

1.  Outstanding liabilities in the amount of $241,291, which include deferred
salary of $108,000 owed to the President;

2.  Committed $100,000 to $130,000 for renovation and certification of the
packing plant during the next twelve months. Further capital commitments will
only be made when funding has been committed.













===============================================================================
Page-18-



Item 7.  FINANCIAL STATEMENTS

Hybrid Fuels Inc.

Index to Consolidated Financial Statements


Report of Independent Auditors.......................................F-1
Consolidated Balance Sheets..........................................F-2
Consolidated Statements of Operations................................F-3
Consolidated Statements of Cash Flows................................F-4
Consolidated Statements of Stockholders' Equity......................F-5
Notes to Consolidated Financial Statements...........................F-6-F-11










































==============================================================================
                                      F-1

INDEPENDENT AUDITORS' REPORT
To the Stockholders
and Directors of Hybrid Fuels, Inc.
(A Development Stage Company)

We have audited the accompanying consolidated balance sheet of Hybrid Fuels,
Inc. (formerly Polo Equities, Inc.) (A Development Stage Company) as of June
30, 2000 and 1999 and the related statements of operations, stockholders'
equity and cash flows accumulated for the period from February 16, 1960 (Date
of Inception) to June 30, 2000 and the years ended June 30, 2000 and 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

We previously reported on the consolidated financial statements of Hybrid
Fuels, Inc. for the years ended June 30, 1999 and 2000 in our audit report
dated April 17, 2001. We expressed a qualified opinion with respect to the
inability to audit certain unauthorized payments to former directors. We
subsequently examined additional documentation to satisfy ourselves that these
payments to former directors were in fact unauthorized and unsupported. The
Company discusses these unauthorized payments in Note 7(b) to the consolidated
financial statements. Certain other adjustments came to light during our
subsequent review of the additional information. As discussed in Note 9 to
these financial statements certain income statement items have been restated.
We therefore reissue this audit report dated September 21, 2001.

In our opinion, the aforementioned consolidated financial statements present
fairly, in all material respects, the financial position of Hybrid Fuels, Inc.
(A Development Stage Company), as of June 30, 2000 and 1999, and the results of
its operations and its cash flows accumulated for the period from February 16,
1960 (Date of Inception) to June 30, 2000 and the years ended June 30, 2000 and
1999 in conformity with generally accepted accounting principles used in the
United States.

The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company has not generated any revenues
and has conducted operations at a loss since inception. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also discussed in Note 1.
These consolidated financial statements do not include any adjustments that
might result from the outcome of these uncertainties.

MANNING ELLIOTT
CHARTERED ACCOUNTANTS
Vancouver, Canada
September 21,2001
==============================================================================
                                      F-2
Hybrid Fuels, Inc.
(A Development Stage Company)
Consolidated Balance Sheets

                                            (Restated------See Note 9)
                                            June 30,       June 30,
                                              2000           1999
                                                $              $
------------------------------------------------------------------------------
ASSETS

Current Assets
Cash                                            485            -
------------------------------------------------------------------------------
Total Assets                                    485            -
------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable                              3,111            -
Advances payable (Note 4)                    42,013            -
Shareholder loan payable (Note 5(a))        163,748          139,410
Amounts owing to a Director (Note 5(b))      74,432            -
------------------------------------------------------------------------------
                                            283,304          139,410
------------------------------------------------------------------------------
Temporary Equity (Note 6(d))                223,000          223,000
------------------------------------------------------------------------------
Stockholders' Equity (Deficit)

Common Stock (Note 6): $0.001 par value;
50,000,000 shares authorized 19,523,600
and 16,923,600 shares are issued and
outstanding respectively                     19,524           16,924
------------------------------------------------------------------------------
Additional Paid-in Capital                  162,474           15,074
------------------------------------------------------------------------------
Donated Capital - Imputed Interest
(Notes 4 and 5)                              56,735           26,000
------------------------------------------------------------------------------
Deficit Accumulated During
the Development Stage                      (744,552)        (420,408)
------------------------------------------------------------------------------
Total Stockholders' Equity (Deficit)       (505,819)        (362,410)
------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity      485            -
------------------------------------------------------------------------------
Nature of Operations and Continuance of Business (Note 1)
Contingency - Disputed Compensation (Note 7)

(See Accompanying Notes to the Consolidated Financial Statements)







==============================================================================
                                      F-3
Hybrid Fuels, Inc.
(A Development Stage Company)
Consolidated Statements of Operations



                              (Restated-------------------------See Note 9)
                              Accumulated from
                              February 26,1960         Years ended
                              (Date of Inception)   June 30,    June 30,
                              to June 30, 2000       2000         1999
                                     $                $             $
------------------------------------------------------------------------------
Revenue                              -                -             -

Expenses
------------------------------------------------------------------------------
Deposit on plant written-off
(Note 3)                           170,561          170,561         -
Other compensation (Note 7(b))     243,463            -          187,706
Executive compensation (Note 5(b))  72,000           72,000         -
Filing and regulatory fees          10,438            5,438         -
General and administration          55,976            3,045       23,090
Imputed interest (Notes 4 and 5)    56,735           30,735       26,000
Investor relations                  12,606           12,606         -
Professional fees                   68,949           22,008       39,482
Rent and telephone                  35,223            6,535       25,151
Research and development             8,000            -            3,000
Travel and promotion                10,601            1,216        3,948
------------------------------------------------------------------------------
                                   744,552          324,144      308,377
------------------------------------------------------------------------------
Net Loss                          (744,552)        (324,144)    (308,377)
------------------------------------------------------------------------------
Net Loss Per Share                                     (.02)        (.02)
------------------------------------------------------------------------------
Weighted Average Shares Outstanding              14,609,000   15,015,000
------------------------------------------------------------------------------

(See Accompanying Notes to the Consolidated Financial Statements)


















==============================================================================
                                      F-4
Hybrid Fuels, Inc.
(A Development Stage Company)
Consolidated Statements of Cash Flows
                                   (Restated-----------------------See Note 9)
                                   Accumulated from
                                   February 26, 1960       Years ended
                                   (Date of Inception)
                                   to June 30,           June 30,   June 30,
                                        2000              2000        1999
                                         $                  $           $
------------------------------------------------------------------------------
Cash Flows To Operating Activities
Net loss                                  (744,552)      (324,144) (308,377)
------------------------------------------------------------------------------
Non-cash items Shares issued for services   12,000           -         -
Other adjustment                              (502)          -         -
Imputed interest                            56,735         30,735    26,000
Deposit on plant written-off               170,561        170,561      -
------------------------------------------------------------------------------
Adjustment to reconcile net loss to cash
Accounts payable and accrued liabilities     3,112          3,111      -
------------------------------------------------------------------------------
Net Cash Used In Operating Activities     (502,646)      (119,737) (282,377)
------------------------------------------------------------------------------
Cash Flows To Investing Activities
Deposit on plant                          (170,561)      (170,561)     -
------------------------------------------------------------------------------
Net Cash Used By Investing Activities     (170,561)      (170,561)     -
------------------------------------------------------------------------------
Cash Flows From Financing Activities
Advances payable                            42,013         42,013      -
Amounts owing to a Director                 74,432         74,432      -
Shareholder loans payable                  163,747         24,338   (11,200)
Temporary equity and redeemable shares     223,000           -      223,000
Issuance of common stock                   170,500        150,000    13,600
------------------------------------------------------------------------------
Net Cash Provided By Financing Activities  673,692        290,783   225,400
------------------------------------------------------------------------------
Net Increase (Decrease) in Cash                485            485   (56,977)
------------------------------------------------------------------------------
Cash - Beginning of Period                    -              -       56,977
------------------------------------------------------------------------------
Cash - End of Period                           485            485      -
------------------------------------------------------------------------------
Non-Cash Financing Activities
A total of 12,000,000 common shares were
issued for services in 1993                 12,000           -         -
------------------------------------------------------------------------------
Supplemental Disclosures

Interest paid in cash                         -              -         -
Taxes paid in cash                            -              -         -
------------------------------------------------------------------------------

(See Accompanying Notes to the Consolidated Financial Statements)



==============================================================================
                                      F-5
Hybrid Fuels, Inc.
(A Development Stage Company)
Consolidated Statement of Changes in Stockholders' Equity
                                                        Deficit Accumulated
                                                        During the
                     # of           Additional Donated  Development
                     Shares                             Stage
                     Issued   Par   Paid-in
                     and
                 Outstanding Value  Capital    Capital               Total
                               $       $          $        $          $
Cumulative from February 16,1960 (Date of Inception)to June 30, 1997
                  15,000,000  15,000   3,398       -     (18,398)       -
------------------------------------------------------------------------------
Shares returned to treasury for cancellation (Note 6(a))
                 (12,000,000)(12,000) 12,000      -         -           -
------------------------------------------------------------------------------
Shares issued to effect a reverse merger (Note 6(a))
                  12,000,000  12,000 (12,000)     -         -          -
------------------------------------------------------------------------------
Net loss for the year -          -       -        -     (93,633)    (93,633)
------------------------------------------------------------------------------
Balance at June 30, 1998
                  15,000,000  15,000   3,398      -    (112,031)    (93,633)
------------------------------------------------------------------------------
Issuance of 1,900,000 shares (Note 6(b))
                   1,900,000   1,900  (1,900)     -         -          -
------------------------------------------------------------------------------
Issuance of shares for cash
                      23,600      24  13,576      -         -        13,600
------------------------------------------------------------------------------
Imputed Interest (Note 5)-        -      -      26,000      -        26,000
------------------------------------------------------------------------------
Net loss for the year (Restated - See Note 9)          (308,377)    (308,377)
------------------------------------------------------------------------------
Balance at June 30, 1999
                  16,923,600  16,924  15,074    26,000 (420,408)    (362,410)
------------------------------------------------------------------------------
Cancellation of shares previously issued (Note 6(b))
                  (1,900,000) (1,900)  1,900      -         -          -
------------------------------------------------------------------------------
Issuance of shares for no consideration (Note 6(c))
                   3,000,000   3,000  (3,000)     -         -          -
------------------------------------------------------------------------------
Issuance of shares pursuant to a subscription agreement (Note 6(c))
                   1,500,000   1,500 148,500      -        -         150,000
------------------------------------------------------------------------------
Imputed Interest
(Notes 4 and 5)      -          -     -       30,735       -          30,735
------------------------------------------------------------------------------
Net loss for the year (Restated - See Note 9)            (324,144)  (324,144)
Balance at June 30, 2000
                  19,523,600  19,524 162,474  56,735     (744,552)  (505,819)
As at June 30, 2000 an additional 79,820 shares were issued but not outstanding
as these shares were issued with rescission rights attached (Note 6(d)). As at
June 30, 2000 a total of 3,000,000 of the 19,523,600 shares issued were not
outstanding until fiscal 2001 (Note 6(c)).
(See Accompanying Notes to the Consolidated Financial Statements)
=============================================================================
                                      F-6

1. Nature of Operations and Continuance of Business

The Company was originally incorporated in the State of Florida on February 16,
1960. After a number of name changes the Company changed its name to Polo
Equities, Inc. on June 3, 1993. Prior to May, 1998 the Company had no business
operations.

In May 1998, the Company caused a Nevada corporation to be formed under the
name Polo Equities, Inc., (Polo) (a Nevada corporation), with authorized
capital of 50,000,000 common shares of $.001 par value. The two companies then
merged pursuant to Articles of Merger adopted May 28, 1998 and filed with the
State of Nevada on June 10, 1998, which changed its domicile to Nevada.

On May 28, 1998, the Company acquired, by issuing 12,000,000 shares, Hybrid
Fuels, USA, Inc. and 330420 B.C. Ltd., which changed its name to Hybrid Fuels
(Canada) Inc. This acquisition was accounted for as a reverse merger whereby
the shareholder of Hybrid Fuels, USA, Inc. and Hybrid Fuels (Canada) Inc.
gained control of Polo Equities Inc. which changed its name to Hybrid Fuels,
Inc. All historical financial statements are those of Hybrid Fuels, USA, Inc.
and Hybrid Fuels (Canada) Inc. As part of the acquisition, three shareholders
representing 12,000,000 previously issued shares returned their shares for
cancellation. For accounting purposes the acquisition was treated as a reverse
merger business purchase of Polo Equities Inc. by Hybrid Fuels, USA, Inc. and
Hybrid Fuels (Canada) Inc. No amount was allocated to the intellectual asset as
it was acquired from a related party and the transfer had no cost basis
associated with it. There was no public market for the shares of Polo Equities,
Inc. at the time of the reverse merger. The Company operates through these two
wholly-owned subsidiaries.

On May 29, 1998 the Company changed its name to Hybrid Fuels, Inc., herein "the
Company". On June 10, 1998 the Company began trading on the OTC Bulletin Board
under the symbol "HRID" and in December, 1999 was moved to the "Pink Sheets".
From May 1998 to June 1999 the Company operated out of an office in California
which was set up for investor relations and to raise additional capital. This
office was shut down in June and the new President and directors are operating
out of Kelowna, BC, Canada and Calgary, Alberta, Canada.

Pursuant to the acquisition, the Company acquired a number of proprietary
technologies with the primary objective of the business being to build small
farm scale ethanol facilities which involves a number of proprietary
technologies exclusively owned by the Company. Other proprietary technology
involves the use of a bio-gas burner which burns manure and bedding straw. This
technology eliminates ground and ground-water contamination and produces most
of the energy required for the facility by supplying heat for fermentation and
vaporization and for the operation of a greenhouse, if desired. Another
exclusive proprietary technology is a vegetable based formula which allows
diesel and ethanol to emulsify. This hybrid fuel reduces particulate emissions
without reduction in power when used in an unaltered diesel engine.

The Company is in the early development stage. In a development stage company,
management devotes most of its activities in investigating business
opportunities and further advancing its technologies. Because of a deficiency
in working capital and other current commitments and significant operating
losses, there is substantial doubt about the ability of the Company to continue
in existence unless additional working capital is obtained.


=============================================================================
                                      F-7

1. Nature of Operations and Continuance of Business (con't)

The Company will need to rely on the forbearance of some creditors and related
parties have agreed to continue to fund working capital as needed. The Company
has entered into discussions with third parties to directly finance a facility
in which the Company will then commence with its business plan.

2. Summary of Significant Accounting Policies

(a) Consolidated Financial Statements
These consolidated financial statements represent the consolidation of the
Company and its two subsidiaries Hybrid Fuels, U.S.A., Inc, and Hybrid Fuels
(Canada) Inc.

(b) Cash and Cash Equivalents
The Company considers all highly liquid instruments with a maturity of three
months or less at the time of issuance to be cash equivalents.

(c) Use of Estimates
The preparation of financial statement in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that effect certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.

(d) Accounting for Stock-Based Compensation
SFAS No. 123, "Accounting for Stock-Based Compensation," requires that stock
awards granted be recognized as compensation expense based on fair values at
the date of grant. Alternatively, a company may account for stock awards
granted under Accounting Principles Board Opinion (APB) No. 25, "Accounting for
Stock Issued to Employees," and disclose pro forma income amounts which would
have resulted from recognizing such awards at their fair value. The Company has
elected to account for stock-based compensation for employees under APB No. 25
and make the required pro forma disclosures for compensation expense. Stock
based compensation for non-employees are accounted for using SFAS No. 123.


3. Deposit on Plant
The Company deposited Cnd$250,000 ($170,561), with Mega Holdings, Inc.,
pursuant to an option agreement to purchase a beef processing plant owned by
Mega Holdings, Ltd. The Company agreed to purchase the beef processing plant
facility including land, buildings and equipment for Cnd$3,000,000 which was
below appraised value. The purchase agreement required an additional payment of
Cnd$150,000 on June 24, 2000, the parties agreed to extend the deadline for the
payment until March 15, 2001. This payment was not made and the deposit was
forfeited and the option agreement terminated. Upon anticipated completion of
the purchase, this beef processing plant was to be operated by Blue Mountain
Packers, Ltd. (a related company). The Company intended to acquire the issued
and outstanding common shares of Blue Mountain Packers, Ltd. for a nominal
amount and operate it as a wholly-owned subsidiary. Blue Mountain Packers, Ltd.
had recently received certification by the Canadian Food Inspection Agency of
the Government of Canada, Department of Agriculture for the processing of
Canadian beef. Blue Mountain Packers is a related party due to having one
common director. Subsequent to June 30, 2000 the Company advanced $84,951 to
Blue Mountain Packers for plant refurbishing. These advances bear interest at
8%. Due to the termination of the option agreement these advances are
considered uncollectible and have been charged to operations.

==============================================================================
                                      F-8
4. Advances Payable
A non-related company coordinated investor relations services for the Company
and paid expenses of $42,013 on behalf of the Company. Subsequent to June 30,
2000 this company paid additional expenses of $27,235 and loaned the Company
Cnd$78,000 ($50,220) for a total amount owing of $119,468 as at June 30, 2001.
This debt was settled on June 29, 2001 by the issuance of 1,000,000 restricted
common shares of the Company. These advances were non-interest bearing and
unsecured until the settlement date. Imputed interest of $2,965, calculated at
a rate of 15% per annum, was charged to operations and treated as donated
capital.

5. Related Party Transactions/Balances

(a) Cash loans of $498,402 were advanced to the Company by the major
shareholder. A total of $365,590 was repaid with cash. The controlling
shareholder also paid office, rent and professional fees totalling $31,937 on
behalf of the Company. The balance of $163,748 is currently owing without
interest or specific repayment terms. Imputed interest of $20,800 (1999 -
$26,000), calculated at a rate of 15% per annum, was charged to operations and
treated as donated capital.

(b) The President who is also a Director of the Company, has paid office and
related expenses from personal funds in the amount of $2,432. Effective July 1,
1999 the President is entitled to a deferred salary of US$6,000 per month and
was owed a total of $72,000 at June 30, 2000. These amounts are unsecured,
non-interest bearing and due on demand. Imputed interest of $6,970, calculated
at a rate of 15% per annum, was charged to operations and treated as donated
capital.

(c) See Note 3 for subsequent advances to Blue Mountain Packers Ltd.

6. Stockholders' Equity
(a) On May 28, 1998, the Company acquired, by issuing 12,000,000 shares, Hybrid
Fuels, USA, Inc. and 330420 B.C. Ltd., which changed its name to Hybrid Fuels
(Canada) Inc. This acquisition was accounted for as a reverse merger whereby
the shareholder of Hybrid Fuels, USA, Inc. gained control of Polo Equities Inc.
As part of the acquisition three shareholders representing 12,000,000
previously issued shares returned their shares for cancellation. For accounting
purposes the acquisition was treated as a business purchase by Hybrid Fuels USA
Inc. of Polo Equities, Inc. No amount was allocated to the intellectual asset
as it was acquired from a related party and the transfer had no cost basis
associated with it. There was no public market for the shares of Polo Equities,
Inc. at the time of the reverse merger.

(b) On August 4, 1998 and March 23, 1999, the Company's former Board of
Directors authorized the issuance of 1,000,000 and 900,000 shares respectively
to individuals without consideration. On August 21, 1999, the current Board of
Directors resolved that share certificates representing ownership of these
1,900,000 shares were issued without adequate consideration being paid to the
Company and were therefore not fully paid and non-assessable. The Company
cancelled the share certificates and indemnified the transfer agent, for any
costs or liability it may incur in any way arising out of the cancellation of
such shares and the transfer agent removed the 1,900,000 shares from the
stockholder list effectively reversing the issuance. Six of the cancelled
certificates, totalling 550,000 shares, have been endorsed and returned to the
Company for cancellation. The contingencies regarding the cancelled shares
relate to anyone who may have subsequent holder rights, and possibly the

==============================================================================
                                      F-9
6. Stockholders' Equity (b)(con't)
individuals who were issued those shares who may claim that they were issued
for due consideration. The Company has determined that there is no amount to be
accrued for future liabilities associated with claims by subsequent
shareholders. To date when these shares are delivered to a broker for possible
resale the broker phones the Company or the transfer agent and the shares are
kept and cancelled. The Company will continue to monitor this issue. No other
contingent liabilities have been included as some of the previous directors
have been informed verbally of the cancellation. No formal legal demand has
been made as the former administration has failed to provide addresses despite
a number of requests.

(c) On May 17, 2000 the Company issued 1,500,000 shares for $150,000 cash
pursuant to a subscription agreement dated February 17, 2000.

On February 17 and 18, 2000, the Company accepted subscription agreements and
notes whereby the Company would receive $300,000 for 3,000,000 shares. The
3,000,000 shares were issued and were then held in escrow. These shares were
subsequently released from escrow to the investors to facilitate financing. The
notes were to bear interest at 8% and were to be paid within 60 days or at the
discretion of the President. In June 2000 the President extended the time for
repayment to one week of the Company being re-listed on the Over-The-Counter
Bulletin Board or other suitable exchange. When it became apparent there were
going to be long delays the notes were demanded to be repaid by February 21,
2001.

The notes were not paid as demanded, and the 3,000,000 shares have since been
sold by the investors to innocent third parties. The investors did not and have
not paid the Company for these shares, despite demands. Since these shares have
been resold to innocent third parties they must be considered outstanding. The
Company intends to sue the investors for the balance due on the notes, however
the Company believes the balance is uncollectible.

(d) Between October 1998 and June 1999, the previous administration sold a
total of 351,053 common shares of the Company to 34 subscribers on the basis of
an Offering Memorandum that contained a significant number of inaccuracies. A
total of $223,000 was raised pursuant to this Offering. The current
administration has concerns regarding possible misstatements, omissions and
misleading statements. On the advice of legal counsel, the Company offered
these 34 subscribers the option of receiving restricted stock as the Company
did not and does not have the funds to repay these subscribers. Those who opted
to receive restricted stock were also given an undertaking that they would
receive a rescission offer when the Company was in a position to repay their
money plus appropriate interest, in return for a return of the restricted
stock, or they could elect to retain the stock. As at June 30, 2000 79,820
shares were issued and subsequently a further 152,933 shares were issued for a
total subscription price of $158,000. The remaining subscribers, who paid
$65,000 for 113,200 shares, have not responded to the offer. Shares issued will
not be considered outstanding and received subscriptions are recorded as
temporary equity until rescission rights have been revoked.

(e) See Note 4 for 1,000,000 restricted common shares issued to a non- related
company to settle debt of $119,468.





==============================================================================
                                      F-10
7. Legal Issues
Although the Company is not involved in any legal proceedings,
several issues may eventually lead to the Company instituting legal action as
follows:

(a) See Note 6(b) for contingencies relating to improperly issued shares that
were later cancelled.

(b) Unauthorized and/or unsupported payments in the amount of $243,463 were
made from Company funds by past officers of the Company during the period May,
1998 to June, 1999. The Company has requested a full accounting from the past
president. All amounts that were unauthorized by the board of directors or
amounts that are not properly documented with invoices and receipts have been
accounted for as other compensation. At such time as Company resources permit,
the Company will seek legal advice to determine whether or not it is possible
to recover all such disputed and unauthorized amounts from the previous
administration.

(c) See Note 6(d) for temporary equity and related rescission rights for
subscribers of 351,053 shares of the Company.

8. Subsequent Events

(a) A further $32,507 was received from the major shareholder.

(b) See Note 3 for forfeiture of the deposit on plant and advances to Blue
Mountain Packers.

(c) See Note 4 for further advances from a non-related company and issuance of
1,000,000 restricted common shares to settle debt of $119,468.

(d) On September 15, 2000, the Company issued a note for Cnd$50,000 ($33,638)
due and payable on or before September 15, 2001 plus 8% interest. Repayment of
the note has been extended until completion of a financing.

(e) On June 29, 2001, 100,000 restricted common shares, valued at $5,000, were
issued to a non-related consultants for plant refurbishing work to March 15,
2001.

(f) On September 19, 2001, 200,000 restricted common shares valued at $10,000
were issued to a director and officer of the company for professional services
rendered.
















==============================================================================
                                      F-11
9. Restatements
The Company has restated its financial statements for the years ended June 30,
1999 and June 30, 2000. The nature of the restatements and the effect on net
income and earnings per share are as follows:

                                                    2000         1999
                                                      $            $
------------------------------------------------------------------------------
Net loss for the year as previously reported      (80,835)     (271,513)
------------------------------------------------------------------------------
Corrections effecting net income:

(a) Inclusion of imputed interest at a rate of 15% per annum on non-interest
bearing loans                                     (30,735)      (26,000)

(b) Deposit on plant written-off                 (170,561)         -

(c) Recognition of a liability owing to a non-related company for expenses paid
on behalf of the Company                          (42,013)         -

(d) Recognition of expenses owing to a related party for expenses paid on
behalf of the Company                                -          (10,864)

Net loss for the year as restated                (324,144)     (308,377)
------------------------------------------------------------------------------

                                                    2000         1999
                                                      $            $
------------------------------------------------------------------------------
Loss per share as previously reported                (.01)         (.02)
------------------------------------------------------------------------------
Loss per share on restatements                       (.01)         -
------------------------------------------------------------------------------
Loss per share as restated                           (.02)         (.02)
------------------------------------------------------------------------------
In addition to the restatements noted above certain other financial statement
note disclosures were provided to improve the overall presentation of the
Company's financial statements.




















==============================================================================-
Page-30-

ITEM  8.  CHANGES IN OR DISAGREEMENTS WITH ACCOUNTANTS

On December 2, 1999, the Company engaged James E. Slayton, CPA as its
independent accountant. The decision to engage James E. Slayton, CPA as the
Company's independent accountant was approved by the Company's President and
Director.

In a report dated May 20, 1998, Orton & Company, Certified Public Accountants,
reported on the Company's financial statements as of April 30, 1998 and June
30, 1997 and the related statements of operations, stockholders' equity
(deficit), and cash flows for the period from July 1, 1997 through  April 30,
1998 and for the year ended June 30, 1997.  Such report did not contain an
adverse opinion or disclaimer of opinion, nor was such report qualified or
modified as to uncertainty, audit scope, or accounting  principles.  Orton &
Company, Certified Public Accounts, understands that they were terminated as
the Company's independent accountants effective mid 1998.  Thereafter, the
Company engaged James E. Slayton, CPA as its independent accountants on
December 2, 1999.

During the Company's two fiscal years ended June 30, 1998 and 1997, and the
subsequent interim period preceding the decision to engage independent
accountants, there were no "reportable events" requiring disclosure pursuant to
Item 304 of Regulation S-B.

Orton & Company, Certified Public Accountants, has provided the Company with a
letter pursuant to Rule 304 of Regulation S-B.


                                  PART III

ITEM  9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

The following table sets forth as of June 30, 2000, the name, age, and position
of each executive officer and director and the term of office of each director
of the Corporation.

NAME          AGE   POSITION                    DIRECTOR OR OFFICER SINCE

Clay Larson   59    President, Secretary        June 28, 1999
                    and Director

Information about Clay Larson.

Prior to becoming a Director and President, Mr. Larson was a practicing lawyer
for 25 years. Prior to leaving the profession in February 1997, he was the
senior and managing partner in the law firm. He has extensive business
experience involving dealing with government agencies, financial institutions,
client services, personnel, computer equipment and operating systems.  After
leaving the practice of law, he worked as a business consultant, leaving that
to become President and Director of the Company.  Mr. Larson has no other
directorships in any reporting companies.

All officers hold their positions at the will of the Board of Directors.

All directors hold their positions for one year or until their successors are
elected and qualified.

==============================================================================
Page-31-

ITEM  10.  EXECUTIVE  COMPENSATION.

Mr. Larson, the Company's sole officer and director, began accruing salary in
the amount of $6,000 per month as of July 1, 1999, which is being deferred
until such time as the Company has adequate funds to pay compensation. At the
present time, the Company does not have any other compensation agreements or
plans with the officer and director of the Company.  The Company does intend to
enter such an agreement in the future.

The Company intends to appoint not less than two nor more than five new
directors who will be remunerated in accordance with their responsibilities
with the Company. At year end, no prospective directors had been identified. At
such time as new directors and/or officers are appointed, the Company will
adopt a compensation plan which will likely include stock options and
performance incentives which may be tied to gross sales, increase in sales,
gross revenues, increase in gross revenues and profitability.



                         SUMMARY COMPENSATION TABLE
               Annual compensation                  Long term compensation
-------------------------------------------------------------------------------
                             Other   Restricted Securities   LTIP    All
                             Annual  stock      underlying  payouts  other
Name &    Year Salary Bonus  Compen- awards     options/SARs  ($)    Compen-
Principal        ($)   ($)   sation   ($)          ($)        (#)    sation
Position
-------------------------------------------------------------------------------
Clay Larson 2000 72,000 -0-   -0-     -0-          -0-        -0-    -0-
President,  1999 36,000 -0-   -0-     -0-          -0-        -0-    -0-
Secretary, Treasurer
-------------------------------------------------------------------------------
Iris McCammon1999 -0-   -0-   -0-     -0-          -0-        -0- 112,935.91(1)
President    1998 -0-   -0-   -0-     -0-          -0-        -0- 41,267.91(1)
-------------------------------------------------------------------------------
Ronald Bothers 1999-0-  -0-   -0-     -0-          -0-        -0-    -0-
Secretary    1998  -0-  -0-   -0-     -0-          -0-        -0-    -0-
Treasurer
-------------------------------------------------------------------------------
Justeene    1997   -0-  -0-   -0-     -0-          -0-        -0-    -0-
Blankenship
President
-------------------------------------------------------------------------------
Danni Uyeda 1997   -0-  -0-   -0-     -0-          -0-        -0-    -0-
Secretary
-------------------------------------------------------------------------------
Shane Duffin 1997  -0-  -0-   -0-     -0-          -0-        -0-    -0-
Treasurer
-------------------------------------------------------------------------------
(1) The amounts shown under other compensation for Iris McCammon are the
subject of an investigation by the Company as these amounts were improperly
paid.  See details under "Legal Proceedings."





==============================================================================
Page-32-

There are no compensatory plans or arrangements, including payments to be
received from the Company, with respect to any person named in Cash
Compensation set out above which would in any way result in payments to any
such person upon termination of their employment with the company or its
subsidiaries, or any change in control of the Company, or a change in the
person's responsibilities following a change in control of the Company.


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

CHANGES IN CONTROL

The following table sets forth as of June 30, 2000, the name and the number of
shares of the Registrant's Common Stock, par value $.001 per share, held of
record or beneficially by each person who held of record, or was known by the
Registrant to own beneficially, more than 5% of the 16,523,600 issued and
outstanding shares ( see  Consolidated  Statement  of Shareholders  Equity in
Financial Statements) of the Registrant's Common Stock, and the name and
shareholdings of each director and of all officers and directors as a group.

Title  of   Name and Address of     Amount and Nature of     Percentage of
Class       Beneficial Owner        Beneficial Ownership     Class
-------------------------------------------------------------------------
Common      Donald  Craig              1,850,000               11.2%
            214-2791 Hwy.
            97N Kelowna, BC V1X  4JB

Common      Clay  Larson  (1)          1,200,000                7.26%
            740 Westpoint  Crt.
            Kelowna,  BC V1W 2Z4

Common      Auchengrey Ltd.            2,000,000               12.1%

Common      Killalow   Ltd.            2,000,000               12.1%
===========================================================================
Common      Total Officers and Directors as a  Group
            (1 Person)                 1,200,000                7.26%
============================================================================

(1)  Officer and/or director.

There are no contracts or other arrangements that could result in a change of
control of the Company.

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

The Company utilizes office space provided by the officers, directors and
shareholders of the Company.  Rent at $400/ month is accruing due to Sir Donald
Craig for the office he provides.  That is fair market rent, payable to a
Company that is not related to Hybrid.

The Company is not expected to have any significant dealings with affiliates.
Presently, other than as described above, none of the officers and directors
have any transactions which they contemplate entering into with the Company.



==============================================================================
Page-33-

ITEM  13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) Financial Statements and Schedules The financial statements as set forth in
Item 7 of this report on Form 10-KSB are incorporated herein by reference.

Financial statement schedules have been omitted since they are either not
required, not applicable, or the information is otherwise included.

(b) Reports on Form 8-K
    None

(c) Exhibit No.
            3.1 Articles of Incorporation (1)
            3.2 Bylaws (1)
            4.1 Specimen stock certificate.
            21 List of Subsidiaries.

      (1) Incorporated by reference from the Company's Form 10SB filed with the
      SEC on February 7, 2000.



                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant caused this statement to be signed on its behalf, by the
undersigned; thereunto duly authorized.

Hybrid Fuels, Inc.

Date: June 11, 2001.
  By: /S/ Clay Larson
          Clay Larson
          President and Sole Director























==============================================================================

Exhibit 4.1 Specimen Stock Certificate

             NOT VALID UNLESS COUNTERSIGNED BY TRANSFER AGENT
               INCORPORATED UNDER THE LAWS OF THE STATE OF

                                     Nevada

                NUMBER                                    SHARES
       ------------------------                  -------------------------
      (                        )                (                         )
      (                        )                (                         )
      (                        )                (                         )
       ------------------------                  -------------------------
                                                   CUSIP NO. 44860F 10 3

                               HYBRID FUELS, INC.

           AUTHORIZED COMMON STOCK 50,000,000 SHARES * PAR VALUE 5801


THIS  CERTIFIES  THAT

                                    SPECIMEN
                                      ONLY

IS  THE  RECORD  HOLDER  OF


                    Shares of HYBRID FUELS, INC. Common Stock

Transferable on the books of the Corporation in the person or by duly
authorized attorney upon surrender of this Certificate properly endorsed.

This Certificate is not valid until countersigned by the Transfer Agent and
registered by the Registrar.

     Witness  the facsimile seal of the Corporation and the facsimile
     signatures of  its  duly  authorized  officers.

Dated:

                                HYBRID FUELS, INC.
                                    CORPORATE
_________________________________     SEAL      ___________________________
             SECRETARY                                  PRESIDENT
                                     NEVADA


NOT VALID UNLESS COUNTERSIGNED                    Countersigned
       BY TRANSFER AGENT          Standard Registrar & Transfer Company, Inc.
                                   12328 South 1840 East * Draper, Utah 64028
                                              By:__________________________
                                                   Authorized Signature





==============================================================================



All restricted stock issued by the Company is endorsed with the following
legend:

THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 AS
AMENDED, HAVING BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW
TO REDISTRIBUTE.  THEY MAY NOT BE SOLD OR OFFERED FOR IN ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SHARES UNDER THE SECURITIES ACT OF
1933 AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION AND
AN EXEMPTION FROM THE SECURITIES ACT OF 1933 AS AMENDED, IS AVAILABLE AND THAT
SUCH REGISTRATION IS NOT REQUIRED, OR IN THE ALTERNATIVE THAT SUCH SHARES MAY
BE SOLD UNDER RULE 144 AS PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION
OF THE UNITED STATES.












































------------------------------------------------------------------------------
Exhibit 21

List of Subsidiaries

Hybrid Fuels USA Inc.,
Hybrid Fuels (Canada) Inc.