WILLIAM J BUTCHER, CPA P.S.

                ----------Certified Public accountant-----------

EVERETT-(425)  333-O6O3  -  MARYSVILLE  (36O)  658-8347  FAX  (425)  335-3567




                          Independent Auditor's Report




To the Board of Directors and Stockholders of
Hybrid  Fuels  Inc.
Kelowna,  BC.  Canada


I have audited the accompanying Statement of Financial Position of Hybrid Fuels,
Inc.(a  Nevada  Corporation), (a development stage company), as of September 30,
2000,  June  30  2000  and  1999 and the related Statements of Loss and Deficit,
Statement of Cash Flows and the Statement of Changes in Shareholders' Equity for
the  interim  period ended September 30, 2000, for the years ended June 30, 2000
and  1999  and  for  Inception  to  September 30, 2000.  My responsibility is to
express  an  opinion  on  these  financial  statements  based  on  my  audit.

I  conducted  my audit in accordance with generally accepted auditing standards.
Those  standards  require that I 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.
I  believe  that  my  audit  provides  a  reasonable  basis  for  my  opinion.

In my opinion, the financial statements referred to above present fairly, in all
material  respects,  the  financial  position  of  Hybrid Fuels, Inc. (a Nevada
Corporation),  (a development stage company), as of September 30, 2000, June 30,
2000  and  1999, and inception  to  September  30,  2000, and the results of its
operations  and  its  cash  flows  for the periods then ended in conformity with
generally  accepted  accounting  principles.

The  accompanying  financial  statements have been prepared assuming that Hybrid
Fuels,  Inc  will  continue  as  a going concern.  As discussed in Note 3 to the
financial  statements,  Hybrid  Fuels, Inc is engaged in new operations, and the
ability  to continue to exist as a going concern relies on the company's ability
to retain adequate financing and to generate sufficient sales.  Management plans
in this regard are described in Note 3.  The financial statements do not include
any  adjustment  that might result from the outcome of the uncertainty of future
agreements,  financing  or  sales.

W.  L.  Butcher  CPA  PS

William  L.  Butcher,  CPA  P.S.
Marysville,  Washington
December  6,  2000



--------------------------------------------------------------------------------
                 1620 3RD STREET. * MARYSVILLE, WASHINGTON 98270
             621 SR 9 NE, PMB #F-4 + LAKE STEVENS, WASHINGTON 98258


<PAGE>
                                HYBRID FUELS INC.
                         (Formerly Polo Equities, Inc.)
                          (A Development Stage Company)





                              FINANCIAL STATEMENTS
                 FOR THE INTERIM PERIOD ENDED SEPTEMBER 30, 2000
                   AND THE YEARS ENDED JUNE 30, 2000, AND 1999





                           WILLIAM J BUTCHER, CPA P.S.
                ----------Certified Public accountant-----------


                                 1620 3rd Street
                              Marysville, WA 98205
                              Phone (360) 658-8347
                              FAX - (360) 658-1165


<PAGE>
                                TABLE OF CONTENTS



Accountant's Report                                    1

Financial Statements

     Balance Sheet                                     2

     Statement's of Loss and Accumulated Deficit       3

     Statements of Cash Flows                          4

     Statements of Changes in Stockholders' Equity     5


Notes to Financial Statements                        6-9


<PAGE>
<TABLE>
<CAPTION>
                                           HYBRID FUELS, INC.
                                     (Formerly Polo Equities, Inc.)
                                     (A Development Stage Company)
            Statement of Financial Position for the interim period ended September 30, 2000
                            and for the years ended June 30, 2000, and 1999


                                                 ASSETS
                                                 ------

                                                       Sept 30, 2000    June 30, 2000    June 30, 1999
                                                      ---------------  ---------------  ---------------
<S>                                                   <C>              <C>              <C>
CURRENT ASSETS
--------------
  Cash                                                $          176   $          485   $            0
                                                      ---------------  ---------------  ---------------
    Total Current Assets                                         176              485                0

OTHER ASSETS
------------
  Deposit on Plant  (Note 5)                                 170,561          170,561                0
  Stockholder Note Receivable (Note 6)                       300,000          150,000
  Note Receivable Blue Mountain Packers Ltd.(Note 7)          33,638                -                0
                                                      ---------------  ---------------  ---------------
    Total Other Assets                                       504,199          320,561                0

TOTAL ASSETS                                                 504,375          321,046                0
                                                      ===============  ===============  ===============


                                    LIABILITIES AND STOCKHOLDERS EQUITY
                                    -----------------------------------
CURRENT LIABILITIES
-------------------
  Accounts Payable                                                60               39                0
  Stockholder Payable (Note 8)                               204,105          266,105                0
  Note Payable Shareholder (Note 7)                           33,638                0                0
  Payable to Director (Note 9)                                 2,187                0          293,183
                                                      ---------------  ---------------  ---------------
    Total Current Liabilities                                239,990          266,144          293,183

STOCKHOLDERS' EQUITY
---------------------
  Common Stock .001 par value
    50,000,000 shares authorized; 19,687,620
    shares issued and outstanding at September
    30, 2000, 18,103,420 shares issued and
    outstanding at June 30, 2000,  16,923,600
    shares issued and outstanding at June 30,
    1999, (Note 10)                                           19,687           18,103           16,924
  Additional Paid in Capital                                 572,490          362,074           15,074
  Deficit accumulated.                                      (327,792)        (325,275)        (325,181)
                                                      ---------------  ---------------  ---------------
    Total Stockholders' Equity                               264,385           54,902         (293,183)

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY             $      504,375   $      321,046   $            0
                                                      ===============  ===============  ===============

              The accompanying notes are an intregal part of these financial statements.
</TABLE>


                                       -2-
<PAGE>
<TABLE>
<CAPTION>
                                                HYBRID FUELS, INC.
                                          (Formerly Polo Equities, Inc.)
                                          (A Development Stage Company)
         Statement of Losses and Accumulated Deficit for the interim period ended September 30, 2000 and
                    for the years ended June 30, 2000, and 1999 and Inception to Sept 30, 2000


                                                                                                     Inception
                                                                                                 February 26, 1960
                                                                                                      through
                                              Sept 30, 2000      June 30, 2000    June 30, 1999    Sept 30, 2000
                                           -------------------  ---------------  ---------------  ---------------
<S>                                        <C>                  <C>              <C>              <C>
REVENUE                                    $                    $                $                $
   Sales                                                    0                0                0                0
   Cost of Sales                                            0                0                0                0
                                           -------------------  ---------------  ---------------  ---------------
   Gross Profit                                             0                0                0                0
 EXPENSES
   Accounting Fees                                          0                0           13,650           13,650
   Advertising                                             17                0              147              164
   Automobile                                               0                0                0              545
   Banking                                                 40               55              119              475
   Commissions                                              0                0            3,307            3,307
   Consultant                                             135                0                0              135
   Contract Labor                                           0                0            1,961            1,961
   Executive Compensation                                   0                0           62,818          118,575
   Filing & Registration fees                             403                0                0            5,403
   General & Administration                                 0                0                0           18,398
   Insurance                                                0                0              450            3,085
   Legal Fees                                               0                0            8,500            8,500
   License & Permits                                        0                0              125              125
   Marketing                                                0                0            2,664            5,587
   Meals                                                  183                0                0              183
   Miscellaneous                                            0                0              749            1,149
   Office Expense                                         709               39            3,114            4,330
   Postage & Delivery                                     115                0            6,241            6,786
   Printing & Reproduction                                  0                0           11,004           17,570
   Professional Fees                                        0                0           70,755           83,214
   Rent                                                     0                0           13,457           15,249
   Security                                                 0                0            1,143            1,248
   Telephone                                              660                0           11,694           14,100
   Travel & Entertainment                                 256                0            1,284            4,055
                                           -------------------  ---------------  ---------------  ---------------
   Total operating Expenses                             2,516               94          213,180          327,792
                                           -------------------  ---------------  ---------------  ---------------
 Net (Loss)                                            (2,516)             (94)        (213,180)  $     (327,792)
                                                                                                  ===============

 Accumulated Deficit beginning of period             (325,275)        (325,182)        (112,002)

 Accumulated Deficit end of period         $         (327,792)  $     (325,275)  $     (325,182)
                                           ===================  ===============  ===============

                 The accompanying notes are an intregal part of these financial statements.
</TABLE>


                                       -3-
<PAGE>
<TABLE>
<CAPTION>
                                                     HYBRID FUELS, INC.
                                               (Formerly Polo Equities, Inc.)
                                                (A Development Stage Company)
                     Statement of Cash Flows for the interim period ended September 30, 2000 and for the
                             years ended June 30, 2000, and 1999 and Inception to Sept 30, 2000


                                                                                                               Inception
                                                                                                            February 26, 1960
                                                                                                                 through
                                                         Sept 30, 2000      June 30, 2000    June 30, 1999    Sept 30, 2000
                                                      -------------------  ---------------  ---------------  ---------------
<S>                                                   <C>                  <C>              <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Loss                                            $           (2,516)  $          (94)  $     (213,180)  $     (327,792)
  Adjustments to reconcile net loss to cash
     used in operating activities
    Changes in assets and liabilities
       Accounts Payable                                               21               39                0               60
           Net cash used in operating activities                  (2,495)             (55)        (213,180)        (327,732)

CASH FLOWS FROM INVESTING ACTIVITIES
  Loan to Blue Mountain                                          (33,638)        (170,561)               0         (204,199)
                                                      -------------------  ---------------  ---------------  ---------------
    Net cash provided (used) by investing activities             (33,638)        (170,561)               0         (204,199)

CASH FLOWS FROM FINANCING ACTIVITIES
  Shareholder Note Receivable                                   (150,000)        (150,000)               0         (300,000)
  Shareholder Loans Payable                                      (26,175)         (27,078)         142,603          251,427
  Sale of common stock                                           212,000          348,179           13,600          580,680
                                                      -------------------  ---------------  ---------------  ---------------
    Net cash provided (used) by financing activities              35,825          171,101          156,203          532,107

NET INCREASE (DECREASE) IN CASH                                     (308)             485          (56,976)             176

CASH AT BEGINNING OF PERIOD                                          485               (0)          56,976                0
                                                      -------------------  ---------------  ---------------  ---------------
CASH AT END OF PERIOD                                 $              176   $          485   $           (0)  $          176
                                                      ===================  ===============  ===============  ===============

                 The accompanying notes are an intregal part of these financial statements.
</TABLE>


                                       -4-
<PAGE>
<TABLE>
<CAPTION>
                                                 HYBRID FUELS, INC.
                                           (Formerly Polo Equities, Inc.)
                                           (A Development Stage Company)
                     Statement of Changes in Stockholders' Equity for the interim period ended
                         September 30, 2000 and for the years ended June 30, 2000, and 1999

                                                          Common Stock                        Deficit
                                                  --------------------------                Accumulated
                                                                                Additional  during  the
                                                                  Par Value      Paid-in    development
                                                     Shares        Amount        Capital       stage       Total
                                                  ------------  ------------  -------------  ----------  ----------
<S>                                               <C>           <C>           <C>            <C>         <C>
BALANCE AT JUNE 30, 1998                           15,000,000        15,000          3,398    (112,002)    (93,604)
                                                  ============  ============  =============  ==========  ==========

Issuance of 1,000,000 shares common stock on
Aug 4, 1998,  (Note 8)                              1,000,000         1,000         (1,000)          0           0

Issuance of 2,400 shares common stock on Sept.
19, 1998 for cash.                                      2,400             3          3,597           0       3,600

Issuance of 21,200 shares common stock on Nov
24, 1998 for cash                                      21,200            21          9,979           0      10,000

Issuance of 900,000 shares common stock on
March 23, 1999, (Note 8)                              900,000           900           (900)          0           0

Net loss June 30, 1999                                                                   0    (213,180)   (213,180)
                                                  ------------  ------------  -------------  ----------  ----------

BALANCE AT JUNE 30, 1999                           16,923,600        16,924         15,074    (325,181)   (293,183)
                                                  ============  ============  =============  ==========  ==========

Issuance of 5,000 shares common stock on Sept
1, 1999 for cash                                        5,000             5          2,495           0       2,500

Issuance of 15,000 shares common stock on Oct
8, 1999 for cash                                       15,000            15          7,485           0       7,500

Cancellation of August 4, 1998 1,000,000 share
issuance and March 23, 1999 900,000 share
issuance (Note 8)                                  (1,900,000)       (1,900)         1,900           0           0

Issuance of 29,050 shares common stock on Jan
6, 2000 for cash                                       29,050            29         16,971           0      17,000

Issuance of 17,730 shares common stock on Feb
7, 2000 for cash                                       17,730            18         12,662           0      12,680

Issuance of 13,040 shares common stock on
March 17, 2000 for cash                                13,040            13          8,487           0       8,500

Issuance of 1,500,000 shares common stock on
February 17, 2000 pursuant to subscription
agreement                                           1,500,000         1,500        148,500           0     150,000

Issuance of 1,500,000 shares common stock on
February 17, 2000 pursuant to subscription
agreement                                           1,500,000         1,500        148,500           0     150,000

Net loss June 30, 2000                                      -             -              0         (94)        (94)
                                                  ------------  ------------  -------------  ----------  ----------
BALANCE AT JUNE 30, 2000                           18,103,420   $    18,103   $    362,074   $(325,275)  $  54,902
                                                  ============  ============  =============  ==========  ==========

Issuance of 1,500,000 shares common stock on
July 5, 2000 pursuant to subscription
agreement                                           1,500,000         1,500        148,500           0     150,000

Issuance of 53,400 Shares to reduce Stockholder
Payable.                                               53,400            53         39,947           0      40,000

Issuance of 10,700 Shares to reduce Stockholder
Payable.                                               10,700            11          6,989           0       7,000

Issuance of 20,100 Shares to Stockholder
Payable.                                               20,100            20         14,980           0      15,000

Net loss September 30, 2000                                 -             -              0      (2,516)     (2,516)
                                                  ------------  ------------  -------------  ----------  ----------
BALANCE AT SEPTEMBER 30, 2000                      19,687,620   $    19,687   $    572,490   $(327,792)  $ 264,385
                                                  ============  ============  =============  ==========  ==========

                   The accompanying notes are an intregal part of these financial statements.
</TABLE>


                                       -5-
<PAGE>
                               HYBRID FUELS, INC.
                         (Formerly Polo Equities, Inc.)
                          NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE  1.  THE  COMPANY
----------------------

The  Company was originally incorporated in the State of Florida on February 16,
1960  as  Fiberglass Industries Corporation of America.  On August 29, 1966, the
Company  changed  its  name  to Rocket-Atlas Corp. and again changed its name on
November  21,  1966 to Rocket Industries, Corporation.  On January 27, 1984, the
Company  changed it's name to Polo Investment Corp. of Missouri, Inc.  On August
2,  1985  the  name was changed to Medical Advanced Systems, Inc. and on June 3,
1993,  the  Company  changed  its  name  to  Polo  Equities,  Inc

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 shares of $.001 par value common stock.  The Company then merged with
Polo  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 29, 1998 the Company changed its name to Hybrid Fuels, Inc., the current
name.

In  May  of  1998,  in  a  stock for stock exchange, the Company acquired Hybrid
Fuels,  USA,  Inc.  and 330420 B.C. Ltd., which changed its name to Hybrid Fuels
(Canada)  Inc.,  As part of the acquisition, the Company acquired the technology
necessary  for  the  Company's current operations.  The Company operates through
its  wholly  owned  subsidiaries,  Hybrid  Fuels,  U.S.A., Inc, and Hybrid Fuels
(Canada)  Inc.

Prior to the acquisition of Hybrid Fuels, U.S.A., Inc, and Hybrid Fuels (Canada)
Inc.  the  Company  had  no  significant  operations  and was seeking a business
opportunity.


NOTE  2.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
--------------------------------------------------------

This  summary  of  significant  accounting  policies  of Hybrid Fuels, Inc. (the
Company)  is  presented  to  assist  in  understanding  the  Company's financial
statements.  The  financial  statements  and  notes  are  representations of the
Company's  management  which is responsible for their integrity and objectivity.
These  accounting  policies  conform to generally accepted accounting principles
and  have  been  consistently  applied  in  the  preparation  of  the  financial
statements.


NATURE  OF  OPERATIONS
----------------------

See  The  Company  above

CASH  AND  CASH  EQUIVALENTS
----------------------------

For  purposes  of  the  statement  of  cash  flows,  the  Company  considers all
short-term  debt securities purchased with a maturity of three months or less to
be  cash  equivalents.

PROPERTY  AND  EQUIPMENT
------------------------

Property  and  equipment  are  stated at the lower of cost or fair market value.
Depreciation is computed for financial statement purposes as well as for federal
income  tax purposes using the MACRS (Modified Accelerated Cost Recovery System)
method  of depreciation.  Equipment is depreciated over five years.  Software is
amortized  over  five  years.

INCOME  TAXES
-------------

The  Company  has  not  filed  any  tax  returns.  It is anticipated that if tax
returns  were  filed,  the company would have net operating losses.  The current
deficit of $327,792 at September 30, 2000 would potentially create a similar net
operating  loss,  which  could  begin  expiring  for  tax  purposes  in  2004.


                                      - 6 -
<PAGE>
                               HYBRID FUELS, INC.
                         (Formerly Polo Equities, Inc.)
                          NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

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.

FOREIGN  EXCHANGE
-----------------

Some financial activity was based on Canadian dollars and translated on June 30,
2000  using  the rate of (C$/US$) 1.468 or a multiplier of .6812 and 1.4864 or a
multiplier  of  .6728  on  September  30,  2000.


NOTE  3.  GOING  CONCERN
------------------------

Because  of  a  deficiency  in working capital and significant operating losses,
there  is doubt about the ability of the Company to continue in existence unless
additional  working  capital  is  obtained.  The  Company currently has plans to
raise  sufficient  working  capital  through  equity  financing  and through the
acquisition  of  companies  having sufficient assets and cash flow to enable the
Company  to  be  self-sufficient  and  profitable.  The  Company has acquired an
option  to  purchase  a  beef  packing  plant  which  it  anticipates will begin
operations  January  1,  2001.  See  NOTE  5


NOTE  4.  COMPANY  FACILITIES
-----------------------------

The  Company  currently  uses office space at #214-2791 Hwy 97 N, Kelowna, B.C.,
VIX4J8,  which  is  provided  by  a  shareholder at no cost to the Company.  The
President  also  maintains  an  office  in  his  home at no cost to the Company.


NOTE  5.  DEPOSIT
-----------------

The  Company  deposited  $250,000  Canadian  Dollars  ($170,561  USD),  to  Mega
Holdings,  Ltd.,  pursuant  to  an agreement to purchase a beef processing plant
owned  by  Mega  Holdings,  Ltd.  The  Company  has  agreed to purchase the beef
processing plant facility including land, buildings and equipment for $3,000,000
Canadian  Dollars.  The property, buildings and related equipment were appraised
in  1996 at a replacement value of $4,990,000 Canadian Dollars, during a time in
which  the  plant  was  dormant  and  in need of repair.  The purchase agreement
requires  an  additional  payment of $150,000 Canadian Dollars within 45 days of
acceptance,  which  made  it  due  on  June 24, 2000, the parties have agreed to
extend  the deadline for the payment.  Upon completion of the purchase this beef
processing  plant  will be operated by Blue Mountain Packers, Ltd.,  The Company
intends  to  acquire the issued and outstanding shares of stock of Blue Mountain
Packers,  Ltd.  and operate this corporation as a wholly owned subsidiary.  Blue
Mountain  Packers,  Ltd.  recently  received  certification by the Canadian Food
Inspection Agency of the Government of Canada, Department of Agriculture for the
processing  of  Canadian  beef.


NOTE  6.  STOCKHOLDERS  LOAN  RECEIVABLE
----------------------------------------

On  February  17,  2000,  and  then  again on July 5, 2000, the Company executed
subscription agreements and notes whereby the Company would receive $150,000 for
1,500,000  shares  common stock for each agreement.  The notes are interest free
and are to be received within one (1) week of the Company being re-listed on the
OTC:BB  or  other  suitable  exchange.


NOTE  7.  NOTE  RECEIVABLE  BLUE  MOUNTAIN
------------------------------------------

On  September  15,  2000, the Company issued a note to Douglas Dickie dba Deelay
Holdings  for  $33,638  USD due and payable on or before September 15, 2001 plus
interest  in  the  amount  of  $2,691  USD  and passed this loan through to Blue
Mountain  Pakers  Ltd.,  which  executed  a  note  at  the  same  terms.


                                      - 7 -
<PAGE>
                               HYBRID FUELS, INC.
                         (Formerly Polo Equities, Inc.)
                          NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE  8.  STOCKHOLDERS  LOAN  PAYABLE
-------------------------------------

Advanced  by the controlling shareholder of the Company;  The money was advanced
to  the  Company  with  no  specific  term  of  repayment.


NOTE  9.  DIRECTOR  PAYABLE
---------------------------

The President and Director Clay Larson, has paid office and related expenses for
the  Company,  from his personal funds in the amount of $2,187 USD.  The Company
has  agreed  to  reimburse  him  for  these  expenses.


NOTE  10.  STOCKHOLDERS  EQUITY
-------------------------------

The  issuer was originally incorporated in Florida as Fiberglass Industries Corp
of  America  in  February, 1960 with authorized capital of 500,000 shares with a
par  value  of  $.10  per  share.

In October, 1964, the Company changed its authorized capital to 1,500,000 shares
of  common  stock  with  a  par  value  of  $.10  per  share

On  November  21,  1966,  the  Company  changed  its  name to Rocket Industries,
Corporation.  and  at  that  time  authorized capital was increased to 3,000,000
shares  and  par  value  was  changed  to  $.05  per  share.

On  January  27,  1984,  the Company changed its name to Polo Investment Corp of
Missouri  Inc.  and  increased  its  authorized  capital  to  30,000,000 shares.

On  June  3,  1993,  the  Company  changed  its  name to Polo Equities, Inc. and
increased  its  authorized  capital to 50,000,000 shares common stock with a par
value  of  $.001  per  share.

In May 1998, the Company caused a Nevada corporation to be formed under the name
Polo  Equities,  Inc.,  (  a  Nevada  corporation),  with  authorized capital of
50,000,000 shares of $.001 par value common stock.  The Company then merged with
Polo  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 29, 1998, the Company changed its name to Hybrid Fuels, Inc., the current
name.

In  accordance  with  the  terms  of an acquisition agreement, 12,000,000 of the
15,000,000 shares outstanding at the time, were canceled and 12,000,000 treasury
shares  were issued in a share for share exchange by which the issuer became the
owner  of all of the issued and outstanding shares of Hybrid Fuels, USA Inc. and
330420  B.C.  LTD.  That Company changed it's name to Hybrid Fuels (Canada) Inc.
By  acquiring  control  of  that  company,  this  Company  gained control of the
intellectual  property.

On  August 4, 1998, the Company 's Board of Directors authorized the issuance of
1,000,000  shares  common  stock to individuals without consideration.  On March
23,  1999, the Company's Board of Directors issued an  additional 900,000 shares
common  stock,  also  without  consideration.  On  August 21, 1999, the Board of
Directors resolved that share certificates numbered 10166 through 10174 totaling
1,000,000  shares  common  stock  and  certificates numbered 10212 through 10220
totaling  900,00  shares common stock 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,
Standard  Registrar and Transfer Company Inc., 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  canceled certificates, totaling 550,000
shares,  have  been  endorsed  and  returned  to  the  Company for cancellation.


                                      - 8 -
<PAGE>
                               HYBRID FUELS, INC.
                         (Formerly Polo Equities, Inc.)
                          NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE  11. U.S.A.  SECURITIES  AND  EXCHANGE  COMMISSION
-------------------------------------------------------

On November 7, 2000, the Company filled a Form SB-2 Registration Statement under
The  Securities  Act  of  1933  with  the  Securities  and  Exchange Commission.
Registration  File  Number  333-49424.  The  Company  has  been  advised  by the
Securities  and Exchange Commission that the June 30, 2000, Financial Statements
needed  to  be  updated  and  resubmitted  as  an  amended  submission.



                                       -9-
<PAGE>
<PAGE>