SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                   FORM 10-KSB

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

                    For the fiscal year ended March 31, 1999
                          -------------------------------

                                       or

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

                       For the transition period from to

                         Commission file number 0-222630

                     Seiler Pollution Control Systems, Inc.
                 (Name of Small Business Issuer in Its Charter)

             Delaware                                   22-2448906
     (State or Other Jurisdiction of                (I.R.S. Employer
     Incorporation or Organization)                Identification No.)

5115 Parkcenter Avenue, Suite 270, Dublin, Ohio          43017
  (Address of Principal Executive Offices)            (Zip Code)

                                  614-792-0400
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:     None

Securities registered under Section 12(g) of the Exchange Act: Common Stock, par
value $.0001 per share.

Check  whether the issuer: (1) filed all reports required to be filed by Section
13  or 15(d)  of the Exchange Act during the past 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 past 90 days.  Yes   x           No

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

State issuer's revenues for its most recent fiscal year. $1,288,380


                                       -1-

<PAGE>





         The  aggregate  market value for the  5,130,424  shares of voting stock
(all of one class of $.0001 par value Common Stock) held by  non-affiliates * of
Registrant as of June 30, 1999 is $8,336,939  based upon the closing  average of
the bid ($1.25) and asked ($2.00)  prices for such stock on the date  heretofore
indicated,  i.e.  $1.625.  See Item 5 (a) which  indicates the limited,  if any,
trading activity in the Registrant's  securities for the periods  indicated.  By
virtue  hereof,  it is difficult if not  impossible  to  accurately  arrive at a
completely  realistic  "aggregate  market  value" of  Registrant  shares held by
non-affiliates  as called  for  herein  especially  in view of the fact that the
existence  of limited or sporadic  quotations  should not of itself be deemed to
constitute  an  "established  public  trading  market".   The  above  statements
regarding  "aggregate  market value" and  "established  public  trading  market"
should be taken into careful  consideration  when  considering  the  information
contained herein regarding the indicated  "aggregate  market value" of shares of
voting stock held by non-affiliates.

                   ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                           DURING THE PAST FIVE YEARS

Check  whether  the  issuer  has  filed all documents and reports required to be
filed  by  Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.  Yes     No    Not Applicable

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.  As of June 30, 1999 - 7,565,362

Transitional Small Business Disclosure Format (check one):    Yes        No   x

                       DOCUMENTS INCORPORATED BY REFERENCE

         If the following  documents  are  incorporated  by  reference,  briefly
describe them and identify the part of the Form 10-KSB  (e.g.,  Part I, Part II,
etc.) into which the document is incorporated: (1) any annual report to security
holders;  (2) any proxy or information  statement;  and (3) any prospectus filed
pursuant to rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act").
The listed documents  should be clearly  described for  identification  purposes
(e.g.,  annual  report to security  holders for fiscal year ended  December  24,
1990).

                                      None

* Affiliates  for the purpose of this item refers to the  registrant's  officers
and  directors  and/or any persons or firms  (excluding  those  brokerage  firms
and/or  clearing  houses  and/or  depository   companies  holding   Registrant's
securities as record holders only for their  respective  clienteles'  beneficial
interest) owning 5% or more of the Registrant's common stock, both of record and
beneficially - all as of June 30, 1999.




                                       -2-

<PAGE>



                           FORWARD LOOKING STATEMENTS

         Certain  statements  included  in this  Annual  Report are not based on
historical  facts, but are forward looking  statements.  These statements can be
identified  by the  use of  forward  looking  terminology  such  as  "believes",
"expects",  "may", "will", "should", or "anticipates" or the negative thereof or
other  variations  thereon  or  comparable  terminology,  or by  discussions  of
strategy.  These  statements  reflect the Company's  reasonable  judgments  with
respect to future events and are subject to risks and  uncertainties  that could
cause  actual  results to differ  materially  from those in the forward  looking
statements.  Such risks and  uncertainties  include,  but are not limited to the
completion  of an  economically  viable  HTV  system  and  the  development  and
marketing  of  additional  systems.  The Company must also  generate  additional
resources  to enable it to  continue  the  completion  of the HTV  system.  Such
additional  resources  may be generated  through the sale of  additional  equity
securities,  the sale of an existing system, alliances,  joint ventures or other
business transactions which would generate sufficient  resources.  Other factors
such as changes in business  conditions and changes in regulations  and laws may
also impact the outcome of forward looking statements.


                                       -3-

<PAGE>



                     SEILER POLLUTION CONTROL SYSTEMS, INC.
                                   Form 10-KSB
                        Fiscal Year Ended March 31, 1999

                                TABLE OF CONTENTS

                                    Page No.

                                     PART I

Item 1.  Description of Business.                                         5

Item 2.  Description of Property.                                        13

Item 3.  Legal Proceedings.                                              14

Item 4.  Submission of Matters to a Vote of Security Holders.            14

                                     PART II

Item 5.  Market For Common Equity and Related Stockholder
         Matters.                                                        15

Item 6.  Management's Discussion and Analysis or Plan of
         Operation.                                                      19

Item 7.  Financial Statements.                                  F-1 to F-23

Item 8.  Changes in and Disagreements With Accountants on
         Accounting and Financial Disclosure.                            25

                                    PART III

Item 9.  Directors, Executive Officers, Promoters and Control
         Persons; Compliance With Section 16(a) of the
         Exchange Act.                                                   26

Item 10. Executive Compensation.                                         30

Item 11. Security Ownership of Certain Beneficial Owners
         and Management.                                                 31

Item 12. Certain Relationships and Related Transactions.                 33

Item 13. Exhibits, List and Reports on Form 8-K                          34

SIGNATURES                                                               35




                                       -4-

<PAGE>



                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS

Business Overview

         Seiler Pollution  Control Systems,  Inc.  (hereinafter,  "Seiler",  the
"Company",  or the  "Registrant)  is engaged in the  environmental  service  and
equipment  business  both within and without the United  States (and through its
four subsidiaries as hereinafter indicated).

         Seiler  Pollution   Control  Systems   International,   Inc.   ("Seiler
International")  is a wholly  owned  subsidiary  of the  Company  that holds the
exclusive  rights to a High  Temperature  Vitrification  System ("HTV System" or
"System"). The HTV System was initially developed and patented in Switzerland by
Seiler  High  Temperature  Separating  Systems  Ltd.  ("Seiler  HT"),  a company
controlled  by a former  director  of the  Company  and his  family.  Seiler  HT
transferred  exclusive worldwide rights to the "System" to Maxon Finance & Trade
Ltd. SA ("Maxon"). In July 1993, Maxon transferred the European rights to Seiler
International with the remaining worldwide rights being acquired directly by the
Company from Maxon under a separate license agreement.  On October 12, 1998, the
Company  entered into an agreement  with Maxon whereby the  principal  amount of
debt and accrued interest  (approximately  $2,056,000) owed to Maxon relating to
the license agreements was converted into 3,333,333  restricted shares of common
stock. See also "Security Ownership of Certain Beneficial Owners and Management"
as to Maxon's current percentage interest in the Company and the fact that it is
currently a principal stockholder.

         Advanced Pollution Control ("APC AG") formally  known as Seiler SEPC AG
("SEPC  AG") is a wholly owned subsidiary of the Company located in Switzerland.
In February 1995, APC AG under its previous name SEPC AG formed a German company
known as Seiler Trenn-Schmelzanlagen Betreibs GmbH  ("Seiler TSB").  APC AG owns
50%  of  Seiler TSB and Dr.  Gerold Weser,  the Company's  President and CEO and
President of Seiler TSB owns the remaining 50%.  Seiler TSB currently operates a
commercial HTV recycling facility in Freiberg, Germany which recently  commenced
generating revenues.  See also "Current  Projects - Freiberg,  Germany  Project"
appearing hereinafter in this Item 1.

         In March,  1997,  Seiler acquired a majority  interest in a private New
Jersey  corporation  now known as  Advanced  Nuclear  Control  Inc.  ("ANC") and
formerly known as Seiler Nuclear Control Systems,  Inc.  ('Seiler  Nuclear") and
N.W. Technology,  Inc. ("NWT") ANC plans to design,  develop, build, and operate
prototype and commercial  vitrification  facilities  that will specialize in the
handling of low-level and mixed nuclear waste.

         In the spring of 1998,  the Company  acquired an eighty  percent  (80%)
interest  in a newly  formed  subsidiary  called  Seiler  Abfallbehandlungs  und
Dienstleistungs GmbH ("SABD GmbH"). The remaining  twenty-percent (20%) is owned
by Dr. Gerold Weser the Company's  President.  SABD currently  operates a liquid
waste processing facility in Berlin, Germany which recently commenced generating
revenues.  See also  "Current  Projects  -  Berlin,  German  Project"  appearing
hereinafter in this Item 1.

         Unless  specifically  identified  by  their  individual  names,  Seiler
Pollution  Control  Systems,  Inc.  and its four  subsidiaries  are  hereinafter
referred to as 'Seiler", "Company", or the "Registrant".


                                       -5-

<PAGE>



Competition

         Competition to manage or dispose of hazardous  waste is segmented among
waste  landfills,   waste  treatment   systems,   incinerators  and  alternative
technology  processors.  Seiler  belongs to the latter group as one of the small
number of companies engaged in recycling of wastes.

         Landfills are the most prevalent means of waste disposal. In the United
States,  landfill  space is  plentiful.  However  costs,  permitting  and  other
regulatory  considerations  have restricted the number of landfills.  Currently,
approximately eighteen (18) hazardous waste landfills exist in the United States
and these are in direct  competition with  incinerators and various forms of new
technologies.

         Many hazardous waste treatment  technologies mix waste with cement kiln
dust or lime and then  dispose of the  mixture in a landfill.  This  methodology
stabilizes waste and could prevent short term leaching characteristics, but does
not change the hazardous property makeup of the waste mixture.

         Incineration  technology  is only  effective in handling  organic laden
waste feedstocks.  Inorganic feedstocks will either fume or melt in incinerators
and will  eventually  settle  or be  imbedded  in the  incinerator  ash  residue
provided  they are not  directly  released  into the air.  This ash residue then
needs to be disposed.  A Seiler HTV system can be integrated  into an industrial
waste incinerator process to handle the ash residue thereby preventing hazardous
waste land disposal and future  problems and  liabilities  associated  with this
disposal.

         Among the available alternative waste handling  technologies,  the most
commonly  known  that  could  compete  with  the  Seiler  technology  are  metal
reclamation  systems,  plasma  systems,  and  other  vitrification  systems,  as
summarized in general terms below.

         Metal reclamation systems need large concentrations of waste feedstocks
that  have  material  quantities  of  particular  metals  to be cost  effective.
Typically,  commercial  waste  generators  produce  wastes  that have only small
concentrations of various metals. Since metal reclamation systems concentrate on
the resources they reclaim, they often generate residues which contain hazardous
waste components.  The residues  generated from these systems remove the desired
materials  and leave  the  hazardous  components  in a more  concentrated  form.
Therefore,  this  waste  is  usually  more  hazardous  than the  original  waste
feedstock that was being reclaimed.

         Plasma  systems that handle wastes require a large  electrical  source.
This technology is very good at producing extreme heat. However,  because of the
very high  temperatures,  there is  virtually no viable  commercial  end product
(such as glass  ceramic)  control and  capturing  fumed  hazardous  particles is
difficult.

         Most other competing vitrification systems use electric or joule melter
technology.  Many of these  systems  are still in the pilot  stage,  concentrate
mostly on the  radioactive  waste  marketplace,  and/or have a very small market
share.

Licensing Agreements

         In  July  1993,  the  Company  entered  into  two  separate   licensing
agreements with Maxon. The amended licensing  agreements required the Company to
pay Maxon a licensing fee of $2.5 million for the European rights to the HTV

                                      -6-
<PAGE>



System and $2.5 million for the  remaining  worldwide  rights.  The Company made
payments to Maxon prior to October 1998 totaling  $3,022,751,  and converted the
outstanding principal balance of approximately  $1,977,000 plus accrued interest
of  approximately  $79,000 into  3,333,333  shares of common stock in accordance
with October 12, 1998  agreement  hereinabove  referred to. As a result of these
transactions,  the Company  currently owns the European and worldwide  rights to
the HTV System outright.

The Technology

         The  HTV  System  is a  high  temperature  vitrification  process  that
effectively  processes  a broad range of mixed and  hazardous  wastes into inert
glass  ceramic  materials.  The  heart  of the HTV  System  is a  patented  high
temperature  converter melter that operates at temperatures  around 2700 to 3300
degrees F (1500 to 1800  degrees C). The energy  causes  chemical  and  physical
reactions that convert  hazardous  chemical  compounds  into inert  nonhazardous
glass ceramics, metal oxides, and salts.

         The dryer and  preheater  components  permit  processing  wet materials
(e.g.,  sludges,  metal hydroxide filter cake, wastewater treatment residues) or
dry waste feedstocks (e.g., incinerator ash, spent foundry sands, asbestos).

         The System's flexibility allows processing organic, inorganic, or mixed
organic/inorganic  waste feedstocks.  The inorganics are the primary  components
needed for producing glass ceramic products and metal oxides,  while the organic
residues provide limited supplemental energy for the System.

         The HTV  System  process  can be  controlled  to produce  materials  in
different  shapes  and  forms as well as in  various  degrees  of  hardness  and
toughness.  The  resulting  materials  are  made  into  nonhazardous  marketable
products and recycled back into the commercial marketplace.

The HTV System

         Seiler's  commercial  HTV Systems  can process  2,000 to 15,000 tons of
waste feedstocks per year at a rate of 600 to 4400 pounds (250-2,000  kilograms)
per hour. The commercial system is built to operate 24 hours per day, 7 days per
week, shutting down only for scheduled maintenance or emergency repairs. The HTV
System includes extensive process controls,  a combustion air heat exchanger,  a
flue gas quench system, a refined glass ceramic exit system,  and  sophisticated
air pollution control components.

         The Company  promotes  installing a  commercial  HTV System on the site
where the  waste  feedstocks  are  generated.  By  managing  the  waste  onsite,
transportation  costs,  safety, and liability  concerns  associated with offsite
management are reduced if not eliminated.  A commercial HTV System may, however,
be built in a central  location  to serve as a regional  recycling  center for a
number  of  hazardous  and  industrial  waste  generators  in order  to  achieve
economies of scale.

Market Strategy and Business Development

         Seiler's marketing  strategy is to promote the Company's  vitrification
process as the preferred option for managing  hazardous and industrial wastes by
stressing the fact that Seiler's HTV System offers environmental and economic

                                      -7-
<PAGE>



advantages over traditional waste disposal or storage methods.  The Company also
plans to accelerate the product development and marketing side of the business.

Environmental Advantages

         The HTV System  recycles  hazardous  and  industrial  wastes into safe,
nonhazardous glass ceramic products by binding the metal components in the waste
feed in a glass  ceramic  matrix  on a  molecular  level.  The  resultant  inert
materials pass  standardized  governmental  leachate tests  including the United
States  EPA  Toxicity   Characteristic   Leaching  Procedure  and  its  European
equivalents. Dangers and liabilities associated with hazardous waste storage and
disposal  are  reduced  or  eliminated,  thereby  providing  a  safer  and  more
environmentally sound method of waste management.

Economic Advantages

         Hazardous wastes require monitoring,  disposal and/or storage costs not
only at the time of disposal  but also over the long period of "cradle to grave"
responsibility. Liability issues with their accompanying legal fees and possible
fines also remain open-ended.  Additionally,  companies/responsible  parties are
subject to financial  accountability  on  contamination  issues not only for the
future, but retroactively as well.

Product Development and Marketing

         As heretofore  indicated,  the glass ceramic materials  produced by the
HTV System are inert, nontoxic and reusable.  Consistent characteristics such as
substantive  hardness,  toughness,  color  and  insulating  properties  make the
recycled materials  commercially  marketable.  The process produces  reclaimable
products that can be sold, such as nonhazardous metal oxides and salts.

         Seiler's  product  research and development is conducted on two fronts.
The United  States  product  research and  development  operations  are overseen
through the Company's Dublin,  Ohio offices.  In the United States,  the Company
has developed ongoing relationships with The Ohio State University Department of
Material Science and Engineering (OSU) and the Edison Material Technology Center
(EMTEC) to expand glass ceramic product quality and development.  In Europe, the
Company has an ongoing  relationship  with the  University of Freiberg to expand
its glass ceramic processing  capabilities and to supplement product development
efforts.  The European product research and development  operations are overseen
at the Company's Freiberg, Germany plant facility.

         Bench studies and laboratory  research have identified three commercial
glass   ceramic   product   markets;   architectural   applications,    abrasive
applications,   and   refractory   applications.   Examples   of   architectural
applications  include  floor  and wall  tile,  sinks,  bathtubs,  patio  stones,
mosaics,  bricks,  vanities, and counter tops. Examples of abrasive applications
include sandpaper,  grinding media, shot blast media,  garnet replacement media,
sandblast  replacement media,  grinding wheels,  glass beads, buffing compounds,
and polishing compounds.  Examples of refractory  applications include fireproof
wallboard, roofing media, filtration media, high temperature specialty products,
and insulation.

         This past year,  the Company's  product  development  efforts have been
intensified.  The Company is currently  marketing  commercialized  glass ceramic
products generated from its Freiberg, Germany recycling facility. Market and

                                      -8-
<PAGE>



product  development efforts have been expanded to incorporate more products and
to  identify  higher  end  use  markets.   Seiler  intends  to  continue  market
development and product expansion in the coming years.

Current Projects

Freiberg, Germany Project:

         Groundbreaking for the Freiberg recycling facility took place in May of
1997.  The  facility  was  completed  by  the  end of  November  1998  with  one
vitrification line active. The second  vitrification line is not scheduled to be
completed  until the end of 1999.  The  facility  was  designed  to  handle  two
vitrification  process lines with a capacity of processing 10,000 to 12,000 tons
of waste per year.  Since January 18, 1999,  the Freiberg  facility has received
permission to process over 100 types of hazardous  waste  including;  industrial
paint  and  hydroxide   sludges,   industrial   wastewater   treatment  sludges,
electroplating sludges, contaminated chemicals,  petrochemicals, spent solvents,
oils,  pesticides,  asbestos containing residuals,  and mixed  organic/inorganic
residuals.

         Since opening, the Freiberg facility has operated over 4,000 hours. The
current revenue stream for the single operating line is approximately 400-600 DM
per input ton. The  glass/ceramic  products  produced  from the System are being
sold at a current average of 50 DM per ton.

         Once operations  began,  the Freiberg system operated  continuously for
approximately  2,500 hours on  temperatures  which exceeded 1550 degrees Celsius
(over 2800 degrees  Fahrenheit).  At this point, the process  engineering  staff
planned a system  shutdown  so as to conduct a  comprehensive  inspection.  This
occurred in January 1999.  Bringing the system down at this time was part of the
shakedown  engineering  procedures  in as  much  this  was the  Company's  first
operating  commercial  system.  Each part of the system was carefully  inspected
with  extraordinary  time spent on the  inspection  and  evaluation  of the high
temperature  portions of the system.  All of the designed  components  performed
better than expected  especially the high  temperature  converter,  which is the
primary high heat  component.  This component was expected to have the most wear
because it operates under the highest temperatures.

         After  this  inspection,  the  plant  was  heated  up again and the air
emission regulating  authorities conducted full scale emission testing. Data was
gathered over a seventy-two hour time period.  All of the critical air emissions
were far under  the  allowed  regulatory  values.  As a result of these  factors
Seiler  TSB has  secured  regulatory  authority  to  recycle  approximately  150
different kinds of waste-streams for the Freiberg facility.

         It is  anticipated  that the Freiberg  facility will break even in 1999
even with only one  vitrification  line operating with a processing  capacity of
5,000 to 6,000  tons per  year.  It is  further  anticipated  that the  Freiberg
facility will be at full operating capacity with two vitrification lines running
prior to December 2000. The Company sales staff has determined that  significant
waste feedstocks are available for the Freiberg recycling facility.

         The Company  has moved its  Research  and  Development  operations  and
European  manufacturing  facilities  from  Switzerland  to Freiberg.  Besides an
operating  facility,  Freiberg will also be a Company technical  engineering and
know-how  center.  The  Company is  currently  negotiating  with a large  German
engineering and industrial  construction  general  contractor to handle European
projects.

                                       -9-

<PAGE>



United States Air Force Project:

         Testing  for United  States Air Force and other  Department  of Defense
waste streams under  Seiler's  Phase II Radian  International  contract has been
completed.  This work has been formally  documented.  Due to the success of this
project,  negotiations  are  currently  proceeding to have the United States Air
Force, the Defense Logistics Agency,  and other Department of Defense facilities
use the  Seiler  technology  once a United  States  plant is  operable.  This is
expected to take place next year.

Coshocton, Ohio Project:

         Construction   of  the   building   to  house   the  high   temperature
vitrification  system was completed and a "Certificate  of Occupancy" was issued
by the appropriate Ohio regulatory agency.  Funding concerns delayed progress on
the engineering and design of the commercial vitrification system for Coshocton.
However  with the new project  financing  in place,  which is expected in August
1999, this project can proceed. See also Item 1 "Description of Business - Summa
Capital Project Financing Proposal" appearing hereinafter.

         Significant  progress  was  made  in  the  regulatory  arena  with  the
issuance, by the Ohio Environmental Protection Agency (OEPA), of a determination
recognizing  Seiler's high temperature  vitrification  (HTV) technology as being
true recycling provided it meets all of the specified  conditions described in a
formal  recycling  recognition  letter  which was sent to Seiler in July,  1998.
Seiler has been granted exempt status when processing  electric arc furnace dust
from steel mills,  contaminated sandblast media, and contaminated foundry sands.
The Ohio EPA  determination  also  makes  provisions  for  exempt  status  to be
extended to other types of waste feedstocks under a testing  protocol.  The next
step in the  regulatory  process for the Coshocton  project is to secure air and
surface water permits to install and operate. The applications for these permits
are prepared under Ohio EPA's guidance. It is expected that this permit will not
be  difficult  to secure  because  it is mostly  dependent  on good  engineering
practices and equipment.

California Project:

         As was the case for the Coshocton,  Ohio project, this project was also
delayed due to project financing  problems.  Since project financing is expected
to be available in August 1999,  this project is not expected to continue  until
later in the year.  Seiler's exempt status in California allows that this system
can be  placed  anywhere  within  the  State as long as it meets  the  recycling
exemption  criteria standards that were expressed in the State of California EPA
letter of September,  1997. Ongoing  negotiations with the Department of Defense
continue  with  respect to  selection  for the  initial  site of the  California
system.  Engineering for a California  system is not projected to commence until
after the Coshocton, Ohio project is well underway.

The Edison Materials Technology Center (EMTEC) Projects:

         Seiler's  original Core  Technology  Project  (CT-54) was  successfully
completed. A final project report has been prepared.  Some of the goals achieved
in this project were the  production of lower cost glass  ceramic  products from
waste  feedstocks,  production  of  higher  value  products,  production  of new
prototype products, production of model product and process specifications,

                                      -10-

<PAGE>



identification  of  an  Ohio  recycling site (Coshocton), and the preparation of
project financial templates.

         Seiler has secured another Core Technology  project from EMTEC (CT-68).
This project which was initially  expected to start January 1,1999 will actually
commence   August  1,   1999.   This  new   project  is   expected   to  enhance
commercialization  of the Seiler HTV  technology  and develop higher value glass
ceramic products that will be generated from waste feedstocks.  Phase I of CT-68
has a value of $100.000 (US) and Phase II has a value of $350,000 (US). Phase II
will commence  approximately July 1, 2000. The Company has a number of corporate
supporters  and  team  affiliates  for this  project  including  The Ohio  State
University,  Allied Mineral Products, Armco Steel, Delphi Chassis,  Consolidated
Natural Gas,  Cleveland Fluid Systems,  The RJ Marshall  Company,  American Rock
Wool,  Coshocton County Jobs Plus, North American Processing Company, The US Air
Force, Stan-Blast Abrasive Company, and many others.

Berlin, Germany Project:

         This project is being  managed by the Company's  subsidiary  SABD GmbH.
The project  involves three phases.  Phase I includes the purchase and operation
of an  existing  chemical/physical  treatment  plant  which is designed to treat
liquid hazardous  wastes.  Phase II involves the modernization of this facility.
In Phase  III the  Company  intends  to  construct  and  operate a new HTV plant
facility for handling solid  hazardous  wastes.  Permitting and licensing of the
HTV facility is expected to be completed by November,  1999. This system will be
designed with a processing  capacity of 12,000 - 15,000 tons of input  hazardous
materials per year.

         The  existing  chemical/physical  treatment  plant has been  generating
revenues since the late summer of 1998.  Additional  project  financing for this
project is expected to come from Summa Capital  LTD.,  the Company's new project
financing  partner,  and the German government and departmental  authorities who
are expected to provide  subsidies and credits similar to those already supplied
in the  Freiberg  project.  See also Item 1  "Description  of  Business  - Summa
Capital Project Financing Proposal" appearing hereinafter.

Swiss Projects:

         There has been no  significant  change  with  respect  to the RESH auto
shredder  project;  a cooperative  joint  venture  between the Company and Swiss
Steel  called  PyRec AG. For prior  information  with  respect  to this  project
reference is herewith made to the Company's Form 10- K for its fiscal year ended
March 31, 1998.

         The Company has moved its R&D  operations  and  European  manufacturing
facilities  from   Switzerland  to  Freiberg,   Germany  (see  Freiberg  Project
discussion).  Two hazardous waste projects and one low-level  radioactive  waste
project are in development for Switzerland.

Austrian Low-Level Radioactive Project:

         The  Company  has  entered  into a joint  venture to  undergo  rigorous
testing  for the  processing  of  low-level  radioactive  waste at the  Austrian
Nuclear Research Center in Seibersdorf, Austria. A pilot facility constructed in
Switzerland has already successfully  processed simulated low-level wastes. This
project is expected to get underway by year's end.  Through  this joint  venture
structure, the Company expects to gain access to the permits necessary for

                                      -11-

<PAGE>



processing  low-level  radioactive  wastes in  Austria  while  also  having  the
possibility  of  extending  these  permits   throughout  the  European  Economic
Community.

         The International Atomic Energy Agency (IAEA) is based in Seibersdorf,
Austria.  This is an  international  organization  founded  by  countries using
nuclear power. All  guidelines  regarding  the  handling  and  processing  of
radioactive  waste is made through this  organization.  The Nuclear  Research
Center not only has all permits for handling  radioactive  waste,  but also they
have a highly  regarded personnel-training  program.  These  are key  elements
for  Seiler's  low-level radioactive  projects.  The Company  plans to integrate
its  first  low-level radioactive system within the Research Center's existing
facility.

French Projects:

         There have been no new  developments  in the French  projects that have
not already been reported.  For prior  information  with respect to this project
reference is herewith made to the Company's  Form 10-K for its fiscal year ended
March 31, 1998.

Possible Other Projects - Proposals:

         A proposal  for the  installation  of an HTV system was  requested by a
Mexican  Company.  A  proposal  was  submitted,  and  subsequently  was  put off
indefinitely due to the financial instability of the project.

         A proposal  was made for the  installation  of two HTV systems in Saudi
Arabia.  The terms and  conditions of this project are currently  changing,  and
further evaluation for going forward will need to be analyzed before the Company
formally commits.

         Expressions  of interest for HTV systems were  received  from groups in
Spain, India, Italy, Japan,  Taiwan, West Virginia,  New Mexico,  Arkansas,  and
Texas. Follow-up on these potential projects is ongoing.

Summa Capital Project Financing Proposal:

         In January  1999 the Company  entered into a financing  agreement  with
Summa Capital Corporation  ("Summa"), a British West Indies company specializing
in Asset  Management  and Project  Financing,  whereby  Summa  agreed to provide
(through  others) up to Seventy Five Million Dollars  ($75,000,000) of financing
to Seiler for the  construction of processing  plants,  research and development
and  general  business  expansion;  either  through  issuance of  debentures  or
utilization  of note  purchase  agreements  (or  similar  debt  documents)  with
accredited  investors.  Assuming  specific project financing the Company will be
required to deliver a first lien  position for financing  participants  so as to
secure assets for a specific financed project.

         Agreed to financing  terms  include:  (1) a financing  term of 12 years
with interest at the rate of 7-7/8% per annum, with interest limited and payable
only on those funds  drawn-down  for each  specific  projects and with  Seiler's
right to defer  interest  payment  for the  first 24 months  subsequent  to each
draw-down  date,  (2) Seiler  being  required  to obtain  contractually  binding
agreements for processing waste and the sale of the recycled products for 65% of
vitrification system capacity with the understanding that contractual agreements
(with the exception of the first 2 U.S. projects and the first 2 foreign country
projects) shall be in place within six months of the time that the identified

                                      -12-

<PAGE>



vitrification   system  is  in   commercial   operation  and  with  the  further
understanding that contractual  agreements for all subsequent  projects shall be
in place prior to project funding  draw-down and (3) the Company being required,
prior  to   draw-down,   to  have  all  necessary   environmental   permits  and
determinations in place with all other permits to be obtained in accordance with
project  schedule  and with the  Company  acting  as  project  manager  for each
designated project.

         In accordance  with the terms of the  agreement,  Summa is to receive a
15% equity  interest in the Company  (assuming its  compliance  with each of its
warranties and representations).  Additionally,  Summa has already received from
the  Company a $65,000  mobilization  fee to cover all to its  direct  costs and
attendant fees incurred with respect to the transaction  described.  The Company
has also paid the sum of $200,000 to Summa's designated counsel as and for legal
fees  and  expenses   directly   related  to  this   transaction  and  with  the
understanding  that (a) any further legal fees shall be the  obligation of Summa
and (b) if for any reason  other than the  Company's  failure to  perform,  such
$200,000 is to be fully refunded to the Company.

         The  foregoing  is  intended  as a brief  summary  and  overview of the
agreements  between the  Company,  Summa and any other  parties  involved in the
transaction  described above and does not purport to state each of the terms and
conditions  involved in such  transaction but rather attempts to highlight those
portions of the transaction which management deems most pertinent.

         Notwithstanding  all or any  portion of the above and the fact that the
described  transactions are being actively  pursued by all parties  thereto,  no
funds have been  received  by the Company as of July 15, 1999 nor have any final
documents  intended  to evidence  transfer of funds been  executed so as to make
fund transfer and delivery eminent.

Employees

         The Company  currently  has 37 full time  employees  as well as certain
contract  staff members and part time employees as  hereinafter  indicated.  The
Company's  North America  operations  including the  corporate  headquarters  in
Dublin,  Ohio employs four (4) full time employees,  two (2) part time employees
and eight (8) contract  staff members.  APC in Switzerland  employs one (1) part
time staff member and one (1) contract staff member.Seiler TSB GmbH in Freiberg,
Germany  employs  eighteen (18) full time  employees and one (1) contract  staff
member. SABD GmbH in Berlin,  Germany employs 14 full time employees and one (1)
contract staff member.  ANC in  Seibersdorf,  Austria  employs one (1) full time
employee and two (2) contract staff members.

ITEM 2.           DESCRIPTION OF PROPERTY

         Seiler's corporate  headquarters are located at 5115 Parkcenter Avenue,
Suite 270, Dublin,  Ohio 43017, its telephone number is 614-792-0400 and its fax
number is 614-792- 0474. The Company  currently has a five -year lease for these
premises that runs until April 1, 2004.

         The Company  also has a five-year  lease with an option to purchase for
its Coshocton,  Ohio facility. The address for this facility is 405 Brewer Lane,
Coshocton, Ohio 43812.

         Seiler  TSB currently owns the property and buildings for its Freiberg,

                                      -13-

<PAGE>



Germany  plant  facility.  This facility is located at Frauensteiner Strasse 81,
D-09599. Freiberg, Germany.

         SABD  GmbH is  located  at  Landsberger  Allee  400,  D-12681,  Berlin,
Germany. The SABD GmbH Berlin plant facility is currently under a ten-year lease
with an option for an additional ten years.

         ANC is  currently  negotiating  for a two year  lease  that  would  end
December  31,  2001 with an option for an  additional  two years in  Seiberdorf,
Austria. Assuming successful consummation of negotiations,  the address for this
facility will be OEFZ, Seibersdorf, Austria.

         For  further  information  with  respect to terms of  leases,  monetary
obligations  thereunder and related matters,  reference is herewith made to Note
16 to the audited financial statements which are part of this Form 10-KSB.


ITEM 3.           LEGAL PROCEEDINGS

         The Company currently is not a party to any material  litigation in the
United States.

         The  Company  is a party to a number  of  legal  proceedings  commenced
outside the United States and most particularly in both Switzerland and Germany.
For  summarized  information  regarding  such legal  proceedings,  reference  is
herewith made to Note 17 to the audited  financial  statements which are part of
this Form 10-KSB.


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

         No matters  were  submitted  to a vote of security  holders  during the
Company's fourth quarter.


                                      -14-

<PAGE>



                                     PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         (a) Marketing Information. The Company's Common Stock, $.0001 par value
(the "Common  Stock") was listed on the NASDAQ Small Cap Market and traded under
the  symbol  SEPC(E)  until  October  12,  1998  delisting.  Since such date the
Company's  Common Stock has only traded in the National  Quotation  Data Service
("pink sheets").  The following table sets forth for the periods indicated,  the
range of high and low bid prices on the dates indicated for the Company's Common
Stock for each full quarterly period. The data covers the two most recent fiscal
years and any  subsequent  interim  period for which  financial  statements  are
included and/or required to be included,  as well as data for periods subsequent
to March 31, 1999.
<TABLE>
<CAPTION>

Fiscal Year Ended March 31, 1998                                       Quarterly Common Stock Price
           By Quarter                                                         Ranges(1)(2)
Quarter  Date                                                            High             Low
<S>     <C>                                                            <C>              <C>

1st      June 30, 1997                                                 $18.5625         $13.8750
2nd      September 30, 1997                                             17.2500           8.6250
3rd      December 31, 1997                                              15.7500           9.0000
4th      March 31, 1998                                                 12.3750           4.3215

Fiscal Year Ended March 31, 1999                                       Quarterly Common Stock Price
          By Quarter                                                          Ranges (1)(2)
Quarter  Date                                                            High             Low

1st      June 30, 1998                                                 $ 7.50           $ 1.3125
2nd      September 30, 1998                                              3.75             1.3215
3rd      December 31, 1998                                                 (3)                (3)
4th      March 31, 1999                                                    (3)                (3)

Fiscal Year Ended March 31, 2000                                       Quarterly Common Stock Price
          By Quarter                                                          Ranges (1)(2)
Quarter  Date                                                            High             Low

1st      June 30, 1999                                                 $   (3)          $     (3)
-------------------
</TABLE>
(1)      The existence of limited or sporadic quotations should not of itself be
         deemed to constitute an  "established  public  trading  market." To the
         extent that limited trading in the Registrants's Common Stock has taken
         place,  such  transactions  have been  limited to the  over-the-counter
         market for periods indicated  subsequent to October 12, 1998 delisting.
         Since  October 12, 1998,  all prices  indicated  are as reported to the
         Registrant by  broker-dealer(s)  making a market in its common stock in
         the National Quotation Data Service ("pink sheets").  Since October 12,
         1998 the  Registrant's  Common  Stock  was not  traded or quoted on any
         automated   quotation  system  other  than  as  indicated  herein.  The
         over-the-counter market and other quotes indicated reflect inter-dealer
         prices  without  retail  mark-up,  mark-down or  commission  and do not
         necessarily  represent actual  transactions.  Prior to October 12, 1998
         delisting and for all periods indicated above, the Registrant's  Common
         Stock was traded on the NASDAQ SmallCap Market.

                                      -15-

<PAGE>



(2)      All prices  indicated  herein and  throughout  this Form 10-KSB  unless
         otherwise indicated take into account and retroactively reflect a 1 for
         6 reverse stock split effective October 1, 1998.
(3)      During the  periods  indicated  the  Company's  Common  Stock  "traded"
         sporadically  on the National  Quotation Data Service ("pink  sheets").
         The  Company  has been unable to obtain  quarterly  Common  Stock price
         ranges  for  these  periods  but has been  able to  ascertain  that the
         closing  bid and asked  prices as of June 30, 1999 were $1.25 and $2.00
         respectively in very limited trading.

         (b) Holders. As of June 30, 1999 the approximate number of stockholders
of the  Company's  Common Stock (as  indicated on its transfer  agent's June 30,
1999  certified  list of  stockholders)  amounted  to 419 persons  and/or  firms
(inclusive of those brokerage  firms and/or  clearing  houses and/or  depository
companies holding the Company's securities for their respective clientele - each
such brokerage house,  clearing house and/or depository firm being considered as
one record  holder).  The exact  number of  beneficial  owners of the  Company's
securities is not known but would necessarily exceed the number of record owners
indicated above in that brokerage firms and/or clearing house and/or  depository
companies are normally  record owners for presumably any number of  unidentified
beneficial owners.

         (c) Dividends.  The payment by the Registrant of dividends,  if any, in
the  future  rests  within the  discretion  of its Board of  Directors  and will
depend,   among  other  things,  upon  the  Company's   earnings,   its  capital
requirements and its financial condition, as well as other relevant factors. The
Registrant  has not paid or declared any  dividends  upon its Common Stock since
its  inception  and,  by  reason  of  its  present   financial  status  and  its
contemplated financial  requirements,  does not contemplate or anticipate paying
any dividends upon its Common Stock in the foreseeable future.

         (d) NASDAQ  Delisting.  By decision  dated October 12, 1998, the NASDAQ
Listing  Qualifications  Panel (the "Panel")  determined to delist the Company's
securities due to the Company's  failure to demonstrate  its ability to maintain
compliance  with the bid price and filing  requirements  set forth in NASD Rules
4310(c)(4)  and  4310(c)(14),  while at the same  time  raising  concerns  about
whether  the Company  could  sustain  compliance  with the net  tangible  assets
requirements  over the long term.  This decision was appealed by the Company and
affirmed by the NASDAQ  Listing and Hearing  Review  Council (the  "Council") on
April 1, 1999.

         Non compliance with aforementioned NASD Rule 4310(c)(14) related to the
fact that the Company  had not timely  filed its Form 10-K for fiscal year ended
March 31, 1998,  while non compliance with  aforementioned  NASD Rule 4310(c)(4)
related to the fact that the  Company  failed to  maintain  compliance  with the
minimum  bid  requirement  price of $1.00 for more than 30  consecutive  trading
days.  The Council  further  noted in its April 1, 1999  decision that while the
Company  had  subsequently  filed its  aforementioned  March 31,  1998 10-K such
report was almost four months delinquent and the Company remained  delinquent in
the filing of its Forms 10-Q for  quarters  ended June 30, 1998,  September  30,
1998 and December 31, 1998;  finding that the  Company's  failure to comply with
these  requirements  for an extended period of time served as a separate grounds
for the Council's  affirming of the Panel's decision.  The foregoing  summarizes
certain pertinent portions of the Council's aforesaid April 1, 1999 decision but
does not purport to be a complete review of all statements contained therein.


         Since  delisting  the Company has changed auditing firms and is current
with  respect to its Exchange Act of 1934  reporting  requirements  having since

                                      -16-

<PAGE>



filed aforesaid  10-Qs for  quarters  ended June 30,  1998,  September  30, 1998
and December 31, 1998.

         (e)      Recent Sale of Unregistered Securities.

         During the fiscal  years  ended  March 31,  1998 and March 31, 1999 the
Company  engaged  in sales of  unregistered  securities  (including  convertible
debentures ("debentures")) as follows:

1 a. During the month of  November  1997 the Company  received  net  proceeds of
$2,457,000  (out of gross  proceeds of  $3,000,000)  from the sale of debentures
bearing interest at the rate of 7% per annum in accordance with Regulation D and
exemption  provided  by Rule  506.  Such  debentures  provided  for a 25% to 35%
discount from market dependent upon certain specific factors. $2,000,000 of such
debentures  was sold to Dominion  Capital  Fund,  Ltd.  and  $1,000,000  of such
debentures was sold to Sovereign  Partners LP - both  identifying  themselves as
accredited investors.

1 b. In June of 1998 the  Company  issued  (to  Dominion  Capital  Fund Ltd.) 7%
debentures  for gross proceeds of $220,000 and in August 1998 the Company issued
(to Sovereign Partners LP) additional debentures for gross proceeds of $230,000.
In each  instance  these  debentures  were  issued to  accredited  investors  in
accordance with Regulation D and Rule 506 and the debentures were convertible at
a 35% discount from market.

1 c. In January of 1999 the Company  entered  into a rollover  transaction  with
those debenture holders  indicated in 1 a and b above,  pursuant to which (after
providing for  incentives,  penalties and interest) the  outstanding  debentures
were converted  into new  debentures for gross proceeds of $6,055,280;  of which
the Company  received  (in  non-rollover  funds) gross  proceeds of  $1,158,000;
$758,000 being  received in January 1999,  $150,000 being received in April 1999
and the  balance  of  $250,000  being  received  in May 1999.  The  transactions
discussed in this paragraph were conducted in accordance  with  Regulation D and
Rule 506 and all  debentures  issued were issued to  accredited  investors.  The
debentures  as rolled over or as newly issued each provide for  conversion  at a
discount from market of 30% and bear interest at the rate of 7% per annum. These
debentures  were  issued  to the same  entities  who  purchased  the  debentures
indicated in Item 1 a and b above.

2. In January of 1998 the Company  received  gross  proceeds of $2,000,000  from
Wilfried Groote, an accredited  investor,  in accordance with exemption provided
by Section 4(2) of the Securities Act of 1933 in exchange for which it issued to
Mr. Groote an aggregate of 416,667 restrictive shares.

3. In July of 1998 the  Company  received a loan of  $250,000  from  Sheltsville
Company SA ("Sheltsville").  Pursuant to February 18, 1999 agreement the Company
issued 294,444  restrictive shares to Sheltsville in exchange for extinguishment
of such outstanding  indebtedness  (as previously  evidenced by July 20, 1998 8%
unsecured convertible promissory note).

4. In July of 1998 the Company  received a loan of $150,000  from Peter Ruegg as
evidenced by a July 20, 1998 8% unsecured convertible  promissory note. Pursuant
to February 1999 agreement the Company issued 500,000  restrictive shares to Mr.
Ruegg in exchange for extinguishment of such indebtedness.


                                      -17-

<PAGE>



5. On October 12, 1998 the Company issued 3,333,333 restrictive shares of common
stock  to  Maxon  Trade &  Finance  Ltd.  SA in  exchange  for  cancellation  of
outstanding debt (inclusive of accrued interest) approximating  $2,056,000.  See
also Part I, Item 1 "Description of Business - Licensing Agreements".

6. In accordance with  subscription  agreements and  convertible  debentures the
Company  received in February  1999 (a) $175,000  from  Scorpion  Nominees  Ltd.
("Scorpion")  and  (b)  $30,000  from  Marcuard  Cook & Cie  S.A.  ("Marcuard").
Pursuant to  agreements  in March 1999 (a)  Scorpion  exercised  its  conversion
rights in its  entirety in exchange  for 286,885  restrictive  shares of Company
common stock while (b) Marcuard  exercised its conversion rights in its entirety
in exchange for 49,180 restrictive shares of Company common stock. Both Scorpion
and  Marcuard  represented   themselves  to  be  accredited  investors  and  the
transactions referred to were conducted in accordance with Regulation D and Rule
506.

7. Pursuant  to  February  1999 agreement the Company issued 214,141 restrictive
shares  to Rolcan Finance Ltd. ("Rolcan") in exchange for extinguishment of then
outstanding debt from the Company to Rolcan amounting to $107,070.

8 a. In November  of 1998 and  December  of 1998 the  Company  entered  into two
separate  subscription  agreements and debentures with Apex Holding SA ("Apex"),
the first of which was for gross  proceeds of $200,000  while the latter was for
gross proceeds of $865,000.  In each instance these agreements were entered into
in  accordance  with  Regulation  D  and  Rule  506  and  the  debenture  holder
represented itself to be an accredited investor.

8 b. In July of 1999 and subsequent to negotiations between the Company and Apex
the $200,000  debenture was extinguished in its entirety in exchange for 417,811
restrictive  shares while the $865,000  debenture was similarly  extinguished in
its entirety in exchange for 1,508,272 restrictive shares.

8 c. The  issuance  of  the  restrictive  shares  indicated  in 8 a and b  above
occurred subsequent to the close of the Company's March 31, 1999 fiscal year and
subsequent to the June 30, 1999 date being utilized  throughout this Form 10-KSB
as a "record  date" so as to determine  shares  outstanding  and  percentage  of
ownership.  For these reasons Apex does not appear as a principal stockholder in
Item 11 hereof  nor is  mention  made of it in Item 9 hereof as same  relates to
Section 16(a) compliance under the Exchange Act.

         See also Note 10 to  audited  financial  statements  and  "Management's
Discussion  and  Analysis - Liquidity  and  Capital  Resources"  for  additional
information  regarding  sale of  securities  and/or  manner in which Company has
financed its ongoing operations.



                                      -18-

<PAGE>



Item 6            MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

                  YEAR ENDED MARCH 31, 1999 COMPARED TO YEAR ENDED MARCH 31,
                  1998

Revenues

         The Company commenced operations during the year with the completion of
the recycling facility in Freiberg,  Germany by the end of August 1998, with one
vitrification  line  active.  In addition the Company's subsidiary SABD has been
operating a leased chemical/physical  treatment plant which is designed to treat
liquid  hazardous  waste  since  July  1, 1998.  Accordingly,  the  Company  has
generated revenues of $1,288,380 for the year.

         Gross  profit on the above  revenues  was $743,017 or 58%.

Operating Expenses

         Operating  expenses  were $8,028,502 for the year ended March  31,1999,
compared to  $11,522,229  for the year ended March 31, 1998. The principal items
were valuation adjustments of  loans  for High Temperature Vitrification Systems
of  $3,443,516  compared  to  $2,696,855  for  the  year  ended  March 31, 1998,
salaries, wages and related fringe   benefits  of $1,314,374  for the year ended
March 31,  1999,  compared  to $800,607 for the prior years  comparable  period,
general and administrative expenses of $577,137  for the  year  ended  March 31,
1999 compared to  $1,644,901 for the year ended March 31, 1998, professional and
other consulting fees of $1,485,373 for the current year versus $382,813 for the
prior  year  and  depreciation and amortization of $1,208,102 for the year ended
March 31, 1999  compared to $358,603  for the year ended March 31, 1998.

         Interest  and  other financing expense increased to $1,375,345  for the
year ended March 31, 1999 compared to $455,987 for the year ended March 31, 1998
due to increased  borrowings  under the Dresdner Bank  Financing  agreements and
interest on convertible notes and debentures.




                                      -19-

<PAGE>




Liquidity and Capital Resources

         The Company funds its capital requirements with a combination of equity
financing, government subsidies and debt financing.  The Company utilizes  these
sources of capital to construct HTV Systems, perform  research  and  development
related  to  these  systems,  and  meet  the daily requirements of operating the
Company.

         In  November  1997  the Company received $2,457,000 from the sale of 7%
cumulative convertible debentures pursuant to a registration under Regulation D.
Fifty  percent  of  the  debentures  are convertible into shares of common stock
at the option of the debenture holder at the lesser of (1) 120%  of  the  5  day
average  closing  bid  price  for  the  5 trading days immediately preceding the
closing date, or (2) 75% of the 5 day  average  closing  bid  price  for  the  5
trading  days  immediately  preceding  the  applicable  conversion  date for any
conversion dates that are after the earlier of the registration  effective  date
or  120  days  following  the  closing  date.  The  purchaser  may  convert  the
debentures into common stock at the  lesser of (1) 120% of the five day  average
bid price for the 5 trading days immediately preceding the closing  date  or (2)
65% of the 5 day average closing bid price for the  5  trading  days immediately
preceding the applicable conversion date for any conversion dates after 120 days
following  the  closing  date.  The  remaining  50%  of  the  debentures  may be
converted  at  75%  or  65% of the five day average closing bid price  within or
without  120  days  following  the  closing  date  respectively. Interest on the
debentures is payable in cash or common stock upon conversion,  at the option of
the Company.  Interest of $73,600  has  accrued  since the convertible debenture
issuance.

         In  June  1998,  the  Company  received  $220,000  from  the sale of 7%
cumulative convertible debentures pursuant to a registration under Regulation D.
Interest  on  the debentures is payable in cash or common stock upon conversion,
at  the  option  of  the  Company.  The holder may convert the  debentures  into
common stock at the lesser of (1) 120% of the 5 day  average bid price for the 5
trading  days  immediately  preceding  the  closing date or (2) 65% of the 5 day
average  closing  bid  price  for  the 5 trading days immediately  preceding the
applicable conversion date.

         In  July  1998,  the  Company  received  $230,000  from  the sale of 7%
cumulative  debentures  pursuant to a registration under  Regulation D. Interest
on the debentures is payable in cash or common  stock  upon  conversion,  at the
option of the Company.  The holder may  convert the debentures into common stock
at the lesser of (1) 65% of the 5 day average bid price  for  the 5 trading days
immediately preceding the closing date or (2) 120% of the 5 day average  closing
bid price for the 5 trading days immediately preceding the applicable conversion
date.



                                      -20-

<PAGE>



         In  November  1998,  the Company received  $200,000 from the sale of 7%
cumulative convertible debentures.  Interest on the  debentures  is  payable  in
cash or common stock upon conversion, at the option of the Company.  The  holder
may convert the debentures  into common stock at the lesser of (1) 120% of the 5
day average bid price for the 5 trading  days  immediately preceding the closing
date or (2) 65% of the 5  day  average  closing bid price for the 5 trading days
immediately preceding  the  applicable conversion  date.  In July of 1999  these
debentures were  extinguished  for 417,811  restrictive shares.

         On December 14, 1998, the Company received $865,000 from the sale of 7%
cumulative  convertible  debentures.  Interest  on the  debentures is payable in
cash or common stock upon conversion,  at the option of the Company.  The holder
may convert the debentures into common stock at the lesser of (1) 120%  of the 5
day average bid price for the 5 trading days  immediately  preceding the closing
date or (2) 65% of the 5  day  average  closing bid price for the 5 trading days
immediately preceding the applicable conversion date.

         In  January  of  1999  the Company entered into a rollover  transaction
with the debenture holders of November 1997 and June and July 1998, pursuant  to
which (after providing for  incentives,  penalties of $852,290  and  interest of
$283,452) the outstanding debentures were converted  into  new  debentures   for
gross  proceeds  of  $6,055,280,  7%  convertible  debentures,  convertible into
common stock of the Company.  The Company received $1,158,000 cash proceeds from
the offering.  These  debentures  are  collateralized  by  the  Company's  land,
inventory, plant and equipment in Freiburg,  Germany and  guaranteed  by the 50%
holder  of  STSB.  Penalties  are  included in other  financing  expenses in the
Statement of Operations

         On  January  15,  1999 the Company received $20,000 from the sale of 7%
cumulative convertible debentures.  Interest on the  debentures  is  payable  in
cash or common stock upon conversion, at the option of the  Company.  The holder
may convert the debentures  into common stock at the lesser of (1)  60% of the 5
day average bid price for the 5 trading days immediately  preceding  the closing
date or (2) 125% of the 5 day  average closing bid price for the 5  trading days
immediately preceding the applicable conversion date. Pursuant  to an  agreement
in  March  1999  the  holder  converted the debentures into 32,787 shares of the
Company's common stock.

         On  January  12, 1999, the Company received $20,000 from the sale of 7%
cumulative convertible debentures. Interest on the debentures is payable in cash
or common stock upon conversion,  at the  option of the Company.  The holder may
convert the debentures  into common stock at the lesser of (1)  60% of the 5 day
average bid price for the 5 trading days immediately preceding the closing  date
or (2) 125% of the 5 day average closing  bid  price  for  the  5  trading  days
immediately  preceding the applicable conversion date.

                                      -21-

<PAGE>



         On  January  15, 1999, the Company received $20,000 from the sale of 7%
cumulative convertible debentures. Interest on the debentures is payable in cash
or common stock upon conversion, at the option of the Company.  The  holder  may
convert  the  debentures into common stock at the lesser of (1) 60% of the 5 day
average bid price for the 5 trading days immediately preceding the closing  date
or (2) 125% of the 5 day  average closing  bid  price for  the  5  trading  days
immediately preceding the applicable conversion date. Pursuant  to an  agreement
in  March  1999 the holder exercised its conversion  rights in its  entirety  in
exchange for 32,787 restrictive shares of Company common stock.

         On  January 15, 1999,  the Company received $10,000 from the sale of 7%
cumulative convertible debentures. Interest on the debentures is payable in cash
or common stock upon conversion, at the option of the Company.  The  holder  may
convert the debentures into common stock at the  lesser  of (1) 60% of the 5 day
average bid price for the 5 trading days immediately preceding the closing  date
or (2) 125% of the 5 day average closing  bid  price  for  the  5  trading  days
immediately preceding the applicable conversion date.

         On February 12, 1999, the Company received $175,000 from the sale of 7%
cumulative convertible debentures. Interest on the debentures is payable in cash
or common stock upon conversion, at the option of the Company.  The  holder  may
convert the debentures  into common stock at the lesser of (1)  60% of the 5 day
average bid price for the 5 trading  days immediately preceding the closing date
or (2) 125% of the 5 day average closing  bid  price  for  the  5  trading  days
immediately preceding the applicable conversion date. Pursuant  to an  agreement
in March 1999 the holder exercised  its  conversion  rights in its  entirety  in
exchange for 286,885 restrictive shares of Company common stock.

         On February 16, 1999, the Company received $10,000  from the sale of 7%
cumulative convertible debentures. Interest on the debentures is payable in cash
or common stock upon conversion, at the option of the  Company.  The holder  may
convert the debentures into common stock at the lesser  of  (1) 60% of the 5 day
average bid price for the 5 trading days immediately preceding the closing  date
or (2) 125% of the 5 day average closing  bid  price  for  the  5  trading  days
immediately preceding the applicable conversion date. Pursuant  to an  agreement
in March 1999 the holder exercised  its  conversion  rights in its  entirety  in
exchange for 16,393 restrictive shares of Company common stock.



                                      -22-

<PAGE>



         For purposes of the accompanying financial statements, the  convertible
debentures  are  recorded  as  additional  paid  in  capital since the debenture
agreement does not  provide for repayment of the debenture in cash and  requires
a  mandatory  conversion  into  common stock no later than 24 or 36 months after
issuance.

         In  July  1998  the  Company  received  gross proceeds of $250,000  and
$150,000,  pursuant  to  the  issuance of unsecured convertible promissory notes
bearing interest at 8% per annum.  Pursuant to a February 18, 1999 agreement the
Company issued 294,444 restrictive shares, on May 21, 1999, to the holder of the
$250,000  note  in  exchange  for such outstanding indebtedness.  Pursuant to an
additional agreement in February 1999, the Company  issued  500,000  restrictive
shares, in February 1999, in exchange for the $150,000  convertible  note
outstanding.

         In  January  1999  the Company  entered into a financing agreement with
Summa Capital Corporation ("Summa"), a British West Indies company  specializing
in  Asset  Management  and  Project  Financing,  whereby Summa agreed to provide
(through others) up to $75,000,000 of financing to Seiler for  the  construction
of processing  plants, research and development and general  business expansion;
either through issuance of debentures or utilization of note purchase agreements
(or similar debt documents) with accredited investors. Assuming specific project
financing  the  Company  will  be  required to deliver a first lien position for
financing participants so as to secure assets for a specific financed project.

         Agreed  to  financing  terms include: (1) a financing term of 12  years
with interest at the rate of 7.875 % per  annum,  with  interest  limited to and
payable only on those funds drawn-down  for  each  specific  projects  and  with
Seiler's right to defer interest payment for the first 24  months  subsequent to
each draw-down date, (2) Seiler being required to obtain contractually   binding
agreements for processing waste and the sale of the recycled products for 65% of
vitrification system capacity with the understanding that contractual agreements
(for the first 2 U.S. projects  and  the first 2 foreign country projects) shall
be  in  place  within  six  months of the time that the identified vitrification
system is in  commercial  operation  and with the  further   understanding  that
contractual agreements for all subsequent projects shall  be  in  place prior to
project finding draw-down and (3) the Company  being  required,  prior  to draw-
down, to have all necessary  environmental  permits and  determinations in place
with all other permits to be obtained in  accordance  with the Company acting as
project manager for each designated project.

         In  accordance  with  the terms of the agreement, Summa is to receive a
15% equity interest in the Company (assuming its compliance with each   of   its
warranties and representations).  Additionally,  Summa has already received from
the Company a $65,000  mobilization  fee  to  cover  all  its  direct  costs and
attendant fees incurred with respect to the transaction  described.  The Company
has  also  paid the sum of $200,000 to  Summa's  designated  counsel  as and for

                                      -23-

<PAGE>



         legal fees and expenses directly related to this  transaction  and with
the understanding that (a) any further legal fees shall  be  the  obligation  of
Summa and (b) if for any reason  other than the  Company's  failure to  perform,
such $200,000 is to be fully refunded to the Company.

         Notwithstanding  all or any  portion of the above and the fact that the
described transactions are being actively  pursued  by  all  parties thereto, no
funds have been received by  the Company as of July 15,  1999 nor have any final
documents intended to evidence transfer of funds been executed  so  as  to  make
fund transfer and delivery eminent.


Effect of Currency on Results of Operations

         The results of operations and the financial position  of the  Company's
subsidiaries  outside  the  United  States  is reported in the relevant  foreign
currency (primarily Swiss Francs and German Marks) and then  translated  into US
dollars at the applicable  foreign  exchange rate for inclusion in the Company's
consolidated financial statements.  Accordingly,  the  results  of operations of
such subsidiaries as reported in US dollars  can vary significantly  as a result
of changes in currency exchange rates (in particular, the exchange rates between
the Swiss Franc, the German Mark and the US dollar).






















                                      -24-

<PAGE>



              SEILER POLLUTION CONTROL SYSTEMS, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                       YEARS ENDED MARCH 31, 1999 AND 1998


                                    Contents









Index.......................................................... .............F-1
Report of Independent Auditors...............................................F-2
Audited Consolidated Financial Statements:
Consolidated Balance Sheets..................................................F-3
Consolidated Statements of Operations........................................F-4
Consolidated Statements of Stockholders' Equity..............................F-5
Consolidated Statement of Cash Flows.........................................F-6
Notes to Consolidated Financial Statements...........................F-7 to F-23


































                                      F - 1

<PAGE>



                         INDEPENDENT AUDITORS' REPORT



To the Board of Directors
Seiler Pollution Control Systems, Inc. and Subsidiaries


         We have audited the accompanying  consolidated  balance sheet of Seiler
Pollution  Control Systems,  Inc. and Subsidiaries as of March 31, 1999, and the
related consolidated  statements of operations,  stockholders'  equity, and cash
flows for the years ended March 31, 1999 and 1998 . 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 audit.

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

         In our opinion, the consolidated financial statements referred to above
present  fairly,  in all material  respects,  the  financial  position of Seiler
Pollution  Control Systems,  Inc. and Subsidiaries as of March 31, 1999, and the
results of its  operations and its cash flows for the years ended March 31, 1999
and 1998, in conformity with generally accepted accounting principles.

         The accompanying  financial statements have been prepared assuming that
Seiler Pollution  Control  Systems,  Inc. and  Subsidiaries,  will continue as a
going concern. As discussed in Note 1 to the financial statements, the Company's
net working  capital  deficiency  raises  substantial  doubt about the  entity's
ability to continue as a going  concern.  Management's  plans in regard to these
matters are also  described in Note 1. The  financial  statements do not include
any adjustments  relating to the  recoverability  and classification of reported
asset  amounts and  classification  of  liabilities  that might  result from the
outcome of this uncertainty.



                                          /s/ Feldman Sherb Horowitz & Co., P.C.
                                              Feldman Sherb Horowitz & Co., P.C.
                                              Certified Public Accountants
New York, New York
June 30, 1999

                                       F-2

<PAGE>

            SEILLER POLLUTION CONTROL SYSTEMS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                 MARCH 31, 1999

                                     ASSETS
<TABLE>
<CAPTION>
<S>                                                              <C>

CURRENT ASSETS:
   Cash                                                          $        96,419
   Accounts receivable                                                   163,723
   Prepaid expenses and sundry receivables                               807,382
   Inventories                                                             5,603
                                                                  --------------
         TOTAL CURRENT ASSETS                                          1,073,127
                                                                  --------------

OTHER ASSETS
   Licensing agreements, less accumulated amortization of
       $1,812,719 and $1,495,384                                       2,947,284
   Other assets                                                          126,548
                                                                  --------------
                                                                       3,073,832
                                                                  --------------

PROPERTY, PLANT, AND EQUIPMENT                                        10,373,273
                                                                  --------------
                                                                 $    14,520,232
                                                                  ==============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                              $     1,311,808
   Current portion of long - term debt                                 4,794,026
   Accrued expenses                                                    1,285,654
   Other current liabilities                                              42,796
                                                                  --------------
       TOTAL CURRENT LIABILITIES                                       7,434,284
                                                                  --------------
LEASES PAYABLE                                                           618,949

LOANS PAYABLE - STOCKHOLDERS                                             539,131

DEFERRED INCOME - GOVERNMENT SUBSIDIES                                 3,335,410

CONVERTIBLE NOTES PAYABLE                                                900,000

MINORITY INTEREST                                                         65,161

STOCKHOLDERS' EQUITY:
   Common stock, $0.0001 par value, authorized 35,000,000 shares,
       issued and outstanding 8,815,168                                      902
   Additional paid in capital                                         38,823,982
   Accumulated deficit                                              (33,500,662)
   Accumulated other comprehensive loss                              (3,696,925)
                                                                  --------------
       TOTAL STOCKHOLDERS' EQUITY                                      1,627,297
                                                                  --------------

                                                                 $    14,520,232
                                                                  ==============
</TABLE>


                 See notes to consolidated financial statements

                                      F - 3
<PAGE>

             SEILER POLLUTION CONTROL SYSTEMS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>


                                                     Year ended March 31,
                                              ----------------------------------
                                                     1999            1998
                                              --------------    ----------------

<S>                                         <C>                <C>

REVENUE                                     $      1,288,380   $           -

COST OF SALES                                        545,363               -
                                              --------------    ----------------

GROSS PROFIT                                         743,017               -
                                              --------------    ----------------

OPERATING EXPENSES
 Research and development                               -             5,638,450
 Write off of loans for HTV Systems                3,443,516          2,696,855
 Professional and other consulting fees            1,485,373            382,813
 Salaries, wages and related fringe benefits       1,314,374            800,607
 General and administrative                          577,137          1,644,901
 Depreciation and amortization                     1,208,102            358,603
                                              --------------    ----------------
                                                   8,028,502         11,522,229
                                              --------------    ----------------

LOSS FROM OPERATIONS                               7,285,485         11,522,229
                                              --------------    ----------------

OTHER INCOME AND (EXPENSES):
 Miscellaneous                                        89,684               -
 Interest income                                         529             46,622
 Interest and other financing expense             (1,375,345)          (455,987)
                                              --------------    ----------------
     TOTAL OTHER INCOME AND (EXPENSES)            (1,285,132)          (406,365)
                                              --------------    ----------------

LOSS BEFORE MINORITY INTEREST                      8,570,617         11,928,594

 Minority interest                                      -            (1,791,901)
                                              --------------    ----------------

NET LOSS                                     $     8,570,617   $     10,136,693
                                              ==============    ================

NET LOSS PER SHARE - BASIC                   $          1.45   $           2.82
                                              ==============    ================

WEIGHTED SHARES USED IN COMPUTATION - BASIC        5,908,624          3,594,679
                                              ==============    ================


</TABLE>







                 See notes to consolidated financial statements

                                      F - 4
<PAGE>



             SEILER POLLUTION CONTROL SYSTEMS, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                       YEARS ENDED MARCH 31,1999 AND 1998

<TABLE>
<CAPTION>


                                                                                Accumulated
                                     Common stock    Additional                    Other
                                   ----------------   Paid-in     Accumulated  Comprehensive
                                     Shares  Amount   Capital       Deficit         Loss        Total
                                   ---------------------------------------------------------------------
<S>                                <C>       <C>    <C>          <C>            <C>          <C>
BALANCE, MARCH 31, 1997            3,523,685 $ 352  $ 26,540,202 $ (12,906,183) $  (484,008) $ 13,150,363

Exercise of stock options under
1996 Non - Statutory Stock
Option Plan                            3,066    -         10,051          -            -           10,051

Issuance of common stock
for cash                             416,667    42     1,999,958          -            -        2,000,000

Issuance of convertible debentures      -       -      2,457,000          -            -        2,457,000

Foreign currency translation loss       -       -          -              -      (2,241,371)   (2,241,371)

Beneficial conversion feature of
convertible debentures                  -       -      1,615,386    (1,615,386)        -             -

Net loss                                -       -          -       (10,136,693)        -      (10,136,693)
                                   ----------------------------------------------------------------------
BALANCE, MARCH 31, 1998-(restated) 3,943,418   394    32,622,597   (24,658,262)  (2,725,379)    5,239,350

Issuance of common stock
for debt                           3,333,333   333     2,055,935          -            -        2,056,268

Issuance of common stock
for debentures                     1,538,417   154          (154)         -            -             -

Issuance of convertible debentures      -       21     3,627,338          -            -        3,627,359

Interest on debentures                  -       -        246,483          -            -          246,483

Foreign currency translation loss       -       -          -              -        (971,546)     (971,546)

Beneficial conversion feature of
convertible debentures                  -       -        271,783      (271,783)        -             -

Net loss                                -       -          -        (8,570,617)        -       (8,570,617)
                                   ----------------------------------------------------------------------
BALANCE, MARCH 31, 1999            8,815,168 $ 902  $ 38,823,982 $ (33,500,662) $(3,696,925) $  1,627,297
                                   ======================================================================

</TABLE>


                 See notes to consolidated financial statements

                                      F - 5
<PAGE>



            SEILER POLLUTION CONTROL SYSTEMS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>

                                                      Year ended March 31,
                                               ---------------------------------
                                                  1999                 1998
                                               -------------      --------------
<S>                                           <C>                <C>

CASH FLOW FROM OPERATING ACTIVITIES:
 Net loss                                     $  (8,570,617)     $  (10,136,693)
                                               -------------      --------------

 Adjustments to reconcile net loss to net
 cash used in operating activities:
  Depreciation and amortization                   1,208,102             320,205
  Minority interest in net losses
   of subsidiaries                                  (22,937)                -

 Write off of loans for HTV Systems               3,443,516           2,696,855

 Changes in operating assets and liabilities:
  Increase in accounts receivable                  (163,723)                -
 (Increase) decrease in prepaid expenses
   and sundry receivables                          (664,278)          1,927,350
  Increase in inventories                            (5,603)                -
  Increase in deposits                                 -                (15,734)
  (Increase) in other assets                        331,122            (331,236)
  Increase in accounts payable                       41,412             297,977
  (Decrease) in accrued expenses                    850,007             (56,033)
  Increase in other current liabilities              42,796                -
  Increase in Government subsidies                   25,748                -
                                               -------------      --------------
                                                  5,086,162           4,839,384
                                               -------------      --------------

CASH USED IN OPERATING ACTIVITIES                (3,484,455)         (5,297,309)
                                               -------------      --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment             (2,250,395)           (772,125)
  Advances for High Temperature
   Vitrification Systems                           (126,707)         (6,215,348)
                                               -------------      --------------

CASH USED IN INVESTING ACTIVITIES                (2,377,102)         (6,987,473)
                                               -------------      --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock                -             2,010,051
  Proceeds from Government subsidies                    -             3,728,266
  Issuance of convertible debentures              3,873,821           2,457,000
  Proceeds from convertible notes payable           900,000                -
  Proceeds from bank loans                        1,292,168           4,371,592
  Payments on loans payable stockholder                 -              (775,159)
  Increase of leases payable                        618,949                -
  Borrowings (payments) of debt
   to stockholder                                  (138,650)               -
                                               -------------      --------------

CASH PROVIDED BY FINANCING ACTIVITIES             6,546,288          11,791,750
                                               -------------      --------------

EFFECT OF EXCHANGE RATE CHANGES                    (971,546)         (3,312,012)
                                               -------------      --------------

NET DECREASE IN CASH                               (286,815)         (3,805,044)

CASH AND CASH EQUIVALENTS - beginning of year       383,234           4,188,278
                                               -------------      --------------

CASH AND CASH EQUIVALENTS - end of year       $      96,419     $       383,234
                                               =============      ==============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash paid during the year for:
     Interest                                 $     250,000     $       367,107
                                               =============      ==============
NON-CASH FINANCING ACTIVITIES:
   Conversion of license agreement payable
     into common stock                        $   2,056,268     $          -
                                               ============       ==============
</TABLE>

                 See notes to consolidated financial statements

                                      F - 6
<PAGE>



             SEILER POLLUTION CONTROL SYSTEMS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                       YEARS ENDED MARCH 31, 1999 AND 1998



1.       ORGANIZATION

                  Seiler  Pollution  Control  Systems,  Inc. (the "Company") was
         incorporated  under  the laws of the  State of  Delaware  in 1983.  The
         Company  presently is an  environmental  service and equipment  company
         which  acquired  the rights to a  technology  called  High  Temperature
         Vitrification  ("HTV") which treats a potentially wide variety of waste
         products.  The HTV process transforms  hazardous waste into non - toxic
         substances  which  can  either be  stored  in a non -  hazardous  waste
         landfill or recycled.

                  The Company's consolidated financial statements include Seiler
         Pollution Control Systems International,  Inc., ("SPCSI") (incorporated
         in Delaware) and Advanced  Pollution  Control ("APC")  (formerly Seiler
         SEPC AG)  (incorporated in Switzerland),  APC's 50%, owned  subsidiary,
         Seiler Trenn -  Schmeizanlagen  Betriebs GmbH (STSB)  (incorporated  in
         Germany),  APC's 100% owned subsidiary Pyrec AG ("Pyrec") (incorporated
         in  Switzerland),  the  Company's  majority  owned  subsidiary Advanced
         Nuclear Control, Inc. ("ANC") (formerly Seiler Nuclear  Control,   Inc)
         (incorporated  in New Jersey) and the  Company's  80% owned  subsidiary
         Seiler    Abfallbehanddlungs    und   Dienstleistungs   GmbH   ("SABD")
         (incorporated in Germany).


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         A.       Basis of Presentation

                           The   Company's   financial   statements   have  been
                  presented  on a  basis  that  it  is a  going  concern,  which
                  contemplates the realization of assets and the satisfaction of
                  liabilities  in the normal  course of  business.  The  Company
                  intends to seek additional  equity capital through  additional
                  equity  offerings  to  adequately  fund  operations,   working
                  capital demands, and growth plans.

                           The  Company  has a  working  capital  deficiency  of
                  $6,361,157  as  of  March  31,  1999.  Accordingly,  continued
                  existence is dependent  upon the Company's  ability to resolve
                  its  liquidity  problem  principally  by obtaining  additional
                  equity  capital  or debt  financing,  neither  of which can be
                  assured.


                                       F-7

<PAGE>



         B.       Principles of Consolidation

                           The  consolidated  financial  statements  include the
                  accounts  of the  Company  and its wholly  owned and  majority
                  owned/controlled   subsidiaries.   All  material  intercompany
                  balances   and   transactions    have   been   eliminated   in
                  consolidation.

         C.       Revenue Recognition

                           Revenues are  recognized  when finished  products are
                  shipped  to  unaffiliated  customers  or  services  have  been
                  rendered,   with  appropriate   provision  for   uncollectible
                  accounts.

         D.       Reclassifications

                           Certain prior year balances have been reclassified to
                  conform with current year presentation.

         E.       Licensing Agreements

                           Licensing   agreements  are  stated  at  cost,   less
                  accumulated  amortization.  Amortization  is computed by using
                  the straight - line method over an  estimated  life of fifteen
                  years  based upon  management's  expectations  relating to the
                  life  of  the  technology  and  current   competitive  markets
                  conditions.  The estimated life is reevaluated each year based
                  upon changes in these factors.

         F.       Property and Equipment

                           Property   and   equipment   are   stated   at  cost.
                  Depreciation  is  provided  for on the  straight - line method
                  over estimated useful lives.

         G.       Use of Estimates

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







                                       F-8

<PAGE>



         H.       Fair Value of Financial Instruments

                           The respective carrying value of certain on - balance
                  - sheet financial  instruments  approximate their fair values.
                  Fair value estimates  discussed  herein are based upon certain
                  market  assumptions  and  pertinent  information  available to
                  management. These financial instruments include cash, accounts
                  receivable, accounts payable and accrued expenses. Fair values
                  are assumed to approximate carrying values for these financial
                  instruments  since  they are short  term in  nature  and their
                  carrying   amounts   approximate   fair  values  or  they  are
                  receivable  or  payable  on  demand.  The  fair  value  of the
                  Company's long - term debt,  which  approximates  its carrying
                  value,  is estimated  based upon the quoted  market prices for
                  the same or similar debt  instruments  or on the current rates
                  offered  to  the  Company  for  debt  of  the  same  remaining
                  maturities.

         I.       Long Lived Assets

                           The  Company  has  adopted   Statement  of  Financial
                  Accounting Standards No. 121 ("SFAS 121"), "Accounting for the
                  Impairment  of Long - Lived Assets and Long Lived Assets to be
                  Disposed of." In accordance with this  statement,  the Company
                  evaluates  the  recovery  of the  carrying  amount of its long
                  lived  assets,  primarily  property  and  equipment,  whenever
                  events or changes in circumstances  indicate that the carrying
                  amount of such  assets may not be fully  recoverable.  If this
                  review  indicates  that the carrying  value of the assets will
                  not be recoverable, as determined based on the estimated non -
                  discounted  cash flows of the  Company  over  their  remaining
                  estimated  useful lives, the carrying amount is reduced by the
                  estimated shortfall of cash flows.

         J.       Loss Per Common Share

                           In  February 1997, the Financial Accounting Standards
                  Board  issued  Statement of Financial Accounting Standards No.
                  128 ("SFAS 128"), "Earnings Per Share",  which established new
                  standards  for  computation  of  earnings  per share. SFAS 128
                  requires  the presentation on the face of the income statement
                  of  "basic"  earnings  per  share  and  "diluted" earnings per
                  share.

                           Basic  earnings per share is computed by dividing the
                  net income  (loss)  available  to common  shareholders  by the
                  weighted  average  number of outstanding  common  shares.  The
                  calculation of diluted  earnings per share is similar to basic
                  earnings per share except the  denominator  includes  dilutive
                  common stock equivalents such as stock options and convertible
                  debentures.   Common  stock  options  and  the  common  shares
                  underlying the convertible debentures are not included for the
                  years  ended March 31, 1999  ("Fiscal  1999"),  March 31, 1998
                  ("Fiscal 1998") as their effect would be anti - dilutitve.

                                       F-9

<PAGE>



         K.       Foreign Currency Translation

                           Assets and liabilities of  subsidiaries  operating in
                  foreign  countries are translated into U.S. dollars using both
                  the  exchange  rate in effect  at the  balance  sheet  date or
                  historical  rate, as  applicable.  Results of  operations  are
                  translated   using  the  average   exchange  rates  prevailing
                  throughout the year. The effects of exchange rate fluctuations
                  on translating  foreign  currency assets and liabilities  into
                  U.S. dollars are included in stockholders' equity (Accumulated
                  other  comprehensive  loss),  while gains and losses resulting
                  from foreign currency transactions are included in operations.

         L.       Stock Based Compensation

                           The  Company  accounts  for  stock   transactions  in
                  accordance  with APB  Opinion  No. 25,  "Accounting  For Stock
                  Issued  To  Employees."   In  accordance   with  Statement  of
                  Financial   Accounting   Standards   No.  123  ("SFAS   123"),
                  "Accounting For Stock-Based Compensation," the Company adopted
                  the pro forma disclosure requirements of SFAS 123.

         M.       Income Taxes

                           The Company follows Statement of Financial Accounting
                  Standards  No.  109  ("SFAS 109"),  "Accounting   for   Income
                  Taxes."   Under  the  asset  and liability method of SFAS 109,
                  deferred tax assets and  liabilities  are  recognized  for the
                  future  tax  consequences  attributable to differences between
                  the  financial  statement  carrying amounts of existing assets
                  and liabilities and their respective tax bases.

         N.       New Accounting Pronouncements

                           The  Company   will  adopt   Statement  of  Financial
                  Accounting Standards No. 131 "Disclosures about Segments of an
                  Enterprise and Related Information"  ("SFAS 131") for the year
                  ended March 31,  1999.  SFAS No. 131 requires the  Company  to
                  report  selected  information  about operating segments in its
                  financial  statements.   It  also  establishes  standards  for
                  related  disclosures  about products and services,  geographic
                  areas,  and  major  customers.  The  application  of  the  new
                  pronouncement is not expected to have a material impact on the
                  Company's disclosures.

                           The   Company   will  adopt  Statement  of  Financial
                  Accounting   Standards   No.  132  ("SFAS  132"),  "Employers'
                  Disclosures about Pensions and Other  Postretirement Benefits"
                  for  the  year  ended  March  31,  1999.  SFAS No. 132 revises
                  employers'  disclosures about pension and other postretirement
                  benefit plans. The application of the new pronouncement is not
                  expected to have a  material impact on the Company's financial
                  statements.



                                      F-10

<PAGE>



3.       LICENSING AGREEMENTS

                  The  Company  acquired  two  licensing  agreements  from Maxon
         Finance and Trade,  Ltd., S.A. ("Maxon") who owns 300,000 shares of the
         Company's  outstanding  shares  of common  stock.  The  agreements,  as
         amended in March of 1994,  are for an exclusive  field of - use license
         to use  the  proprietary  information,  including  the  patent  rights,
         worldwide for the High Temperature Vitrification System. Licensing fees
         aggregating   $5,000,000  are  to  be  paid  under  the  terms  of  the
         agreements.  These fees have been discounted at 7%,  resulting in a net
         capitalized cost of $4,760,000.  These agreements are for an indefinite
         term  or  until  all  of the  proprietary  information  becomes  public
         knowledge  and the  patent  rights  expire.  Amortization  expense  was
         $317,336 for the year ended March 31, 1999 and 1998.  In October  1998,
         the  Company   entered  into  an  agreement   with  Maxon  whereby  the
         outstanding  license payable of  approximately  $1,977,000 plus accrued
         interest of  approximately  $79,000 was converted into 3,333,333 shares
         of common stock.


4.       WRITE - OFF OF NET REALIZABLE ADVANCES FOR HIGH TEMPERATURE
         VITRIFICATION SYSTEMS

                  Due to the bankruptcy of Seiler  Hochtemperatur - Trennanlagen
         AG  ("SHT") on  February  11,  1999 net  realizable  advances  for High
         Temperature  Vitrification  systems of  $4,218,329 as of March 31, 1999
         have been written off.















                                      F-11

<PAGE>



5.       PROPERTY, PLANT AND EQUIPMENT

                  Property,  plant and equipment,  less accumulated depreciation
         consists of the following at March 31, 1999:
<TABLE>
<CAPTION>


                                Life Range                Amount
                                ----------              ----------
<S>                                 <C>                <C>
Land                                                   $   100,000
Equipment                           10                   1,288,069
HTV Equipment                       10                   5,728,289
Buildings                           40                   3,669,968
                                                        ----------
                                                        10,786,326
Less: accumulated depreciation                            (413,053)
                                                       $10,373,273
                                                        ==========
</TABLE>

                  The HTV system is a patented high temperature converter/melter
         which  supplies  the energy  necessary  to provide  final  chemical and
         physical reactions that convert hazardous chemical compounds into inert
         nonhazardous glass ceramics, metal oxides, and salts.


6.       PREPAID EXPENSES AND SUNDRY RECEIVABLES

                  Prepaid  expenses  and sundry  receivables  for the year ended
         March 31,  1999  consists of  $285,000  in  deferred  financing  costs,
         $429,207  receivable for January convertible debentures and $93,175  in
         other prepaid expenses and sundry receivables.


7.       LOANS PAYABLE - STOCKHOLDERS

                  Gerold   Weser,   President  and  Chairman  of  the  Board  of
         Directors, made unsecured non-interest bearing advances to  the Company
         which are payable upon future  mutual  agreement of  the  parties.  The
         advances   have  been  presented  as  a  long  term  liability  in  the
         accompanying balance sheet  based  upon the parties intent to not repay
         the advances currently.  The balance as of March 31, 1999 was $403,887.

                  Werner Heim,  former  chairman of the Board of Directors and a
         stockholder, has made unsecured, non - interest bearing advances to the
         Company which are payable upon future mutual  agreement of the parties.
         The  advances  have  been  presented  as a long term  liability  in the
         accompanying  balance sheet based upon the parties  intent to not repay
         the advances currently. The balance at March 31, 1999 was $135,244.  In
         June 1999, the debt was converted into equity with the Company  issuing
         142,955 restrictive shares of its common stock.

                                      F-12

<PAGE>



8.       LOANS PAYABLE - BANK
<TABLE>
<CAPTION>

          Long-term debt at March 31, 1999 is summarized as follows:



<C>                                                              <C>
     2,100,000 DM ($1,157,100 at March 31, 1999)
     revolving line of credit, monthly interest payable
     at 7.50%. The line is 80% secured by another bank
     and is guaranteed by the Company's chairman.                $ 1,083,722

     7,638,000 DM ($4,208,538 at March 31, 1999) credit
     line on capital expenditures, with interest at 5%.
     Interest is due quarterly;  unpaid principal is
     payable over a ten year period in bi-annual
     installments. The line is 80% secured by another
     bank and is guaranteed by the Company chairman.               3,710,304
                                                                 -----------
                                                                   4,794,026
     Less current portion
                                                                   4,794,026
                                                                 -----------
                                                                 $     -
                                                                 ===========
</TABLE>

                  On  February  27,  1996,  the  Company  obtained a credit line
         commitment from the Dresdner Bank for approximately  2,100,000 DM and a
         long  term  investment  loan in the  amount  of   7,638,000  DM for the
         fabrication,  construction  and  installation  of  a  high  temperature
         separating and melting  facility on land located in Germany acquired by
         the Company from the German State of Saxony.  The commitments  required
         the German  government  to provide the Dresdner Bank with a surety bond
         covering  eighty - percent  of the  commitment,  obtain  the  necessary
         approvals and permits and meet certain financial  covenants relating to
         working capital  requirements and debt to equity ratios.  In connection
         with this  financing  package,  the  Company  received  certain  German
         governmental grants of approximately $4,469,000.  The remaining balance
         of the long term investment loan is not available until certain Company
         obligations are met, principally the construction of a second HTV line.

                  The   Company  is  in default of  certain  bank  covenants and
         accordingly the bank loan is shown as current.



9.       DEFERRED INCOME - GOVERNMENT SUBSIDIES
                  The Company received subsidies from legal government  agencies
         in  Germany  ("Agency"). Under  the  agreement  with  the  agency  the
         Company is  obligated to secure capital financing  and  must employ a
         certain  number of  employees over a ten year  period.  The  amount of
         money received has been  deferred and will  be  recognized as income as
         the Company fulfills  its  obligation under  this  agreement.


                                      F-13

<PAGE>


10.      CONVERTIBLE DEBENTURES

                  In November 1997 the Company received $2,457,000 from the sale
         of 7%  cumulative  convertible  debentures  pursuant to a  registration
         under  Regulation D. Fifty percent of the  debentures  are  convertible
         into shares of common stock at the option of the debenture holder
         at the lesser of (1) 120% of the 5 day  average  closing  bid price for
         the 5 trading days  immediately  preceding the closing date, or (2) 75%
         of  the 5 day  average  closing  bid  price  for  the  5  trading  days
         immediately preceding the applicable conversion date for any conversion
         dates that are after the earlier of the registration  effective date or
         120 days  following  the closing  date.  The  purchaser may convert the
         debentures  into common stock at the lesser of (1) 120% of the five day
         average  bid price for the 5 trading  days  immediately  preceding  the
         closing date or (2) 65% of the 5 day average  closing bid price for the
         5 trading days immediately preceding the applicable conversion date for
         any  conversion  dates after 120 days  following the closing date.  The
         remaining 50% of the  debentures  may be converted at 75% or 65% of the
         five day average closing bid price within or without 120 days following
         the closing date respectively. Interest on the debentures is payable in
         cash or common  stock upon  conversion,  at the option of the  Company.
         Interest  of  $73,600  has  accrued  since  the  convertible  debenture
         issuance.

                  In June 1998, the Company  received  $220,000 from the sale of
         7% cumulative  convertible  debentures pursuant to a registration under
         Regulation D.  Interest on the  debentures is payable in cash or common
         stock upon  conversion,  at the option of the  Company.  The holder may
         convert the  debentures  into common stock at the lesser of (1) 120% of
         the 5  day  average  bid  price  for  the 5  trading  days  immediately
         preceding the closing date or (2) 65% of the 5 day average  closing bid
         price for the 5  trading  days  immediately  preceding  the  applicable
         conversion date.

                  In July 1998, the Company  received  $230,000 from the sale of
         7% cumulative debentures pursuant to a registration under Regulation D.
         Interest  on the  debentures  is payable  in cash or common  stock upon
         conversion,  at the option of the  Company.  The holder may convert the
         debentures  into  common  stock at the  lesser  of (1) 65% of the 5 day
         average  bid price for the 5 trading  days  immediately  preceding  the
         closing date or (2) 120% of the 5 day average closing bid price for the
         5 trading days immediately preceding the applicable conversion date.

                  In November 1998, the company received  $200,000 from the sale
         of 7% cumulative convertible debentures.  Interest on the debentures is
         payable in cash or common stock upon  conversion,  at the option of the
         company. The holder may convert the debentures into common stock at the
         lesser  of (1) 120% of the 5 day  average  bid  price for the 5 trading
         days  immediately  preceding  the closing  date or (2) 65% of the 5 day
         average closing bid price for the 5 trading days immediately  preceding
         the applicable  conversion  date. In july of 1999 these debentures were
         extinguished for 417,811 restrictive shares.

                  On December 14, 1998, the company  received  $865,000 from the
         sale  of  7%  cumulative  convertible   debentures.   Interest  on  the
         debentures is payable in cash or common stock upon  conversion,  at the
         option of the  company.  The holder may  convert  the  debentures  into
         common  stock at the lesser of (1) 120% of the 5 day  average bid price
         for the 5 trading days  immediately  preceding  the closing date or (2)
         65% of the 5 day  average  closing  bid price  for the 5  trading  days
         immediately preceding the applicable conversion date.


                                      F-14

<PAGE>



                  In  January  of  1999  the  Company  entered  into a  rollover
         transaction  with the  debenture  holders of November 1997 and June and
         July 1998, pursuant to which (after providing for incentives, penalties
         of $852,290 and interest of $283,452) the  outstanding  debentures were
         converted into new  debentures  for gross  proceeds of  $6,055,280,  7%
         convertible  debentures,  convertible into common stock of the Company.
         The Company received $1,158,000 cash proceeds from the offering.  These
         debentures are collateralized by the Company's land,  inventory,  plant
         and equipment in Freiburg,  Germany and guaranteed by the 50% holder of
         STSB.  Penalties  are  included  in  other  financing  expenses  in the
         Statement of Operations

                  On January 15, 1999 the Company received $20,000 from the sale
         of  7% cumulative convertible debentures. Interest on the debentures is
         payable in cash or common stock upon  conversion,  at the option of the
         Company.  The holder may convert the  debentures  into common  stock at
         the lesser of (1) 60% of the 5  day average bid price for the 5 trading
         days  immediately  preceding  the closing date or (2) 125% of the 5 day
         average closing bid price for the 5 trading days immediately  preceding
         the applicable  conversion  date.  Pursuant  to an  agreement  in March
         1999 the holder  converted  the  debentures  into 32,787  shares of the
         Company's  common stock.

                  On January 12,  1999,  the Company  received  $20,000 from the
         sale  of  7%  cumulative  convertible   debentures.   Interest  on  the
         debentures is payable in cash or common stock upon  conversion,  at the
         option of the  Company.  The holder may  convert  the  debentures  into
         common  stock at the lesser of (1) 60% of the 5 day  average  bid price
         for the 5 trading days  immediately  preceding  the closing date or (2)
         125% of the 5 day  average  closing  bid price  for the 5 trading  days
         immediately preceding the applicable conversion date.

                  On January 15,  1999,  the Company  received  $20,000 from the
         sale  of  7%  cumulative  convertible   debentures.   Interest  on  the
         debentures is payable in cash or common stock upon  conversion,  at the
         option of the  Company.  The holder may  convert  the  debentures  into
         common  stock at the lesser of (1) 60% of the 5 day  average  bid price
         for the 5 trading days  immediately  preceding  the closing date or (2)
         125% of the 5 day  average  closing  bid price  for the 5 trading  days
         immediately  preceding the applicable  conversion date.  Pursuant to an
         agreement in March 1999 the holder  exercised its conversion  rights in
         its  entirety  in  exchange  for 32,787  restrictive  shares of Company
         common stock.

                  On January 15,  1999,  the Company  received  $10,000 from the
         sale  of  7%  cumulative  convertible   debentures.   Interest  on  the
         debentures is payable in cash or common stock upon  conversion,  at the
         option of the  Company.  The holder may  convert  the  debentures  into
         common  stock at the lesser of (1) 60% of the 5 day  average  bid price
         for the 5 trading days  immediately  preceding  the closing date or (2)
         125% of the 5 day  average  closing  bid price  for the 5 trading  days
         immediately preceding the applicable conversion date.

                                       F-15
<PAGE>



                  On February 12, 1999, the Company  received  $175,000 from the
         sale  of  7%  cumulative  convertible   debentures.   Interest  on  the
         debentures is payable in cash or common stock upon  conversion,  at the
         option of the  Company.  The holder may  convert  the  debentures  into
         common  stock at the lesser of (1) 60% of the 5 day  average  bid price
         for the 5 trading days  immediately  preceding  the closing date or (2)
         125% of the 5 day  average  closing  bid price  for the 5 trading  days
         immediately  preceding the applicable  conversion date.  Pursuant to an
         agreement in March 1999 the holder  exercised its conversion  rights in
         its  entirety in exchange  for  286,885  restrictive  shares of Company
         common stock.

                  On February 16, 1999,  the Company  received  $10,000 from the
         sale  of  7%  cumulative  convertible   debentures.   Interest  on  the
         debentures is payable in cash or common stock upon  conversion,  at the
         option of the  Company.  The holder may  convert  the  debentures  into
         common  stock at the lesser of (1) 60% of the 5 day  average  bid price
         for the 5 trading days  immediately  preceding  the closing date or (2)
         125% of the 5 day  average  closing  bid price  for the 5 trading  days
         immediately  preceding the applicable  conversion date.  Pursuant to an
         agreement in March 1999 the holder  exercised its conversion  rights in
         its  entirety  in  exchange  for 16,393  restrictive  shares of Company
         common stock.

                  For purposes of the  accompanying  financial  statements,  the
         convertible debentures are recorded as additional paid in capital since
         the debenture agreement does not provide for repayment of the debenture
         in cash and requires a mandatory  conversion into common stock no later
         than 24 or 36 months after issuance.


11.      CONVERTIBLE NOTES PAYABLE

                  In July 1998 the Company  received  gross proceeds of $250,000
         and  $150,000,  pursuant  to  the  issuance  of  unsecured  convertible
         promissory  notes  bearing  interest  at 8% per  annum.  Pursuant  to a
         February 18, 1999  agreement  the Company  issued  294,444  restrictive
         shares, on May 21, 1999, to the holder of the $250,000 note in exchange
         for such outstanding indebtedness.  Pursuant to an additional agreement
         in February 1999, the Company issued  500,000  restrictive  shares,  in
         February   1999,  in  exchange  for  the  $150,000   convertible   note
         outstanding.



                                      F-16

<PAGE>




12.      NOTES PAYABLE

                  On October  29,  1998 an  unrelated  party  loaned the Company
         $500,000 which was used to pay down part of the obligation due Dresdner
         Bank. Debt service terms are currently being negotiated.


13.      INCOME TAXES

                  Deferred income tax assets as of March 31, 1999 of $16,000,000
         as a  result  of net  operating  losses,  have  been  fully  offset  by
         valuation  allowances.  The valuation  allowances have been established
         equal to the full amounts of the deferred tax assets, as the Company is
         not assured that it is more likely than not that these benefits will be
         realized.

                  A reconciliation between the statutory United States corporate
         income  tax rate  (34%) and the  effective  income  tax rates  based on
         continuing operations is as follows:

<TABLE>
<CAPTION>

                                                  Year Ended March 31,
                                               ---------------------------
                                                  1999             1998
                                               -----------    ------------
<S>                                            <C>             <C>
Net loss                                       $ 8,570,617     $10,136,693
                                               ===========     ===========
Statutory federal income tax (benefit)         $(2,914,010)    $(3,446,500)
Operating losses with no current tax benefits      837,930       1,703,300
Effect of foreign operations                     2,076,080       1,743,200
                                               -----------     -----------
Provision for income taxes                     $    -          $    -
                                               ===========     ===========

</TABLE>

14.      STOCK OPTIONS

                  The Board of  Directors  has  adopted  Non -  Statutory  Stock
         Option Plans and reserved  4,500,000  shares,  for issuance to eligible
         full and part - time employees, directors and consultants.  Options are
         nontransferable  and are exercisable during a term of not more than ten
         (10)  years from the grant  date.  The  options  are  issuable  in such
         amounts and at such  prices as  determined  by the Board of  Directors,
         except  that  each  option  price of each  grant  will not be less than
         eighty-five percent of the fair market value of such shares on the date
         the options are  granted.  As of March 31, 1999, 500,000 options   have
         been granted under the plan.



                                      F-17

<PAGE>




15.      STOCK SPLIT

                  On  September  24,  1998,  pursuant  to a Special  Meeting  of
         Shareholders, the Board authorized a 1 for 6 reverse stock split of the
         Company's  $.0001  par  value  common  stock.  All  references  in  the
         accompanying  financial  statements  to the number of common shares and
         all computations of per share amounts have been restated to reflect the
         reverse stock split.

16.      COMMITMENTS AND CONTINGENCIES

                  The Company  entered into written  employment  agreements with
         Werner Heim (former  President),  Gerold Weser (President) Alan B.Sarko
         (Vice  President),  and  Niklaus  Seiler  (Former Vice President).  The
         agreements  commenced  January 1, 1996, expire five year thereafter and
         provide for base  salaries  of  $150,000  per  year as well as  certain
         additional bonuses based upon the Company reaching certain levels which
         have  not  yet  been attained.  Mr. Heim, Mr. Sarko, Mr. Weser, and Mr.
         Seiler  have  also  been  granted  options  to  purchase up to 300,000;
         300,000;  200,000;  and 300,000  shares,  respectively of the Company's
         Non  Statutory  Stock  Option Plans.  In June 1998 Werner Heim resigned
         from  the  Company and in June,  1999 Niklaus Seiler was terminated for
         cause.   The  commitment  to  both  individuals  in  regards  to  their
         employment  agreements  ceased  on the date of separation from service.
         With  the  exception  of those options previously granted to Mr. Seiler
         options indicated herein remain outstanding.

                  On  July 1,  1998,  the  Company  entered  into an  employment
         agreement with the president of SABD. The agreement provides for a base
         salary of  approximately  $70,000 as well as a 5% bonus.  The agreement
         automatically renews for one year increments.

                  The Company  leases various office space in the United States,
         Switzerland and Germany. The total charges to  operations  for the year
         ended  March  31,  1999  was  $112,081.  Future  minimum  annual  lease
         payments,  based on the exchange rate in effect on March 31, 1999 under
         the lease agreement are as follows:
<TABLE>
<CAPTION>

         Year ending March 31,
         <S>                        <C>           <C>
                                    2000          $ 143,531
                                    2001            143,531
                                    2002            143,531
                                    2003             79,427
                                    2004             79,427
                                                   --------
                                                  $ 589,447
                                                   ========

</TABLE>




                                      F-18

<PAGE>



                  On March 30, 1998, STSB entered  into  an  agreement with  AWU
         Abfallwirtschaft  und  Recycling  Berlin GmbH  ("AWU").  The  agreement
         stipulates  that STSB must  purchase a  chemical-physical  liquid waste
         treatment  plant  located  in  Berlin,  Germany  from  AWU  along  with
         laboratory  equipment  and  instruments,  vehicles  and  furniture  and
         fixtures for a price of 1.2 million German Marks ($648,600 at March 31,
         1998),  and  lease  and  operate  the  site  for a  period  of 20 years
         commencing  July 1, 1988.  In addition STSB must (i) invest 7.5 million
         German Marks  ($4,167,000 at June 30,1998) by December 31, 1999 for the
         construction of this new  vitrification  plant with a penalty of 80% of
         the  shortfall  between the required  investment  and what was actually
         spent  and (ii)  commit 1 million  German  Marks  for  modernizing  and
         enlarging  of the  existing  leased  building  with  such  payment  for
         modernization  due July 15, 1998.  Such payment was not made and is now
         accruing interest at the rate of 8% per year.


                  AWU must  provide a financing  commitment  from a large German
         Bank by September 30, 1998.  Such commitment has not yet been provided.
         STSB has the right to terminate this agreement if it does  not  receive
         the  necessary  permits  required   for   the   construction   of   the
         vitrification  plant or the modernization  of the existing liquid waste
         treatment plant.  On  July  1,  1998, STSB,  SABD,  and AWU executed an
         agreement  transferring  the  rights and obligations under the purchase
         agreement and  rental  lease  agreement from STSB to SABD.  Accordingly
         the plant and equipment  valued at  1,200,000  German Marks  ($718,560)
         was transferred as well.


17.      LEGAL MATTERS

                  In  March   1998,   the   Registrant   was  sued  by  Monoglas
         Anlagenvertriebs,  GmbH for  1,000,000  German  Marks  ($550,000)  plus
         interest  since October 21, 1994 for payment of a consulting  contract.
         This action is considered to be in its early stage of  arbitration  but
         it is the intention of the Company's  management to contest this matter
         vigorously and management believes that it has meritorious  defenses to
         this claim.

                  In November  1998,  SHT sued APC for  4,327,218  Swiss  Francs
         ($2,984,000)  in respect of charges and expenses which SHT had invoiced
         the Company in March 1998.  Due to the  bankruptcy  of SHT (see Note 3)
         the  Administrator  of SHT's  estate  can  prosecute  this  claim.  The
         Company's  management  intends to contest  this matter  vigorously  and
         management believes that it has meritorious defenses to this claim.

                  In  December  1998,  APC  was  sued  by  Dresdner   Management
         Consulting, GmbH ("Dresdner") for 320,732 German Marks plus interest at
         5% since December 17, 1997 ($190,608) for unpaid  consulting costs. The
         Court  found for  Dresdner  on April 22,  1999 and such amount has been
         accrued.



                                      F-19

<PAGE>



                  The World Wildlife  Foundation filed a complaint against Pyrec
         AG in Switzerland on March 12,1998 regarding  environmental  protection
         aspects of a project that Pyrec is involved in concerning the treatment
         of the remains of shredded scrapped automobiles.  The Company is in the
         process of seeking an out of court settlement.

                  H.  Jurgen  Schlichting  sued  APC for  132,307  Swiss  Francs
         ($96,000)  plus  interest  at 5%  since  July  1,  1998  for  financial
         consulting services.  On April 12, 1999 APC settled this lawsuit with a
         payment of $55,000. Such amount was accrued at March 31, 1999.

                  In February 1999, the Company was sued by Lalive Gut & Partner
         for  308,405  Swiss  Francs plus  interest at 5% for unpaid  consulting
         costs.  Subsequent  to year  end the  Company  reached  an out of court
         settlement for approximately  $83,000 with such amount being accrued at
         year end.


18.      BUSINESS SEGMENTS

                  The Company has adopted  disclosure  requirements of SFAS 131,
         Management  has  determined  that  segment  information  by  geographic
         location is appropriate since the Company is developing HTV  systems in
         various geographic regions.

                  The Company derives all of its revenues from its  subsidiaries
         located  in the  United  States,  Switzerland  and  Germany.  Sales  by
         geographic  areas for the years  ended  March 31, 1999 and 1998 were as
         follows:

<TABLE>
<CAPTION>

                                            1999              1998
                                          --------          -------
         <S>                             <C>              <C>
         United States                  $   94,350        $    -
         Switzerland                          -                -
         Germany                         1,194,030             -
                                          --------          -------
                                        $1,288,380        $    -
                                          ========          =======

</TABLE>










                                      F-20

<PAGE>



                  The  following  summarizes  identifiable  assets by geographic
          area:

<TABLE>
<CAPTION>

                                             1999              1998
                                          ----------        ----------
         <S>                             <C>               <C>
         United States                   $ 4,518,005       $ 3,628,045
         Switzerland                         611,018         3,836,803
         Germany                           9,391,209         9,114,212
                                          ----------        ----------
                                         $14,520,232       $16,579,060
                                          ==========        ==========

</TABLE>

                  The following summarizes operating losses before provision for
         income tax:

<TABLE>
<CAPTION>

                                             1999              1998
                                          ----------        ----------
<S>                                      <C>               <C>
         United States                   $ 2,464,498       $ 3,413,311
         Switzerland                       5,144,251         6,052,550
         Germany                             961,868           670,832
                                          ----------        ----------
                                         $ 8,570,617       $10,136,693
                                          ==========        ==========
</TABLE>

19.      RESTATEMENT

                  The  accompanying  financial  statements have been restated to
         properly   record   the  accounting  treatment  of  certain  beneficial
         conversion features and debt issuance costs of  convertible  debentures
         issued during the year ended March 31, 1999.

         Stockholders' equity has been restated to reflect the following:

<TABLE>
<CAPTION>

                                                            Additional
                                                             Paid-in     Accumulated
                                                             Capital       Deficit
                                                            ----------   ------------
         <S>                                               <C>           <C>
         As originally reported, March 31, 1998            $31,007,211   $(23,042,876)
         Beneficial conversion feature                       1,615,386     (1,615,686)
         As restated, March 31, 1998                       $32,622,597   $(24,658,262)
                                                            ==========    ===========

</TABLE>
                                      F-21

<PAGE>



20.      PROJECT FINANCING PROPOSAL

                  In January 1999 the Company entered into a financing agreement
         with Summa Capital Corporation ("Summa"), a British West Indies company
         specializing in Asset Management and Project  Financing,  whereby Summa
         agreed to provide  (through  others) up to  $75,000,000 of financing to
         Seiler  for  the  construction  of  processing  plants,   research  and
         development and general business expansion;  either through issuance of
         debentures or utilization of note purchase  agreements (or similar debt
         documents)  with  accredited   investors.   Assuming  specific  project
         financing the Company will be required to deliver a first lien position
         for  financing  participants  so as to  secure  assets  for a  specific
         financed project.

                  Agreed to financing terms include:  (1) a financing term of 12
         years with  interest  at the rate of 7.875%  per annum,  with  interest
         limited  to and  payable  only on  those  funds  drawn - down  for each
         specific projects and with Seiler's right to defer interest payment for
         the first 24 months  subsequent  to each draw - down  date,  (2) Seiler
         being  required  to  obtain   contractually   binding   agreements  for
         processing  waste  and the  sale of the  recycled  products  for 65% of
         vitrification  system capacity with the understanding  that contractual
         agreements  ( for the  first 2 U.S.  projects  and the  first 2 foreign
         country  projects) shall be in place within six months of the time that
         the identified vitrification system is in commercial operation and with
         the  further   understanding   that  contractual   agreements  for  all
         subsequent  projects shall be in place prior to project  funding draw -
         down and (3) the Company being required,  prior to draw - down, to have
         all necessary  environmental  permits and  determinations in place with
         all other permits to be obtained in accordance  with the Company acting
         as project manager for each designated project.

                  In  accordance  with the terms of the  agreement,  Summa is to
         receive a 15% equity  interest in the Company  (assuming its compliance
         with each of its warranties and representations).  Additionally,  Summa
         has already  received  from the Company a $65,000  mobilization  fee to
         cover all its direct costs and attendant  fees incurred with respect to
         the  transaction  described.  The  Company  has  also  paid  the sum of
         $200,000  to  Summa's  designated  counsel  as and for  legal  fees and
         expenses   directly   related   to  this   transaction   and  with  the
         understanding  that (a) any further legal fees shall be the  obligation
         of Summa and (b) if for any reason other than the Company's  failure to
         perform, such $200,000 is to be fully refunded to the Company.

                  Notwithstanding  all or any  portion of the above and the fact
         that the  described  transactions  are being  actively  pursued  by all
         parties thereto,  no funds have been received by the Company as of July
         15, 1999 nor have any final documents  intended to evidence transfer of
         funds been executed so as to make fund transfer and delivery eminent.





                                      F-22

<PAGE>


21.      SUBSEQUENT EVENTS

                  On April 26, 1999 the Company  received  $75,000 from the sale
         of 7% cumulative convertible debentures.  Interest on the debentures is
         payable in cash or common stock upon  conversion,  at the option of the
         Company. The holder may convert the debentures into common stock at 70%
         of the 5 day  average  bid  price for the 5  trading  days  immediately
         preceding the closing date. These debentures are  collateralized by the
         Company's   plant  in  Freiburg,   Germany  and  requires  a  mandatory
         conversion into common stock no later than 24 months after issuance.






























                                      F-23

<PAGE>



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

         There were no  disagreements  with the Company and its former auditors,
Schneider Downs & Company,  Inc. ("Schneider Downs") on any matter of accounting
principals  or  practices,  financial  statement  disclosures  or the  scope  of
accounting  procedures other than as heretofore  indicated in the Company's Form
8-K and 8-K/A with date of report of February  12,  1999,  the full  contents of
which are herewith incorporated by reference. Additionally, subsequent to filing
of 8-K/A  the  Company  received  a request  for  further  information  from the
Assistant Chief Accountant  dated March 26, 1999 which the Company  responded to
by letter dated May 5, 1999. Due to the disagreement contained in such documents
and the ongoing demands by Schneider Downs for what the Company considered to be
exorbitant and unjustifiable fees and due to the Company's overall lack of faith
in its former auditors, management of the Company determined that it would be in
the  Company's  best  interest to have its current  auditors  not only audit its
finanical  statements for the fiscal year ended March 31, 1999 but to also audit
for the prior fiscal year ended March 31, 1998. Accordingly, the audited reports
for both fiscal  years ended March 31, 1998 and 1999 as  contained  in this Form
10-KSB have been audited by Feldman Sherb  Horowitz & Co.,  P.C.,  the Company's
current auditors.

































                                      -25-

<PAGE>



                                    PART III

ITEM 9.           DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
                  PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         (a) The  Directors  and  Executive Officers of the Company, as of March
31, 1999, were as follows:

Name                     Position(s) Held                               Age

Dr. Gerold Weser         Chairman of the Board (since June, 1998),       53
                         President (since November, 1997),
                         Vice President, European Operations
                         (through November, 1997),
                         President; Seiler TSB and a Director

Werner Heim (1)          Chairman of the Board (through June 1998),      66
                         President (through November 1997) and
                         President; APC AG


Alan B. Sarko            Vice President; North American Operations       51
                         Chief Financial Officer
                         Secretary, Treasurer and a Director

Niklaus Seiler (2)       Former Vice President; System Research          61
                         Development
                         President; Seiler HT AG and a Director

Eckhart Busch            Director (since November 1997)                  58

Morris D. Jaffe, Jr. (3) Director (since May 1998)                       48

(1)      Resigned from all positions held effective June 1998.
(2)      Resigned/terminated from all positions held effective June 1999.
(3)      Summary  biographical  information  regarding  Mr. Jaffe has been taken
         verbatim from such information as previously  appeared in the Company's
         Form  10-K  for  fiscal  year  ended  March 31, 1998 due to Mr. Jaffe's
         failure  to  respond  to  written  requests  for  updated  biographical
         information.  It is not anticipated that Mr. Jaffe shall be proposed as
         a  nominee  to  the  Company's  Board  of  Directors at its next Annual
         Meeting  of Stockholders.

         Directors  are  elected  to serve  until  the next  annual  meeting  of
         stockholders  and until  their  successors  have been  elected and have
         qualified.  Officers  are  appointed  to serve until the meeting of the
         Board of Directors  following the next annual  meeting of  shareholders
         and until their successors have been elected and have qualified.

         Dr. Gerold  Weser  served  as  Vice  President  of  European Operations
between  January  1996  and  November 1997, having joined the Company in January
1995.  He  became  a  Director of the Company in May 1997.  In November 1997 Dr.
Weser was elected President and CEO and in June 1998 was elected Chairman of the
Board.  Dr. Weser  serves  as  President of STSB GmbH.  From 1993 until he began


                                      -26-

<PAGE>



his  association  with  Seiler,  Dr.  Weser  was  Chief  Executive  Officer  and
Administrator  of  Dr. Weser & Partner.  From  1990 to 1993, Dr. Weser served as
Managing  Director  of Centralsug, Hamburg/Stockholm, Sweden.  Dr. Weser is also
President of SABD GmbH.

         Dr.  Weser  received  Vordiploma  (B.A.)  in Chemistry and Physics from
Technical  University  of  Karlsruhe  in  1969. Subsequently, Dr. Weser received
a Diploma in Chemistry  from the University of Oxford, England, and a Diploma in
Physics  from  the University of Marburg, Germany.  In 1978, he received his Dr.
Rer. Natl. (Ph.D.) from  the  Institute  for  Physical  Chemistry, University of
Marburg.  From  1978  to 1990, Dr. Weser worked for various companies engaged in
environmental processing, handling, recycling and management.  Dr. Weser devotes
his full time and best efforts to the Company's business activities.

         Werner Heim - by virtue of the fact that Mr. Heim has resigned from all
positions held by him effective June 1998, summary biographical  information has
been excluded.  To obtain such summary  biographical  information,  reference is
made to the Company's Form 10-K for fiscal year ended March 31, 1998.

         Alan B. Sarko has served as Vice President of North American Operations
since March 1995.  That same year, he also became a Director of the Company.  In
May  1996,  Mr. Sarko  was  appointed  Secretary, Treasurer  and Chief Financial
Officer of Seiler.  Mr. Sarko joined the Company in February 1994 as Director of
Marketing.  Before joining Seiler, Mr. Sarko worked  for 10 years as Director of
Marketing and Environmental Compliance for Inorganic Recycling Corporation. From
1973  until  1984,  Mr. Sarko  was  Chief Executive Officer and Administrator of
Sarko Equipment, Inc., a Midwestern industrial demolition contractor.

         Mr.  Sarko  received a Bachelor  of Arts  Degree  from  Michigan  State
University in 1969 and his Juris  Doctorate from Detroit College of Law in 1972.
He has also  received  Certificates  of  Completion  for various  post  graduate
courses in the field of hazardous waste  management.  Mr. Sarko devotes his full
time and best efforts to the Company's business activities.

         Niklaus   Seiler  -  by  virtue  of  the  fact  that  Mr.   Seiler  has
resigned/terminated  from all positions held by him effective June 1999, summary
biographical  information has been excluded. To obtain such summary biographical
information,  reference is made to the Company's Form 10-K for fiscal year ended
March 31, 1998.

         Eckart  Busch  is  a  Swiss   National  with  more  than  30  years  of
international financial,  business and engineering experience.  He has worked on
many government projects and joint ventures throughout the  world.  Three  years
ago, Mr. Busch founded Busch Consultants, a global international  environmental,
engineering and financial consulting company.  Before launching his own company,
Mr. Busch was Project Development Manager for the Middle East for ALCATEL's  SEL
Standard Electric Lorenz Company for six years.  Prior to that, Mr. Busch served
for more than twelve years the Group of Glencore, an international Swiss company
that traded in oil, aluminum and metals.

         Morris D. Jaffe, Jr. is currently Chairman of the Board of Directors of
Jaffe  Group, Inc. a  closely held Texas corporation which is the parent company
of the following subsidiaries:  Comtran International, Inc., Lake LBJ Investment


                                      -27-

<PAGE>



Corporation,  Jaffe  Energy,  Inc.,  Jaffe Realty, Inc. and Jaffe International,
Inc. Since 1995, Mr. Jaffe has been on the Board of Directors of Sino-Swearingen
Aircraft Company, a Taiwan/U.S. joint venture company.  He is a Board  Member of
Seven  Q  Seven,  Inc.,  a  Texas  corporation, and from 1988 to 1990, Mr. Jaffe
served  on the Board of Directors of Apache Corporation.  See also footnote 3 to
 Item 9 (a) chart.

         (b) Significant Employees.

                  (i)  Those  persons  indicated   directly  below  are  neither
officers or directors of  the Company but have made and are expected to continue
to  make  significant  contributions  to  its  business operations,  principally
through their respective activities at the Company's 80% owned  subsidiary  SABD
GmbH  located  in  Berlin,  Germany  where  it currently operates a liquid waste
processing facility.  See also Part I, Item 1 "Description of Business - Berlin,
Germany Project".

         Dr. Anke Schwan (45 years of age) has been Managing  Director with SABD
GmbH Berlin since July of 1998.  Prior thereto and from 1997 until Dr.  Schwan's
association  with the Company Dr. Schwan served (a) from  1997-1998 as Executive
Vice President with Berlin subsidiaries of  Abfallwirtschaft  und Recycling GmbH
engaged in waste  disposal  and  recycling  activities,  (b) from  1995-1997  as
Managing  Director with  "Druckplattenwerk  Berlin GmbH", an ALBA AG subsidiary;
ALBA AG being one of the largest corporations in Germany engaged in the chemical
and waste disposal  industry,  and (c) from 1991-1995 as Managing  Director with
"AWETA  Berlin  GmbH",  which  firm  was  similarly  engaged  in  the  field  of
physical-chemical  treatment  of waste.  By  virtue  of the  above  and  related
employment  activities  Dr.  Schwan has had in excess of 13 years  experience in
activities  directly  related to the Company's  current  business  affairs.  Dr.
Schwan  received her  doctorate  degree from Dresdner  University  in 1980,  was
graduated  with a degree in Chemistry  from TU Dresden  University  in 1977,  is
Licensed as Assistant Professor at Humboldt  University,  Berlin,  Germany,  has
served on the faculty at TU Dresden  University  and since 1991 has  lectured at
various academies in Berlin, Germany on topics of waste disposal management.

         Juergen Rehberg (46 years of age). Prior to Mr.  Rehberg's  association
with the Company in 1999 he was engaged as Sales  Department Head for a group of
companies  engaged  in the waste  managing  field as well as being  involved  in
negotiations relating to project  acquisitions.  From (a) 1995-1997 he served as
Managing Director with MBO GmbH and (b) 1989-1995 he served as Managing Director
with  Eckelmann  AG - both of which  firms  were  engaged  in the field of waste
management  and soil  redemption.  Mr Rehberg  received  his  college  degree at
Kirchenpauer-Gymnasium  Hamberg in 1973 and his graduate degree in Mineralogy at
Hamburg University in 1978.

                  (ii) The  additional  persons  indicated  directly  below  are
similarly  neither  officers  or  directors of the Company but have made and are
expected  to  continue  to  make  significant  contributions  to  its   business
operations  in  Freiberg, German with respect to Dr. Ing. Rainer Lohrmann and in
the  United  States  with respect to Robert F. Kroeger.  See also Part I, Item 1



                                      -28-

<PAGE>



"Description of Business".

         Dr.   Ing.   Rainer    Lohrmann,    Operations    Manager   at   Seiler
Trenn-Schmelzanlagen  Betriebs GmbH, Freiberg, Germany, received his engineering
degree from the Technical University of Freiberg, Saxonia, Germany. Dr. Lohrmann
specialized in thermal technology  processing and flue-gas cleaning systems.  In
1967,  he worked as a scientist in a company that  designed and built  machinery
and equipment for high temperature aggregates. In 1970, Dr. Lohrmann worked as a
scientist  and  area  manager  at  a  metallurgical  research  center  where  he
specialized in emission  research,  starting up thermal plants,  research of old
waste,  waste treatment,  environmental  consulting and improving  environmental
protection. In 1994 he was a manager of a waste management center that developed
storage  facilities for special wastes,  the treatment of industrial  wastewater
and the  recycling of synthetic  material.  In 1997 he joined  Seiler  Freiberg,
where he currently serves as the managing director.

         Robert  F.  Kroeger,   currently  head  of  U.S.   Project   Management
Operations,  joined the Company in October  1996 as an  independent  engineering
consultant and became a full time Company  employee in January 1998. Mr. Kroeger
brings  37  years  of  management,   engineering,  project  management,  project
development/implementation,  and quality  assurance  experience  to the Company,
including 20 years in the nuclear power field. He received a Bachelor of Science
degree in Electrical  Engineering from Purdue  University and has extensive post
graduate education and training in numerous areas.

         (c) Section 16(a) Beneficial  Ownership Reporting  Compliance.

         Section  16(a)  of  the  Exchange Act requires the Company's directors,
officers  and  persons  who  own  more  than  10%  of  a registered class of the
Company's equity  securities, to file initial  reports of ownership  and reports
of  changes  in  ownership  with  the  Securities and Exchange  Commission  (the
"Commission").  Such  persons  are  required by the  Commission  to furnish  the
Company  with copies of all Section 16(a)  forms they file.  Based solely on its
review  of  the  copies  of  Forms  3,  4 and 5 received  by it, if any,  during
the  fiscal  year  ended  March  31, 1998 the Company  believes  that,  with the
exception of those persons and/or firms indicated below, all directors, officers
and 10% stockholders complied with such filing requirements.

         According to the Company's records, the following filings appear not to
have been timely made: an initial  statement of  beneficial  ownership on Form 3
and   statements  of  changes  in  beneficial   ownership  on  Form  5  covering
transactions  (such  Form 5  representing  a  delinquent  Form 4) were not filed
timely  by Maxon  Finance & Trade  Ltd.  SA  ("Maxon");  Maxon  having  been the
recipient during the most recent fiscal year of 3,333,333  restrictive shares of
Company  common  stock in  accordance  with  October 12, 1998  agreement  and in
exchange for converting  outstanding  indebtedness  owned to it and amounting to
$2,056,000.






                                      -29-

<PAGE>



ITEM 10.          EXECUTIVE COMPENSATION

         Executive Compensation

         The  following  table  sets  forth  information  concerning  the  Chief
Executive  Officer  of  the  Company  and the Company's executive officers whose
total annual salary and bonus exceeded  $100,000 for the fiscal year ended March
31, 1999 and 1998.
<TABLE>
<CAPTION>

                                                                  Long Term Compensation
                                         Annual Compensation              Awards
                                                                   Securities
Name and Principal                                  Other Annual   Underlying    All other
Position                        Year(1)  Salary     Compensation    Options     Compensation (4)
---------------------------     -------  --------   -------------  -----------  ----------------
<S>                             <C>     <C>                <C>         <C>           <C>
Dr. Gerold Weser, Chairman      1999    $173,644           -           -             -
(since June 1998), President    1998     165,375           -           -             -

Werner Heim, Chairman (2)       1999      43,411           -           -             -
(through June 1998),            1998     165,375           -           -             -
President (through
November 1997)

Alan B. Sarko, Vice
President, CFO,                 1999     173,644           -           -             -
Secretary, Treasurer            1998     165,375           -           -            7,500

Niklaus Seiler, Former (3)      1999     173,644           -           -             -
President                       1998     165,375           -           -             -

</TABLE>

(1) For the Fiscal year ended March 31, of the year listed below.
(2) Resigned from all positions held effective June 1998.
(3) Resigned/terminated from all positions held effective June 1999.
(4) Pension benefits.


         Option Exercises & Values

         None of the persons identified in the Summary Compensation  Table above
were granted any stock options during fiscal years ended March 31, 1999 and 1998
nor have any of the persons identified in the table  exercised any stock options
during  the  fiscal  years  ended  March  31, 1999 and 1998 that were granted in
previous fiscal years.

                                      -30-

<PAGE>



ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

         (a) Security  Ownership of Certain  Beneficial  Owners.  The  following
persons are known to the Company to be the beneficial  owners of more than 5% of
the 7,565,362 shares of the Company's  outstanding $.0001 par value common stock
as of June 30,  1999.  To the best of the  Company's  knowledge  each person has
beneficial ownership of the shares and has sole voting power and sole investment
power with respect to the number of shares beneficially owned.
<TABLE>
<CAPTION>

Name and Address of                 Amount and Nature of            Percent
   Beneficial Owner *               Beneficial Ownership            Of Class
<S>                                         <C>                        <C>

Wilfried Groote                             416,666                    5.51%
28 rue Emile de Loth
98000 Monaco
Monte Carlo

Maxon Finance & Trade Ltd. SA             1,083,000                   14.32%
c/o Buetler Consulting SA
Chemin G. Ritter 3
CH-1701 Fribourg, Switzerland

Peter Ruegg                                 500,000                    6.61%
Spitzackerstrasse 7
CH-8916 Jonen
Switzerland

Dominion Capital Fund, Ltd.                 123,952 (1)                1.63%
Bahama Financial Centre, 3rd Floor
Shirley & Charlotte Streets
P.O. Box CB-13136
Nassau, Bahamas

Sovereign Partners LP                       100,412 (2)                1.32%
Executive Pavilion
90 Grove Street
Ridgefield, Connecticut   06877
</TABLE>

*        Thomson Kernaghan & Co. Ltd. ("TK") is a broker  dealership  located in
         Ontario,  Canada  and the  number of shares  indicated  refer to record
         ownership; the Company's transfer sheets as of June 30, 1999 indicating
         that  TK is the  record  owner  of  434,939  shares  (or  5.75%  of all
         outstanding  Company shares).  To the best of Company's  knowledge such
         broker  dealership is not the  beneficial  owner of more than 5% of the
         Company's outstanding shares.

(1)      Does not include up to 3,894,563 shares which normally could be issued,
         at  any  time,  upon  conversion  of  previously   issued   convertible
         debentures (the "Convertible  Debentures") assuming conversion based on
         70% of the closing bid price on June 30, 1999 but exclusive of interest
         earned.  This number of shares, if issued,  would require disclosure of
         beneficial  ownership of in excess of 5%. However,  pursuant to certain
         terms contained in Convertible Debentures,  the holders thereof may not
         beneficially  own more than 4.99% of outstanding  Company shares (other
         than  as  a result of mandatory conversion provisions, Company exercise

                                      -31-
<PAGE>



         of  redemption  rights, more than 50% of the Company being acquired and
         provisions  of  a  similar  nature  as  same  relate  to control of the
         Company).

(2)      Does not include up to 3,025,757 shares which normally could be issued,
         at  any  time,  upon  conversion  of  previously   issued   convertible
         debentures (the "Convertible  Debentures") assuming conversion based on
         70% of the closing bid price on June 30,  1999.  This number of shares,
         if issued,  would  require  disclosure  of  beneficial  ownership of in
         excess of 5%. However, pursuant to terms of Convertible Debentures, the
         holders thereof may not beneficially own more than 4.99% of outstanding
         Company  shares  (other  than  as  a  result  of  mandatory  conversion
         provisions,  Company exercise of redemption rights or in the event that
         50% or more of the  Company is  acquired  and  provisions  of a similar
         nature as same relate to control of the Company).

         (b) Security  Ownership of  Management.  The number and  percentage  of
shares of common stock owned of record and  beneficially by each current officer
and  director of the Company and by all current  officers  and  directors of the
Company  as a group,  are as  follows  as of June 30,  1999.  To the best of the
Company's  knowledge each individual has beneficial  ownership of the shares and
sole voting power and sole investment power with respect to the number of shares
beneficially owned.
<TABLE>
<CAPTION>

Name and Address of                   Amount and Nature of          Percent
   Beneficial Owner                 Beneficial Ownership (1)        of Class (2)
-----------------------             ------------------------        ------------
<S>                                         <C>                        <C>
Dr. Gerold Weser                            200,000                    2.58%
Seiler Pollution Control
 Systems, Inc.
Dorfstrasse 12
D-22941
Jersbek, Germany

Alan B. Sarko                               300,000                    3.81%
Seiler Pollution Control
 Systems, Inc.
5115 Parkcenter Avenue
Dublin, Ohio   43017

Eckart Busch                                    -0-                      --
Petit Schoenberg 61
CH-1700
Fribourg, Switzerland

Morris D. Jaffe, Jr.                            -0-                      --
711 Navarro Street
Suite 707
San Antonio, Texas ;78205

All Officers and Directors
 As a Group (4 Persons)                     500,000                    6.20%
</TABLE>

(1)      The shares  represented  above  (500,000) are in the form of options to
         purchase  shares of Company  Common  Stock.  The options are  presently
         exercisable but are not transferable. The options were granted pursuant
         to  the  Company's   1993   Non-Statutory   Stock  Option  Plan,   1994
         Non-Statutory Stock Option Plan or 1995 Non-Statutory Stock

                                      -32-
<PAGE>



         Option Plan.
(2)      The  percentage  shown has been  determined  by dividing  the number of
         options and shares,  if any, held by the named person by the sum of the
         7,565,362  outstanding  shares and the option  shares held by the above
         referenced person while the number of shares indicated for all officers
         and directors as a group includes  500,000  options which were added to
         the total number of shares outstanding in order to determine percentage
         interest.

         The  Company  does  not  know  of any  arrangements  or  pledge  of its
securities by persons now considered in control of the Company that might result
in a change of control.

ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         PTI Management AG ("PTI"),  a stockholder of the Company has, from time
to  time,  loaned  the  Company  sums of money on an  interest-free  basis.  The
principal sum due and  outstanding,  as of March 31, 1999, was $89,085.  Persons
controlling  PTI have  advised that PTI has been  liquidated  and that it was no
longer seeking any repayment whatsoever from the Company.

         Maxon  Finance  & Trade  Ltd.  SA  ("Maxon")  as of June 30,  1999 owns
1,083,000 shares (or approximately  14.23% of all issued and outstanding shares)
of common  stock of the  Company.  In  October  of 1998  Maxon  agreed to accept
3,333,333  shares of restrictive  common stock in exchange for  cancellation  of
outstanding Company indebtedness to it approximating  $2,056,000.  See also Part
1, Item 1 "Description of Business - Licensing Agreements".

         Peter  Ruegg  ("Ruegg")  owns as of June 30,  1999  500,000  shares (or
approximately 6.61% of all issued and outstanding shares) of common stock of the
Company.  Pursuant  to  February  1999  agreement  the  Company  issued  500,000
restrictive  shares to Peter Ruegg in exchange for extinguishment of outstanding
debt of $150,000 (evidenced by July 22, 1998 8% unsecured convertible promissory
note).

         Werner  Heim (a former  officer  and  director  who  resigned  from all
positions held in June 1998) has individually loaned funds to the Company. As of
March 31,  1999,  the sum of $107,216  (inclusive  of  interest of $12,724)  was
outstanding.  In June 1999,  the debt was converted into equity with the Company
issuing  142,955  restrictive  shares  of its  common  stock to  Werner  Heim in
cancellation of such outstanding indebtedness.

         Heinz Heim (a brother of the Company's former  President,  Werner Heim)
has individually  loaned funds to the Company.  As of March 31, 1999, the sum of
$55,525  (inclusive of interest of $5,225) was  outstanding.  In June 1999,  the
debt was  converted  into  equity with the Company  issuing  73,633  restrictive
shares of its common  stock to Heinz Heim in  cancellation  of such  outstanding
indebtedness.

         The  Company  has paid  during the years ended March 31, 1998 and March
31,  1999,  to  a  supplier,  Seiler  HT  AG,  a total of $6,040,371 towards the
purchase of its initial High Temperature  Vitrification  System. Seiler HT AG on
behalf  of the Company  was to construct  system  plants,  test  the  system and
perform research and development  services  on  an  ongoing  basis.  Mr. Niklaus
Seiler, a former Vice President and director of the Company, was the founder and
a director of Seiler HT AG.  In February 1999 Seiler HT AG  declared  bankruptcy
and the entire amount indicated above has been written off.

         Gerold  Weser,  Chairman of the Board of Directors and  President,  has
made unsecured  non-interest  bearing  advances to the Company which are payable
upon future mutual agreement of the  parties.  The advances have been  presented

                                      -33-
<PAGE>



as  a  long  term  liability  in  the  accompanying balance sheet based upon the
parties  intent  to  not  repay the advances currently. The balance at March 31,
1999 was $403,887.

         See  also Note 7 to  financial  statements  as same  relates to Related
Party Transactions.



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

         (a)      Reference  is  herewith  made  to  the  reports  and audits of
                  consolidated financial statements.

         (b)      During the last  quarter of the  Company's  fiscal  year ended
                  March 31, 1999, the Company filed Form 8-K and 8-K/A with date
                  of report of February 12, 1999 (as filed February 23, 1999 and
                  March 9, 1999).

         (c)      Exhibits - None.


                                      -34-
<PAGE>



                                   SIGNATURES


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

                     SEILER POLLUTION CONTROL SYSTEMS, INC.
                 By: \S\Dr. Gerold Weser
                     Dr. Gerold Weser, Chairman of the Board
                     of Directors, President and CEO


         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  registrant and in the capacities and
on the dates indicated.



                           Chairman of the Board            Dated: July 22, 1999
\S\Dr. Gerold Weser        of Directors, President
                           and CEO



                           Vice President, Treasurer,       Dated: July 21, 1999
\S\Alan B. Sarko           Secretary, CFO and
                           Director



                           Director                         Dated: July 22, 1999
\S\Eckart H. Busch



                           Director                         Dated: July   , 1999
Morris D. Jaffe, Jr.



                                      -35-