UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
(Mark One)

(X)      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934  (Fee Required)
         For the fiscal year ended March 31, 1997

( )      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 (No Fee Required) For the transition period 

                         Commission file number 0-16523

                           Madera International, Inc.
                 (Name of small business issuer in its charter)

              Nevada                                           68-0318289
(State of incorporation or organization)   (I.R.S. Employer Identification No.)

           2600 Douglas Road, Suite 1004, Coral Gables, Florida 33134
              (Address of principal executive offices) (Zip Code)
                    Issuer's telephone number (305) 774-9411

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

         Securities registered under Section 12(g) of the Exchange Act:

                          Common stock, $0.01 par value

                                (Title of class)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the preceding 12 months and
(2) has been subject to such filing requirements for the past 90 days.
(X) YES ( ) NO

As of June 3, 1996, 61,567,019 common shares were outstanding and the aggregate
market value of the common shares (based upon the average bid and asked prices
on such date) of the Registrant held by non-affiliates was approximately
$3,500,000.

Check if there is no disclosure of delinquent filers in response to item 405 of
Regulation S-B 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 1O-KSB or any
amendment to this Form 1O-KSB. ( )

Revenues for the fiscal year ended March 31, 1997 totaled $1,489,000.

Documents incorporated by reference: See Item 13 hereof.

Total number of pages in this document:[33]


                                       1

<PAGE>


                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

1.  SUMMARY

         Madera International,  Inc., a Nevada corporation,  merged in February,
1994, with Weaver Arms Corporation,  its parent ("Weaver"), with Weaver changing
its name to "Madera International, Inc" ("Registrant"). The history of Weaver is
contained in prior 10 K's,  which history  includes the detailed  explanation of
Weaver's emergence from Chapter 11 proceeding as Madera International, Inc.

         In  July  1994,  Registrant  entered  into  an  agreement  with  Ramiro
Fernandez-Moris  and his  family to  acquire  assets  held by them in the family
owned  corporation  Forest  and  Environmental  Resources  of the  Amazon,  Inc.
("FEROA").  These assets consist of 478,000 acres of fee owned timber  producing
property in Brazil, as well as substantial  acreage in Bolivia and Peru that are
long  term  concessions.  The  value  of  these  properties  is  based  upon  an
independent  third  party  appraisal  supplied  as  part  of the  due  diligence
procedure.  The value used is $27,000,000.  In addition to the real property,  a
working  sawmill was also  acquired as part of the  agreement.  This  sawmill is
located in Brazil, and is in operation.  Its appraised value is $2,600,000.   It
has a capacity  of 200 cubic  meters a day.  The final  part of the  acquisition
consists of existing inventory of banac and cedar at cost of $630,000.

         The  consideration  for this purchase was 10,000,000  shares of Class B
Preferred stock, convertible into a maximum of 15,000,000 shares of common stock
to be adjusted by any stock splits and subject to the  production of earnings of
$2,000,000  annually from the assets  acquired.  A finders fee was paid for this
acquisition  amounting to  approximately  five  percent (5%) of the  acquisition
value.  The Preferred  shares issued to the principals for this transaction have
been  converted  into Common shares as of March 3, 1996,  the  Preferred  shares
issued to the finders was converted also during the current fiscal year.

         January 10, 1995, Registrant entered into a letter agreement with Ralph
Financial Corporation ("RFC"),  pursuant to which Registrant acquired the rights
to 400,000  hectares of timber  producing  properties  in Brazil in exchange for
12,000,000  newly issued shares of Series C Preferred  Stock with a stated value
of $1.00 per share.  Registrant  determined that the representations made by RFC
were not accurate.  Registrant rescinded the transaction as of December 15, 1995
(See Item 13.b.,  Reports on Form 8-K). The shares issued by Registrant for this
transaction  have been canceled,  however,  legal action is ongoing to allow the
cancellation completion and potential recovery.




                                       2
<PAGE>


         On March 30, 1995, Registrant entered into a Timber Concession Purchase
Agreement  with Mandarin  Overseas  Investment  Co., Ltd.  ("Mandarin")  for the
acquisition  of a  twenty  three  and one half  percent  (23.5%)  interest  in a
mahogany  rich  concession in Peru.  The  Registrant  had certain  disputes with
Mandarin.  In the  resolution  of those  disputes,  the  Registrant  acquired an
additional  sixty  percent  (60%)  interest,  bringing  the  Registrant's  total
interest to 83.5%.  Then  subsequently,  due to the potential of this  property,
Registrant acquired an additional 14.5% bringing its total ownership to 98%. The
concession  encompasses  30,000 hectares and has approximately 400 million board
feet of  marketable  hardwood in reserve.  The  concession is for ten (10) years
with a renewable  option for an additional ten (10) years,  and a further option
to turn the  concession  into fee ownership for a minimal cost.  The  extraction
rights are approximately 270,000 cubic meters annually.

         The  purchase  price of this  acquisition  is one million  five hundred
thousand dollars  ($1,500,000).  This amount has been paid with the exception of
$423,750  that  remains  on the  books as a  liability  until  stock  is  issued
converting the liability to equity.  The  Registrant  will issue common stock in
1997 when approved by its Board of Directors.

         In January,  1997,  Registrant  purchase an additional 251,000 acres of
prime  timberland  close to its fee owned  property in Brazil.  This  additional
acreage is destined for  environmental  programs that are being  established  by
Registrant.  These  programs  will be conducted  in a wholly  owned  subsidiary,
Madera International Environmental, Inc.

BUSINESS

         Registrant  specializes  in the  harvesting  and  exportation of timber
products  from South America to buyers  throughout  the world.  Registrant  owns
approximately  707,000 acres of prime timber  property in the State of Amazonas,
Brazil.  This  property  has abundant  species of  commercial  value,  including
Spanish  Cedar,  Banak and  Marupa.  Harvest  is  seasonal.  Raw  materials  are
transported by river to the Company's  mill, the Froeste Wood Saw Mill,  located
at Rua de Maio, Benjamin Constat,  Amazonas, Brazil. At the end of the March 31,
1997 fiscal year, an inventory of  approximately  3,000,000 board feet of cedar,
marupa and banak in various  sizes of rough cut lumber  were  awaiting  customer
orders.  Lumber is sold to established customers who are members of the National
Hardwood Lumber  Association  (NHLA). The NHLA sales code applies to established
uniform  practices  in the  conduct  and  regulation  governing  elements of all
transactions.






                                       3
<PAGE>


         In May 1995,  Registrant  acquired an interest in approximately  30,000
hectares  of prime  timber  producing  property  in Peru.  This  land is rich in
mahogany, and will begin supplying revenues in late 1997.

         In its first full year of harvesting  operation,  which should commence
in late 1996,  Madera had plans to harvest  1,000  hectares of forest which will
produce 35 cubic meters of wood in the round per hectare, or 35,000 cubic meters
of wood in the round. This converts into nearly 15 million board feet of timber.
This  program  is  being  delayed,  since  it has  been  determined  it is  more
advantageous  to purchase  logs from  independent  producers and to preserve the
prime forests owned by the  Registrant . The timber will be sold  throughout the
world to wholesalers and end users. The selective felling of timber is supported
by a reforestation program,  which includes surveys and forest inventories,  and
promotes preservation and conservation of those areas affected by the harvesting
program.

         In order to  realize  the  maximum  return  of its  timber  properties,
Registrant  will be  required  to make a  substantial  investment  in its timber
operation.  Registrant  will be dealing with contract  labor in the countries in
which it has properties, therefore, will have little responsibility for labor.

         Registrant's  management intends to balance the pursuit of profits with
the needs of the fragile  environment.  Registrant  is committed to an extensive
reforestation program,  planting more new trees than harvested. This will ensure
that every acre is fully restocked to guarantee a continual  supply of trees for
the future,  while  maintaining  the  precious  wildlife,  water  resources  and
ecosystem of the forest.

         Based  on  recent  prices  of  comparable   lumber  as  that  found  on
Registrant's property,  initial price indicators  conservatively estimated sales
prices of $1.50.  per board  foot.  It should be noted  that this is an  average
price  considering  the mix of hardwoods  being  marketed by  Registrant.  These
estimates  would generate sales of $10 Million U.S. in  Registrant's  first full
year of operation, building to $40 Million U.S. annually in four years.

Employees

         The Registrant has no employees;  all services are performed by outside
contractors or officers/directors (see "ITEM 11. EXECUTIVE COMPENSATION").  Most
of the efforts of the  Registrant  will be  performed  by contract  labor in the
particular  country wherein the timber  operations occur. It is anticipated that
several hundred  laborers will be employed in each of the countries in which the
Registrant is actively harvesting and distributing timber and related products.




                                       4
<PAGE>


ITEM  2. DESCRIPTION OF PROPERTY

         Registrant leases its office space  (approximately  1,700  square feet)
on a two (2) year lease at the rate of $3,200.00 per month.  The lease runs from
August 1, 1996 through July 31, 1998.

ITEM  3. LEGAL PROCEEDINGS

         On January 11,  1995,  the  Company was named as a defendant  in a case
entitled  HARRIS  FOREST  PRODUCTS,  INC.,  AN  OREGON  CORPORATION  VS.  MADERA
INTERNATIONAL, INC., A NEVADA CORPORATION, filed January 11, 1995 in the Circuit
Court  for the  State of  Oregon,  County  of  Clackamas,  Case  No.  95-01-165.
Plaintiff alleged breach of contract, alleging that it entered into an agreement
on August 4, 1994 with the defendant for the purchase and sale of railroad ties,
that defendant failed to ship the order, and that plaintiff suffered damages for
lost profits in the amount of  $10,990,000.00.  The  plaintiff  further  alleged
breach of contract arising from an alleged  agreement  between the plaintiff and
defendant  for the  purchase  and sale of one  million  board feet of kiln dried
Caribbean Pine,  claiming  damages in the amount of  $4,100,760.00.  Plaintiff's
third claim was based on an alleged  account that was stated  between  plaintiff
and  defendant  in the  amount  of  $3,520.25  for sums  allegedly  advanced  by
plaintiff  to  defendant.  On March 6, 1995 a default  judgment was taken in the
amount of $15,940.483.25.  The defendant filed a Motion for Relief from Judgment
on April 11, 1995. An Order Granting Defendant's Motion for Relief from Judgment
was entered on May 15, 1995. Management denies all essential allegations of this
case. On March 1, 1996, a pretrial  settlement  conference was held at which the
parties agreed to a Stipulated  Judgement With Covenant Not to Record or Execute
(See Exhibit No. 2.1). A settlement in the amount of $50,000.00  was agreed upon
and full payment has been made, thus resolving the matter. However, the original
attorney involved,  although dropping out of the case and abandoning  Registrant
is now  claiming an  additional  amount due of under  $10,000.00.  This claim is
being opposed by Registrant.

         WRIGHTS  EXECUTIVES,  INC.,  DBA,  BEACON  HILL  RESOURCES  VS.  MADERA
INTERNATIONAL,  INC., A NEVADA  CORPORATION,  filed on February 7, 1995,  in the
District  Court of the State of Nevada,  County of Clark, Case No. A 342542 is a
matter whereby the plaintiff alleged that it was owed $125,736.03 resulting from
an agreement entered into by plaintiff and Forest and Environmental Resources of
the Amazon, Inc. ("FEROA"), pursuant to which the plaintiff agreed to loan FEROA
$70,137.00,  with interest to accrue at the rate of one and one-half  percent (1
1/2%) per month.  In furtherance  of the agreement,  FEROA executed a promissory
note in the  amount  of  $88,000.00  on July 2,  1988  in  favor  of  plaintiff.
Plaintiff  alleged that FEROA transferred all of its assets consisting of timber
properties and concessions to defendant, and that stock paid by the defendant in
consideration  of the  transfer  was not  transferred  to  FEROA,  but to Ramiro


                                       5
<PAGE>


Fernandez-Moris,  the chairman of FEROA,  resulting in FEROA becoming insolvent,
and unable to pay its obligation to the plaintiff. A Motion for Summary Judgment
against the Company was  substantiated  on November  27,  1995,  and the Company
ordered to pay the sum of $158,834.00  to the Plaintiff.  Registrant has settled
this  matter on behalf of  Registrant,  Ramiro  Fernandez-Moris  and FEROA.  The
settlement  is for  $171,500.00,  payable at a minimum of  $5,000.00  per month,
commencing May 1996, and  continuing  until the debt is paid off.  Plaintiff has
the option to convert into common stock at a 25% discount  from the bid price as
long as the bid price is $0.50 per share or higher.  This  option  applies  only
after the  stock  reaches a bid  price of  $0.50,  and may be  exercised  in any
portion of the total value. This claim is being paid by Registrant.

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

         There were no matters  submitted to a vote of security  holders  during
the year ended March 31, 1997.































                                       6
<PAGE>


                                     PART II

ITEM  5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

1.   MARKET INFORMATION

         The  Company's  Common  Stock has been  trading in the NASDAQ  Bulletin
Board since May 13, 1994. There is no established  public trading market for the
Company's  Class A warrants  issued  under the Plan.  Bid and ask prices for the
Common  Stock  are  carried  electronically  on  the  National  Daily  Quotation
Service's  Bulletin  Board  originally  under the symbol  "WOOD",  then  changed
arbitrarily by the NASDAQ to "MDIT" under which it now trades. The range of high
and low bids for the  Company's  Common Stock from the periods  indicated are as
set forth in the following table:

                                    Fiscal Year Ended March 31, 1997
                          -----------------------------------------------------
Quarter    Range    Common Stock - Bid   Common Stock - Asked  Class A Warrants
-------    -----    ------------------   --------------------  ----------------

   1        High          $0.06                 $0.09                (1)
            Low            0.06                  0.12                (1)
   2        High           0.06                  0.09                (1)
            Low            0.06                  0.09                (1)
   3        High           0.07                  0.09                (1)
            Low            0.07                  0.09                (1)
   4        High           0.12                  0.13                (1)
            Low            0.07                  0.09                (1)

________________
(1)  Not quoted.

Source:  Report  dated  5/31/97 Real Time  Quotes,  from the National  Quotation
Bureau, Incorporated, Cedar Grove, New Jersey

(The foregoing  information is believed to be accurate,  but is not guaranteed.)
The quotations  listed above represent prices between dealers and do not include
retail mark-up,  mark-down or commission and there can be no assurance that they
represent actual transactions.






                                       7
<PAGE>


Market Makers:

         1.       Fahnstock & Co.
         2.       First London Securities Corporation.
         3.       La Jolla Capital Corporation
         4.       M. H. Meyerson & Co.
         5.       Naib Trading Corporation
         6,       Paragon Securities
         7.       Wien Securities

Other Market Makers enter and leave the market from time to time.

There is  presently  no  trading  market of any kind for the  Company's  Class A
warrants.

         As of May 29, 1997, in excess of 15,000,000  shares of the Registrant's
common  Stock  were  eligible  for sale  under  Rule  144,  subject  to  certain
limitations  included  in such Rule.  In  general,  under Rule 144, a person (or
persons  whose  shares are  aggregated)  who has  satisfied  a one year  holding
period,  under certain  circumstances,  may sell within any three month period a
number of shares  which does not exceed  the  greater of 1% of the  Registrant's
then  outstanding  Common  Stock or the average  weekly  trading  volume of such
Common Stock during the four  calendar  weeks prior to such sale.  Rule 144 also
permits,  under certain  circumstances,  the sale of shares without any quantity
limitation  by a person who has satisfied a two-year  holding  period and who is
not, and has not been for the preceding  three  months,  an  "affiliate"  of the
Registrant.

         Other than the Class A and B  warrants  issued in  connection  with the
Plan, there are not presently outstanding any options,  warrants or other rights
to purchase,  or any securities  convertible into or exchangeable for, shares of
the Common Stock of the Company. Registrant has one (1) class of Preferred Stock
outstanding  which is convertible into common stock (see "ITEM 1. DESCRIPTION OF
BUSINESS - 1. SUMMARY").

         The Class A warrant  entitles  the holder to purchase  one (1) share of
the  Registrant's  common stock at a price of $3.50 per share if exercised prior
to February 1, 1997.  Upon  exercise  of the Class A warrant,  the holder  shall
receive  one  (1)  Class  B  warrant  for  the  purchase  of one  (1)  share  of
Registrant's  common stock at an exercise price of $5.00 per share.  The Class B
warrant  will be  exercisable  until  February 1, 1997,  unless  extended by the
Registrant's board of directors.

         Each Class A and Class B warrant is  redeemable by the  Registrant  for
$0.01 per  warrant,  at any time  after  January  21,  1994,  upon 30 days prior


                                       8
<PAGE>


written notice to the holder  thereof.  Upon written  notice to the  appropriate
parties  and/or  regulatory  agencies,  the  Registrant  shall have the right to
reduce  the  exercise  price  and/or  extend the term of the Class A and Class B
warrants.

         The  Registrant  has not granted any rights,  or otherwise  agreed,  to
register any shares of the Common Stock of the  Registrant  under the Securities
Act of 1933 for any security holder.

II     HOLDERS

         As of June 3, 1997,  there were  approximately  2,800 record holders of
the Registrant's  Common Stock.  See "Description of Securities."  This includes
531 direct holders and approximately 2,300 street holders.

III    DIVIDENDS

         A.  Since  inception,  the Registrant has not paid any dividends on its
capital stock.

         B.  The  Registrant  does not foresee  that it will have the ability to
pay any  dividends on its capital  stock during the fiscal year ending March 31,
1998,  Management  however, is contemplating the possible spin-off of its wholly
owned subsidiary,  Madera International Environmental,  Inc as a dividend to its
shareholders,  if this is approved  it will be  subsequently  announced.  At the
present time, the Registrant's anticipated working capital requirements are such
that it intends to follow a policy of retaining earnings in order to finance the
future   expansion  and  development  of  its  business.   See  "Description  of
Securities."

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

I.   PLAN OF OPERATION

         The  Registrant  has set up a network of brokers that are  beginning to
supply  potential  customers  for the  products to be shipped.  Upon  receipt of
approval of product available for shipment,  Registrant's  staff will inform the
brokers of the  product's  availability.  At that time,  the brokers will inform
customers  and the flow of  product  will  begin.  It should  be noted  that all
customers  that require  financing for shipments will be required to be approved
by financiers before any shipment is arranged.






                                       9
<PAGE>


         Regular  shipments  of product  have  commenced in 1996 to customers in
Italy.

II.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
     RESULTS OF OPERATIONS

         The  Registrant  continues  to  accumulate  inventory  in  Brazil.  The
inventory  now  exceeds $3  Million.  Shipments  have begun on a regular  basis,
although it continues to be difficult to obtain  appropriate  shipping schedules
from  shipping  companies.  This is  expected  to  change as  continued  regular
shipping  occurs.  Profit  was  first  demonstrated  in the  third  quarter  and
continues into the fourth quarter as described in the financial statements.  The
prophecy discussed in the previous fiscal year is beginning to materialize.  The
accumulated  inventory will be turned into profitable  sales as the current year
develops.  All  administrative  expenses  are being  held to a minimum  and will
continue in that manner.  Based upon the inquiries  that have been  generated by
the sales  force,  it appears that the  projected  sales are  approaching  their
target.  The shipments,  however,  continue to be dependent upon financing which
the Registrant expects to continue to receive.

         The  producing   properties  now  held  by  the  Registrant   encompass
approximately 707,000 acres.

         The Registrant's working capital resources during the years ended March
31, 1996 and March 31, 1997 have been provided  primarily from two sources:  (1)
the efforts of the  Management  of the  Registrant  in  bringing  capital to the
Registrant  through  the use of  Private  Placements,  as well as  direct  loans
arranged by Management,  and (2) equity conversions  arranged by it's investment
bankers.  The  commitments  from these sources have led the Company to a working
capital balance at March 31, 1997 of $(588,627) versus a working capital balance
of  $(588,627) at the 1996 fiscal year end. The negative  working  capital as of
March 31, 1996 arises from the  inclusion of two items in the Current  Liability
Section of the Registrant's  Balance Sheet (See Financial  Statements,  Page F-4
and Page F-5). These items; Stock to be Issued and Loans from Insiders,  will be
converted  into equity in the coming  fiscal year,  thus  improving  the working
capital for fiscal 1997.


ITEM 7.  FINANCIAL STATEMENTS

         See Pages F-1 through  F-15  attached  hereto for copies of the audited
annual financial statements of the Company.





                                       10

<PAGE>


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

         None.

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         Compliance  With Section 16(a) of the Exchange Act.


DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
-----------------------------------------------
Name                        Age    Position
----                        ---    --------

Ramiro Fernandez-Moris      68     President, Chief Executive Officer, 
                                   Director, and Chairman of the Board

Ray Fernandez               42     Executive Vice President - Sales

Regina Fernandez            37     Secretary

Roman Fernandez-Moris       40     Vice President and Director

Arthur Mintz                61     Director

         Mr.   Ramiro   Fernandez-Moris   produced   lumber  from  family  owned
timberlands in Cuba until he was forced into exile by Castro's regime.  In 1962,
he founded  Karobi Lumber  Company in Florida,  trading  significant  amounts of
Banak  and  Mahogany  logs from  Colombia,  Equador,  and  Brazil.  In 1968,  he
organized  Tropical  Lumber  Company to expand  production to Brazil,  Peru, and
Bolivia.   During  the  1962-1968,   1978-1985,   and  1987-1989  periods,   Mr.
Fernandez-Moris  was a supplier for Georgia  Pacific at various  locations.  Mr.
Fernandez-Moris   was   Chairman  of  the  Board  and   Treasurer  of  Forest  &
Environmental Resources of the Amazon, Inc.


         Mrs. Regina  Fernandez,  born in Havana,  Cuba, and a resident of Miami
since 1960, attended Miami-Dade Community College. In 1980, she joined the staff
of 1st  Nationwide  Saving  and in 1982  was  promoted  to  Operations  Manager,
responsible for the supervision of 23 employees. She was the only 1st Nationwide
Savings  employee in Florida to be honored in 1983 and 1984 for  outstanding job
achievements.  In 1985, Mrs. Fernandez was employed by Karobi Lumber,  where she
specialized in organization,  administration,  distributions, and financing, and



                                       11
<PAGE>


was assigned to South American  operations in Brazil, Peru and Bolivia. In 1992,
Mrs.   Fernandez  joined  World  Trade  Services,   heading  lumber  operations,
contracting  lumber sales and procurement from South America as well as domestic
suppliers.  In 1994, she was employed as a Commercial Expert for Bureau Veritas,
N.A., working closely with the international trading industry. On March 2, 1996,
Mrs. Fernandez joined Madera as Secretary.

         Mr. Ramiro (Ray)  Fernandez-Moris,  Jr. attended the National  Hardwood
Lumber Association Inspection Training School in 1976, specializing in the study
of quality control and the technical aspects of the lumber business. He has been
involved in lumber sales, trading, and marketing for many years.

         Mr.  Roman  Fernandez-Moris   attended  the  National  Hardwood  Lumber
Association  inspection  training  school in 1976.  He was a supervisor  for Pat
Brown Lumber Co., in Roxboro,  North  Carolina  from 1977 to 1979.  From 1979 to
1984, Mr. Fernandez-Moris was an exclusive contractor for Kimball International,
specializing  in the procurement of tropical  species.  From 1984 until 1986, he
was associated with Georgia Pacific in Savannah,  Georgia.  Mr.  Fernandez-Moris
was  Director  of  Field  Operations  in  Peru  for  Comercial  Maderara  during
1987-1992,  and  served as  President  and  Director  of Forest &  Environmental
Resources of the Amazon, Inc. from May 1993 until August 1994.

         Mr.  Arthur Mintz,  a lawyer  licensed to practice in state and federal
courts,  has over 30 years of  business  and legal  expertise.  He has been Vice
President  and  General  Counsel  of Lease  Resolution  Corp.  He has  served as
Chairman  of the Board,  President,  and  General  Counsel  for  Olicon  Imaging
Systems,  Inc., AMRR Leasing Corp.,  and Mobile M.R Venture Ltd. He holds a J.D.
and L.L.B. from Northwestern Law School and a B.A. from Northwestern University.

ITEM 10.  EXECUTIVE COMPENSATION

         No executive officer of the Company earned in excess of $120,000 during
the fiscal  year ended  March 31,  1996.  All  executive  officers as a group (5
persons) received cash  compensation of approximately  $64,214 during the fiscal
year ended March 31, 1996.  The salaries of officers will be set by the board of
directors of the  Registrant.  No officer  will  receive  more than  $120,000 in
annual  compensation until the volume of Registrant's sales exceeds  $5,000,000,
or the  Registrant's  profits  exceed  $250,000  for  two  successive  quarters,
whichever first occurs.

         Except for the Stock Option Plan described  below, the Company does not
have  any  formal  bonus  plans,   stock  option  plans  or  any  other  similar
compensation plans for its executive officers.




                                       12
<PAGE>


         Directors of the Company do not receive any compensation for attendance
at meetings of the Board of Directors.

         In June 1994,  the Company  adopted a stock option plan (the "Plan") to
attract and retain qualified persons for positions of substantial responsibility
as officer,  directors,  consultants,  legal  counsel,  and other  positions  of
significance  to the  Company.  The  adoption  of the Plan was  ratified  by the
Company's  shareholders  August 1994,  at the Company's  next Annual  Meeting of
Shareholders. The Plan provides for the issuance of both Incentive Stock Options
and Non-Qualified Stock Options. The Plan, which is administered by the Board of
Directors,  provides  for the  issuance of a maximum of two million  (2,000,000)
options to purchase  shares of common  stock at the market  price on the date of
grant.  Such  options  are  exercisable  over a 10 year  period from the date of
grant. Each option lapses, if not previously exercised,  on the 10th anniversary
of the date of grant or 90 days after the optionee has terminated his continuous
activity  with the  Company,  except that if his  continuous  activity  with the
Company  terminates by reason of his death, such option of the deceased optionee
may be  exercised  within one year after the death of such  optionee,  but in no
event later than five years after the date of grant.  Options  granted under the
Plan to Company employees may not be sold,  pledged,  assigned or transferred in
any  manner  otherwise  than by will or the  laws of  descent  or  distribution.
Options  granted under the Plan to persons who are not Company  employees may be
sold,  pledged,  assigned,  or  transferred to other persons who, at the time of
such sale, pledge, assignment or transfer, qualify as optionees under the  Plan.

Compliance with Section 16(a) of Securities Exchange Act of 1934

         Section  16(a) of the  Securities  Exchange  Act of 1934  requires  the
Company's  directors and executive  officers,  and persons who own more than ten
percent of a registered  class of the Company's  equity  securities to file with
the Securities and Exchange  Commission initial reports of ownership and reports
of changes in  ownership  of Common  Stock and other  equity  securities  of the
Registrant.  Officers,  directors and greater than ten percent  stockholders are
required by SEC regulation to furnish the Registrant and Exchange with copies of
all  Section  16(a)  forms  they file.  All of these  filing  requirements  were
satisfied.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

         The following  table sets forth certain  information as of June 3, 1996
with respect to the beneficial  ownership of the Registrant's  Common Stock, par
value $.0l per share,  by  holders  of more than 5% of the  Registrant's  Common
stock,  by each director and  executive  officer of the  Registrant,  and by all



                                       13
<PAGE>


directors and officers of the Registrant as a group.  This  calculation is based
only upon the shares  issued and does not give effect to Class A Warrants  since
there is not expressed intent to convert the warrants into common stock.


   Name of Beneficial Owner               Number of Shares         Percent of
          and Class                    Beneficially Owned (1)     Class (2)(3)
                                        
Preferred Stock
---------------
Ramiro Fernandez-Moris (1)                   1,000,000              100.00%

Common Stock
------------
Ramiro Fernandez-Moris (1)                  20,700,000               33.40%
Regina Fernandez                               125,000                0.02%
Roman Fernandez-Moris                          202,000                0.03%
Ramiro (Ray) Fernandez-Moris, III              202,000                0.03%
Arthur Mintz                                 3,000,000                4.90%

All Directors and Officers as a
group (5 individuals)

Preferred Stock                             10,000,000              100.00%
Common Stock                                24,229,000               39.07% 



(1) Unless otherwise  indicated,  all shares are beneficially owned and the sole
voting and investing  power is held by the person named in the table above.  The
address for each beneficial holder is c/o the Company.

(2) Based upon 61,567,019 shares of Common Stock  outstanding.  See "Description
of Securities.

(3) Less than One Percent (1%).

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Beginning  in July,  1994 upon the  acquisition  of  property  from the
Fernandez-Moris  family,  this  family  has  gradually  assumed  control  of the
Registrant  and is now the  controlling  shareholder  and also in control of the
operations  of the  Registrant.  Additionally,  as required by any negative cash
flows,  the  family  has  consistently  provided  funding  for  the  operations.
Additional  properties  have  been  acquired  from the  family  at  their  cost,
subsequent to the original  acquisition,  which was an arms length  transaction.



                                       14
<PAGE>


These  transactions  are reported in other  sections of this document as well as
the Financial Report of the independent accountants.

         Certain relationships that existed prior to the Fernandez-Moris  family
assuming  control of the Registrant have been  previously  reported in past 10 K
Reports.  These relationships no longer exist and have not existed for more than
one (1) year.

         Ramiro    Fernandez-Moris,    President   and   principal   shareholder
beneficially  of the  Registrant  has  received  1,000,000  shares  of  Class  D
Preferred Stock of the Registrant.  The Certificate of Designation as filed with
the State of Nevada states that this class of Preferred  Stock allows the holder
the right to  convert  it into a fifty one (51)  percent  control  factor of the
voting Common Stock. The conversion period is for five (5) years and can only be
done in the event of any of the  following:  Sale of the Company,  Retirement of
Ramiro Fernandez-Moris, The termination of Ramiro Fernandez-Moris without cause,
or the expiration of the five year period. These conversion privileges were made
to protect Ramiro Fernandez-Moris who placed his assets into the Registrant at a
time when the stock was selling at a much higher  price and to reflect  that the
existing  market  value is lower than the fair  market  value of the  underlying
assets.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

a.       The following documents are filed as part of this report:

                                                                      Number
(1)      Financial Statements -                                       ------

         Report of Independent Accountants                             F-1

         Balance Sheet at March 31, 1996 and 1995                      F-2 - 3

         Statement of Operations for the Years Ended                   F-4
         March 31, 1996 and 1995

         Statement of Changes in Stockholders' Equity                  F-5
         for the Years Ended March 31, 1996, 1995 and 1994

         Statement of Cash Flows for the Years Ended                   F-6
         March 31, 1996 and 1995

         Notes to Financial Statements                                 F-7 - 15




                                       15
<PAGE>


(2)      Exhibits to this report are as follows:

 Ex. No.          Description of Document

         N/A

b.       Reports on Form 8-K - fourth quarter ended

1.       Form  8-K,   dated   December  15,  1995  with   respect  to  Item  2.,
Acquisition  or Disposition of Assets.



































                                       16
<PAGE>


                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders
of Madera International, Inc. and Subsidiaries:

We have audited the consolidated  balance sheets of Madera  International,  Inc.
and  subsidiaries  as of March 31, 1997 and 1996,  and the related  consolidated
statements of  operations,  stockholders'  equity,  and cash flows for the years
then ended.  These financial  statements are the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Madera International,  Inc. and
subsidiaries as of March 31, 1997 and 1996, and the results of its  consolidated
operations and cash flows for the years then ended in conformity  with generally
accepted accounting principles.


Harlan & Boettger, LLP


San Diego, California
June 2, 1997























                                       F-1

<PAGE>



                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                                               
                                                                As of March 31,
                                                                     1996
                                                                  as adjusted
                                                     1997          (Note M)
                                                 -----------      -----------
         ASSETS

CURRENT ASSETS
     Cash                                        $   254,361      $    82,607
     Accounts receivable (Note B)                    850,550          189,000
     Inventory (Note C)                            2,775,918          490,000
                                                 -----------      -----------

TOTAL CURRENT ASSETS                               3,880,829          761,607

PROPERTY AND EQUIPMENT, net (Notes D and M)        2,486,276        2,535,000

OTHER ASSETS
     Investment in timber producing
         property (Note E)                        27,500,000       27,500,000
     Other investment (Note F)                     1,500,000        1,500,000
     Miscellaneous (Note G)                           46,882                -
     Deposits                                          5,794            1,535
                                                 -----------      -----------

TOTAL OTHER ASSETS                                29,052,676       29,001,535
                                                 -----------      -----------

                                                 $35,419,781      $32,298,142
                                                 ===========      ===========





              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       F-2

<PAGE>


                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Continued)


                                                                As of March 31,
                                                                     1996
                                                                  as adjusted
                                                      1997         (Note M)
                                                  -----------     -----------
     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable                             $   228,984     $   420,734
     Accrued expenses                                  50,178          58,354
     Common stock payable (Note F)                    423,750         423,750
     Notes payable - related party (Note H)           192,500         445,796
                                                  -----------     -----------

TOTAL CURRENT LIABILITIES                             895,412       1,348,634

     TOTAL LIABILITIES                                895,412       1,348,634
                                                  -----------     -----------

COMMITMENTS AND CONTINGENCIES (Note L)                      -               -

STOCKHOLDERS' EQUITY (Note J)
     Preferred stock, $0.01 par value,
         100,000,000 shares authorized,
         1,000,000 and 500,000 shares
         issued and outstanding at March 31,
         1997 and 1996, respectively                   10,000           5,000
     Common stock, $0.01 par value,
         250,000,000 shares authorized,
         61,567,019 and 41,964,132 shares
         issued and outstanding at March
         31, 1997 and 1996, respectively              615,669         419,640
     Additional paid-in capital                    37,459,642      33,967,741
     Retained deficit                              (3,560,942)     (3,442,873)
                                                  -----------     ----------- 

     TOTAL STOCKHOLDERS' EQUITY                    34,524,369      30,949,508
                                                  -----------     -----------

                                                  $35,419,781     $32,298,142
                                                  ===========     ===========



              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       F-3

<PAGE>


                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                   For the Year Ended March 31,
                                                                     1996
                                                                  as adjusted
                                                       1997        (Note M)
                                                    ----------    -----------
REVENUES
     Timber sales                                   $1,911,241    $   189,000

COST OF SALES                                        1,221,679        171,532
                                                    ----------    -----------

Gross profit                                           689,562         17,468

OPERATING EXPENSES
     Legal and professional fees                       583,493        764,865
     Field operations and travel                        40,027         11,217
     Administrative and other costs                    155,879        116,515
     Depreciation (Note M)                              66,809         65,000
     Bad debt                                                -         46,000
     Legal settlements (Note L)                              -        258,834
                                                    ----------    -----------

         TOTAL OPERATING EXPENSES                      846,208      1,262,431
                                                    ----------    -----------

Loss from operations                                  (156,646)    (1,244,963)

OTHER INCOME (EXPENSES)
     Miscellaneous income                              118,109          6,966
     Interest expense                                  (48,578)       (40,998)
     Loss from disposition of assets (Note E)          (30,954)      (472,500)
                                                    ----------    -----------

         TOTAL OTHER INCOME (EXPENSES)                  38,577       (506,532)
                                                    ----------    -----------

LOSS BEFORE INCOME TAXES                              (118,069)    (1,751,495)

INCOME TAXES (Note I)                                        -              -
                                                    ----------    -----------

NET LOSS                                            $ (118,069)   $(1,751,495)
                                                    ==========    ===========

NET LOSS PER COMMON SHARE                           $    (.002)          (.06)
                                                    ==========    ===========

AVERAGE COMMON SHARES OUTSTANDING                   52,514,943     27,514,882
                                                    ==========    ===========

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       F-4
<PAGE>

<TABLE>
                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                                                                           Additional
<CAPTION>
                                            Common Stock             Preferred Stock         Paid-In      Retained
                                         Shares       Amount       Shares       Amount       Capital       Deficit         Total
                                       ----------   ---------   -----------   ---------   ------------   -----------   ------------
<S>                                    <C>          <C>          <C>          <C>         <C>            <C>           <C>         
BALANCE, March 31, 1995                12,075,632   $ 120,755    22,500,000   $ 225,000   $ 44,216,396   $(1,691,378)  $ 42,870,773
Issuance of stock for cash              2,350,000      23,500            --          --        118,500            --        142,000
Conversion of preferred stock
  for common stock                     13,500,000     135,000   (10,000,000)   (100,000)       (35,000)           --             --
Issuance of stock for services          9,393,500      93,935            --          --        657,545            --        751,480
Issuance of stock for investment        5,070,000      50,700            --          --      1,013,550            --      1,064,250
Return of stock issuances for
  rescission of contracts for
  assets                                 (425,000)     (4,250)  (12,000,000)   (120,000)   (12,003,250)           --    (12,127,500)
Net loss                                       --          --            --          --             --    (1,686,495)    (1,686,495)
                                      -----------   ---------   -----------   ---------   ------------   -----------   ------------
BALANCE, March 31, 1996, as
  previously reported                  41,964,132   $ 419,640       500,000   $   5,000   $ 33,967,741   $(3,377,873)  $ 31,014,508
                                      -----------   ---------   -----------   ---------   ------------   -----------   ------------ 
Adjustment for correction of
  an error in prior period                     --          --            --          --             --       (65,000)       (65,000)
                                      -----------   ---------   -----------   ---------   ------------   -----------   ------------
BALANCE, March 31, 1996,
  as adjusted                          41,964,132   $ 419,640       500,000   $   5,000   $ 33,967,741   $(3,442,873)  $ 30,949,508
                                      -----------   ---------   -----------   ---------   ------------   -----------   ------------ 
Issuance of stock for cash              4,250,000      42,500            --          --        437,500            --        480,000
Issuance of stock for services         10,650,100     106,501            --          --        546,689            --        653,190
Conversion of preferred stock
   Series B for common stock              702,787       7,028      (500,000)     (5,000)        (2,028)           --             --
Issuance of common stock for
   relief of debt                       4,000,000      40,000            --          --        119,740            --        159,740
Issuance of preferred stock
   Series D for inventory
   (Note J)                                    --          --     1,000,000      10,000      2,390,000            --      2,400,000
Net loss                                       --          --            --          --             --      (118,069)      (118,069)
                                      -----------   ---------   -----------   ---------   ------------   -----------   ------------ 
BALANCE, March 31, 1997                61,567,019   $ 615,669     1,000,000   $  10,000   $ 37,459,642   $(3,560,942)  $ 34,524,369
                                      ===========   =========   ===========   =========   ============   ===========   ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       F-5

<PAGE>


                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                    For the Year Ended March 31,
                                                                      1996
                                                                   as adjusted
                                                         1997        (Note M)
                                                      ---------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                           $(118,069)   $(1,751,495)
   Adjustments to reconcile net loss
     to net cash used in operating activities:
         Stock issued for services rendered             653,190        751,480
         Loss from investments                               --        472,500
         Depreciation (Note M)                           66,809         65,000
     Changes in operating assets and liabilities:
       (Increase) decrease in:
         Accounts receivable                           (661,550)      (185,000)
         Inventory                                      114,082             --
         Other assets                                   (51,141)        (1,535)
       Increase (decrease) in:
         Accounts payable                              (191,750)       195,521
         Accrued expenses                                (8,176)       140,748
                                                      ---------    -----------
         NET CASH USED IN OPERATING
           ACTIVITIES                                  (196,605)      (312,781)

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property, plant & equipment              (18,085)            --
                                                      ---------    -----------
         NET CASH USED IN INVESTING
            ACTIVITIES                                  (18,085)            --
                                                      ---------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from related party debt                          --        234,055
   Payments on related party debt                       (93,556)            --
   Proceeds from issuance of common stock               480,000        142,000
                                                      ---------    -----------
         NET CASH PROVIDED BY FINANCING
           ACTIVITIES                                   386,444        376,055
                                                      ---------    -----------
INCREASE IN CASH                                        171,754         63,274

CASH, AT BEGINNING OF YEAR                               82,607         19,333
                                                      ---------    -----------
CASH, AT END OF YEAR                                  $ 254,361    $    82,607
                                                      =========    ===========

              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       F-6
<PAGE>


                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


A.   Summary of Significant Accounting Policies:

     Nature of Operations

     Madera  International,  Inc., a Nevada  corporation  (formerly  Weaver Arms
     Corporation) emerged from Chapter 11 Bankruptcy  proceedings on January 21,
     1994.  During the fiscal year ended March 31, 1997, the Company started two
     subsidiaries:  Asseradora Itaya, Inc. ("Itaya") a Peruvian  corporation and
     Madera  International   Environmental,   Inc.  ("Environmental")  a  Nevada
     corporation,   together  ("The  Company").   All  significant  intercompany
     transactions and amounts have been eliminated in the consolidating process.

     The  Company,  in  conjunction  with Itaya,  is engaged in the  harvesting,
     milling and exporting of timber from South  America.  The Company sells its
     products to major lumber distributors throughout the world.

     Environmental  is dedicated to the  conservation of the Amazon Rain Forest.
     Through its three programs 1) own a tree 2) replant a tree and 3) replant a
     seedling for kids,  Environmental  manages and replants  virgin and cleared
     timberland in the Brazilian  Amazon  Region.  These programs will safeguard
     this region from any commercial  exploitation including farming,  ranching,
     mining and logging or the removal of any fauna or flora for any purpose.

     Basis of Accounting

     The  Company's  policy is to use the accrual  method of  accounting  and to
     prepare  and  present  financial  statements  which  conform  to  generally
     accepted accounting principles.  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  and disclosure of contingent  assets and
     liabilities at the date of the financial statements and reported amounts of
     revenues and expenses  during the reporting  periods.  Actual results could
     differ from those estimates.

     Net Loss Per Share

     The net loss per share is computed by dividing the net loss by the weighted
     average  number of shares  outstanding  during  the  period.  The effect of
     convertible securities are excluded from the computation because the effect
     on the net loss per common share would be anti-dilutive.


                                       F-7

<PAGE>


                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

A.   Summary of Significant Accounting Policies: (continued)

     Income Taxes

     Income taxes are provided for using the  liability  method of accounting in
     accordance with Statement of Financial  Accounting  Standards No. 109 (SFAS
     109),  "Accounting  for Income Taxes." A deferred tax asset or liability is
     recorded for all temporary differences between financial and tax reporting.
     Deferred tax expense  (benefit) results from the net change during the year
     of deferred tax assets and liabilities.

     Revenue and Cost Recognition

     Revenues are recognized in the period in which they are considered  earned.
     General and administrative costs are charged to expense when incurred.

     Inventories

     Inventory is stated at the lower of cost or market.  Cost is  determined by
     the first-in, first-out method.

     Property and Equipment

     Property and  equipment are stated at cost.  Depreciation  is computed over
     the  estimated  useful lives of the assets,  which range from 5 to 7 years.
     Major renewals and  improvements  are  capitalized,  while  maintenance and
     repairs are expensed when incurred.

     Nonmonetary Transactions

     The Company  records  nonmonetary  transactions  in accordance  with APB-29
     "Accounting for Nonmonetary  Transactions." The transfer or distribution of
     a nonmonetary asset or liability is based on the fair value of the asset or
     liability  that is  received  or  surrendered,  whichever  is more  clearly
     evident.

     Cash Equivalents

     For purposes of the  statement  of cash flows,  the Company  considers  all
     highly liquid investments purchased with a maturity of three months or less
     to be cash equivalents.

     Concentration of Credit Risk

     The Company  maintains their cash at high quality  financial  institutions.
     The balances at times,  may exceed  federally  insured limits.  The Company
     believes  that no  significant  concentration  of credit  risk  exists with
     respect to cash investments.


                                       F-8
<PAGE>


                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

B.   Accounts Receivable:

     Accounts receivable  represent amounts due for sales of timber.  Management
     has  determined  that  the  entire  amount  as of March  31,  1997 is fully
     collectible.

C.   Inventory:

     Inventory as of March 31, 1997 and 1996  consists of varying sizes of rough
     cut mahogany and cedar lumber awaiting  customers orders.  The valuation of
     the inventory was made by an  independent  third party who  determined  the
     quantity and value of the existing  inventory.  Some of the  inventory  was
     purchased  from  Ramiro  Fernandez-Moris,  President  of  the  Company,  in
     exchange  for  preferred  stock  (Note J). The  majority  of the  inventory
     balance was purchased with cash from unrelated third parties.

D.   Property and Equipment:

     Property and equipment is summarized as follows:
                                                                1996
                                                             as adjusted
                                                  1997         (Note N)
                                              -----------    -----------
          Sawmill - Brazil                    $ 2,600,000    $ 2,600,000
          Office furniture and equipment           18,085              -
                                              -----------    -----------

                                                2,618,085      2,600,000

          Less accumulated depreciation          (131,809)       (65,000)
                                              -----------    -----------

          Property and equipment, net         $ 2,486,276    $ 2,535,000
                                              ===========    ===========


E.   Investment in Timber Producing Property:

     In January 1995 the Company  entered into an agreement with Ralph Financial
     Corporation  (RFC) to  purchase  the rights to 400,000  hectares  of timber
     producing  property in Brazil.  In consideration for the asset acquired the
     Company  issued  12,000,000  shares of its Series C  preferred  stock.  The
     preferred stock is convertible into common stock with the conversion factor
     being one share of common for each 2.4 shares of preferred. In addition the
     Company issued 2,000,000 shares of its common stock, valued at $600,000, as
     a finders fee associated with the acquisition of the assets.

     The  value  of the  assets  acquired  was  based  upon an  appraisal  by an
     independent  third party.  The value of these assets was  determined  to be
     $12,000,000.

                                       F-9
<PAGE>
                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

E.   Investment in Timber Producing Property: (continued)

     During  November 1995 it came to the attention of management that there may
     be a problem with  ownership of the property that was to be  transferred to
     the  Company.  The Company  placed RFC on notice to perform the transfer of
     assets by  December  15, 1995 or the  agreement  would be  rescinded.  As a
     result of  nonperformance  by RFC,  the Board of  Directors  of the Company
     approved a  rescission  of the  transaction  on  December  17, 1995 and all
     parties were placed on notice of the rescission.  As part of the rescission
     the Company is pursuing  legal action to recover all  12,000,000  shares of
     the Company's  Series C preferred stock and 425,000 shares of the Company's
     common  stock  that  were  issued  as  part  of the  original  transaction.
     Subsequent to year end the Company has  recovered  some of the stock and is
     still pursuing legal action to recover the remaining  stock. As a result of
     this  rescission  the Company has  adjusted  the full value of the acquired
     asset and reversed the preferred stock issuance during the year ended March
     31, 1996.

     In  July  1994  the  Company   entered  into  an   agreement   with  Ramiro
     Fernandez-Moris  and his family to acquire a series of assets  held by them
     in a family owned  corporation.  These assets  consist of 478,000  acres of
     timber  producing  property in Brazil  that are owned in fee in Brazil,  as
     well as  substantial  acreage  in  Bolivia  and Peru  that  are  long  term
     concessions.  In exchange  for these assets the Company  issued  10,000,000
     shares of its Series B  preferred  stock.  The  preferred  stock  issued is
     convertible  into a maximum of 15,000,000  shares of the  Company's  common
     stock to be adjusted by any stock splits and subject to the  production  of
     earnings of $2,000,000  annually from the assets acquired.  During the year
     ended March 31, 1996 the preferred stock was converted to 13,500,000 shares
     of the Company's common stock.

     In addition to the timberland  acquired,  the Company also acquired as part
     of the agreement a working  sawmill  located in Brazil that is in operation
     and existing  inventory  of banac and cedar with a value of  $630,000.  The
     value of the assets acquired were based upon an appraisal by an independent
     third  party.  The  original  value of these  assets was  determined  to be
     $30,200,000.  In addition the Company  issued  500,000 shares of its Series
     Class B preferred  stock,  valued at $500,000,  as a finders fee associated
     with the acquisition of the assets.

     In 1994 pursuant to the approval of the bankruptcy plan of  reorganization,
     the Company entered into an agreement with  Importaciones Y  Exportaciones,
     Sociedad   Anomia   ("IMEXSA"),   a  Nicaragua   corporation,   to  acquire
     approximately  400,000  Hectares  (a Hectare  equals  2.47 Acres) of virgin
     timber property located in Nicaragua.

     The  Company  originally  issued  a  convertible  note  to  IMEXSA  for the
     acquisition of the 400,000  Hectares in the amount of $5,000,000.  This was
     based  upon the  estimated  value of the land  acquired  at the time of the
     agreement.  IMEXSA  subsequently  exercised the  conversion  option and was
     issued  3,400,000  (post  split)  shares of the  Company's  common stock in
     exchange for the original note.

                                      F-10
<PAGE>
                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

E.   Investment in Timber Producing Property: (continued)

     Subsequent to the original  agreement,  the land acquired was determined to
     have a much greater value than the original  estimate.  The estimated value
     was based upon a study made of the property by an  authority in  Nicaragua.
     Based upon information received from the study performed, the trading value
     of the  Company's  common  stock,  which  began  May  12,  1994,  and  with
     consideration  given to the vast amount of timber  located on the property,
     management  made the decision to value the  property at a midpoint  between
     the original  $5,000,000  agreed upon  purchase  price and the  $20,400,000
     value of the  Company's  common  stock  issued for the  acquisition  of the
     property. Management believes the value of $12,000,000 for the property was
     fairly stated based upon the fair value of common stock issued.

     In addition to the 3,400,000  (post split)  shares of the Company's  common
     stock issued for the  acquisition of the property,  the Company also issued
     323,333 (post split) shares of the Company's common stock to three entities
     as fees associated with the acquisition of the property. The value of these
     shares was  determined  to be $1.00 per share.  As a result,  the Company's
     investment in the land acquired is $12,970,000.

     During the fiscal year  ending  March 31,  1995 the  Nicaraguan  government
     chose to withdraw the extraction rights for all of the 400,000 Hectares the
     Company  owns.  As a result of this  governmental  action  the value of the
     property owned by the Company has been  significantly  reduced.  Due to the
     uncertainties  with the  Nicaraguan  government  the  determination  of the
     remaining  value of the  property  is  uncertain.  Management  has made the
     decision  to write off the full value of the  Nicaraguan  asset  during its
     fiscal year ending March 31, 1995.  As part of this write off  1,666,667 of
     the original  3,400,000  (post split) shares issued have been recovered and
     cancelled.

F.   Other Investment:

     In April 1995 the Company entered into an agreement with Mandarin  Overseas
     Investment Co., Ltd.,  (Mandarin) a company  incorporated under the laws of
     the Turks and Caicos  Islands to acquire 98% of the  outstanding  shares of
     Asseradora Itaya (Itaya),  a subsidiary of Mandarin.  Mandarin is the owner
     of timber  concessions  in Peru  consisting  of 30,000  hectares  of timber
     producing properties. The concession is for ten (10) years with a renewable
     option for an additional  ten (10) years,  and a further option to turn the
     concession into fee ownership for a minimal cost. The extraction rights are
     approximately 270,000 cubic meters annually.

     Pursuant to the  purchase  agreement  the Company and  Mandarin  agreed the
     purchase  price shall be  $1,500,000.  During the year ended March 31, 1996
     the Company  issued  5,070,000  shares of its common  stock with a value of
     $1,064,250  as  part  of this  transaction.  In  addition  the  Company  is
     negotiating  with  Mandarin the  additional  number of common shares with a
     value of $423,750 to be issued as final  payment of this  transaction.  The
     $423,750  is  reflected  in the  financial  statements  of the Company as a
     liability.


                                      F-11
<PAGE>


                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

G.   Miscellaneous:

     Miscellaneous assets at March 31, 1997 and 1996 consist of the following:

                                                  1997           1996
                                              -----------    -----------

          Receivables - other                 $    31,882       $      -
          Down payment on timber property          15,000              -
                                              -----------    -----------

                                              $    46,882       $      -
                                              ===========    ===========


H.   Notes Payable - Related Party:

     Notes payable - related party are summarized as follows:

                                                          1997       1996  
                                                        --------    ------- 
                                                                              
        Notes     payable     to    Mr.     Ramiro                            
        Fernandez-Moris, President of the Company,                           
        and Mr.  Daniel Lezak,  former  President,                           
        respectively.  All notes bear  interest at                            
        prime plus 1%.  Principal and interest for      $192,500    $445,796 
        all notes is due and payable on                                       
        demand or within one year.                    

                 Less current portion                    192,500     445,796 
                                                        --------    -------- 
                                                                               
                                                        $      -    $      -  
                                                        ========    ========
                                                                                
                                                                                
I.   Income Taxes:

     The Company's total deferred tax asset as of March 31, 1997 is as follows:

          Deferred tax assets:
          Net operating loss carryforwards              $ 1,200,000

          Valuation allowance                            (1,200,000)
                                                        -----------
         
          Net deferred tax asset                        $         -
                                                        ===========



                                      F-12
<PAGE>


                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


I.   Income Taxes: (continued)

     As of March 31, 1997,  the Company had net  operating  loss  carryforwards,
     before any limitations, which expire as follows:

                            Year Ending     
                              March 31,          Federal
                            -----------        ----------
                                2010           $1,654,000
                                2011            1,680,000
                                2012              100,000
                                               ----------                     
                                               $3,434,000

     Pursuant to the Internal Revenue Code Section 382, use of the Company's net
     operating  loss will be limited due to a cumulative  change in ownership of
     more than 50%.

J.   Stockholders' Equity:

     Preferred Stock

     During the twelve months ended March 31, 1997 the Company issued  1,000,000
     shares of convertible  Series D preferred stock to Ramiro  Fernandez-Moris,
     President of the Company in exchange  for  $2,400,000  of timber  inventory
     owned by Mr.  Fernandez-Moris  which is located in Brazil.  The  conversion
     feature of the preferred stock floats such that at the time of conversion a
     calculation  will be  performed  to  determine  the exact  number of common
     shares that are necessary to be issued to Ramiro  Fernandez-Moris to ensure
     he has at least a 51%  ownership  interest in the Company.  The  conversion
     period is for five years and can only be completed if any of the  following
     events occur:  sale of the Company,  retirement of Ramiro  Fernandez-Moris,
     the termination of Ramiro  Fernandez-Moris  without cause or the expiration
     of the five year period.

     Authorized  preferred  stock at March 31, 1997 also consists of Series A, B
     and C  preferred  stock  which have  various  conversion  features  for the
     exchange of common stock for each share of preferred stock. As of March 31,
     1997,  all  outstanding  Series  A,  B  and C  preferred  shares  had  been
     converted.

     Common Stock

     During the twelve  months ended March 31, 1997 and 1996 the Company  issued
     10,650,100 and 9,393,500 shares of common stock, respectively,  in exchange
     for consulting and other services provided.

     In August 1994 the Company approved a 3 to 1 reverse split of the Company's
     common stock as of August 11, 1994. The effects of the reverse split was to


                                      F-13
<PAGE>


                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


J.   Stockholders' Equity: (continued)

     convert  three  (3)  shares of  common  stock  into one (1) share of common
     stock.

     The number of shares outstanding of common stock may require a non-material
     adjustment in subsequent periods due to the possible share adjustments from
     the rescinded  transactions (Note E) and the results of the lawsuit that is
     to be filed to recover these shares.

     Common Stock Class A and Class B Warrants

     The Company has Class A Warrants with an exercise price  established by the
     Board of  Directors  of $3.50 per share.  The Class A Warrants  entitle the
     holder to purchase  one share of common  stock and at the time of exercise,
     to receive  one Class B Warrant.  Class B  Warrants  entitle  the holder to
     purchase one share of the  Company's  common stock at an exercise  price of
     $5.00 per share.  The  Company has the right to reduce the  exercise  price
     and/or extend the term of the Class A and Class B Warrants.

     At March 31, 1997 there were 20,029,966 Class A Warrants outstanding.

K.   Supplemental Cash Flow Information:

     Supplemental disclosures of cash flow information for the years ended March
     31, 1997, and 1996 are summarized as follows:

                                                           1997         1996  
                                                        ----------   ----------
                                                                              
         Cash paid for interest                         $   48,578   $   40,998
                                                        ==========   ==========
                                                                               
         Noncash investing and financing activities:                         
               Related party debt reduced with stock      
                 issuance                               $  159,740   $        -
               Investment acquired with stock issuance           -    1,500,000
               Common stock issued for services            653,190      751,480
               Preferred stock (Series D) issued for        
                 inventory                               2,400,000            - 
               Common stock issued for investment                -    1,064,250 
                                                         
L.   Commitments and Contingencies:                      

     Operating Leases

     The Company leases office facilities under operating leases which expire in
     June 2000. The accompanying  statement of operations includes expenses from


                                      F-14

<PAGE>


                   MADERA INTERNATIONAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)


L.   Commitments and Contingencies: (continued)

     operating  leases of $12,079 for 1997.  Future  minimum lease  payments due
     under noncancelable operating leases as of March 31, 1997 are as follows:

                 1998                 $10,598
                 1999                  22,534
                 2000                  11,167
           Thereafter                       -
                                      -------
                                      $44,299

     Litigation

     During the year ended March 31,  1996 the  Company  was a defendant  in two
     legal  proceedings.  Both cases resulted in a judgement against the Company
     in the amounts of $158,834 and $100,000.  The Company paid $145,000  during
     the year ended  March 31,  1997 and the  remaining  balance of  $113,834 is
     reflected in accounts payable.


M.   Prior Period Adjustment:

     During the fiscal year ended March 31, 1997,  that part of the  "investment
     in timber producing property" (Note E) attributable to the physical sawmill
     facility  was  reclassed to property and  equipment.  Accordingly,  a prior
     period adjustment has been recorded to reflect  depreciation expense in the
     fiscal year ended  March 31, 1996 in the amount of $65,000.  Due to the net
     loss from operations in the prior period,  there is no income tax effect of
     this adjustment.

N.   Subsequent Event:

     Subsequent  to year end, the Company  entered  into an  agreement  with its
     President to purchase from him an additional  251,000 acres of  timberland.
     The purchase is to be recorded at original cost and will be completed  upon
     the  receipt  of  appropriate  documentation  that  demonstrates  ownership
     transferred  to the Company.  This agreement is expected to be completed in
     the second quarter of the 1998 fiscal year. This  additional  timberland is
     destined for environmental  programs that are being established through the
     Company's wholly-owned subsidiary, Madera International Environmental, Inc.


                                      F-15

<PAGE>


               CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the  inclusion  in this  Annual  Report  Form 10-KSB of our report
dated June 2, 1997, on our audits of the consolidated  financial  statements and
schedules of Madera International, Inc. and Subsidiaries (The "Company").


Harlan & Boettger, LLP

San Diego, California
June 2, 1997


































                                      F-16
<PAGE>


                                   SIGNATURES

In  accordance  with  Section 12 of the  Securities  Exchange  Act of 1934,  the
registrant caused this registration  statement to be signed on its behalf by the
undersigned, thereunto duly authorized.

                             MADERA INTERNATIONAL, INC.

Dated:    June 10, 1997

                           By: /s/ Ramiro Fernandez-Moris
                               -----------------------------------------------
                               Ramiro Fernandez-Moris, Chief Executive Officer

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.

       Signature                          Title                        Date 
       ---------                          -----                        ----

/s/ Ramiro Fernandez-Moris    President, Chief Executive Officer   June 16, 1997
--------------------------    (Principal Executive Officer,                 
Ramiro Fernandez-Moris        and Principal Financial
                              Officer) Director, and Chairman
                              of the Board
                              


/s/ Roman Fernandez-Moris     Vice President and Director          June 16, 1997
--------------------------                                         
Roman Fernandez-Moris




/s/ Arthur Mintz              Director                             June 16, 1997
--------------------------
Arthur Mintz







                                       17