SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB/A

                                   (Mark One)

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
    1934 For the fiscal year ended December 31, 2000.

                                       OR

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
    OF 1934 For the transition period from _____________ to ____________.


                        COMMISSION FILE NUMBER 333-33134

                              SAVE ON ENERGY, INC.
                 (Name of Small Business Issuer in Its Charter)

                 Georgia                                 58-2267238
      (State or Other Jurisdiction of                 (I.R.S. Employer
      Incorporation or Organization)                 Identification No.)

            4851 Georgia Highway 85
                  Suite 211
             Forest Park,Georgia                           30050
    (Address of Principal Executive Offices)             (Zip Code)

                                 (404) 765-0131
                (Issuer's Telephone Number, Including Area Code)

         SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT:

                                           Name of Each Exchange
             Title of Each Class            on Which Registered
               -----------------           ---------------------
                     None                          None

         SECURITIES REGISTERED UNDER SECTION 12(G) OF THE EXCHANGE ACT:
                                      NONE

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act  during the  preceding  12 months (or for such
shorter period that the Company was required to file such reports),  and (2) has
been subject to such filing requirements for the past 90 days. Yes [ ] No [X]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form,  and if no disclosure  will be contained,
to the best of the  Company's  knowledge,  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]
<PAGE>

Revenues for the fiscal year ended December 31, 1999 totaled $560,124 and for
fiscal year ended December 31, 2000 totaled $288,874.

As of December 29, 2000, the aggregate market value of the voting stock held by
non-affiliates of the registrant (based upon the average of the closing bid and
asked prices on such date) was approximately $0.52.

As of February 2, 2001, the registrant had outstanding 3,589,200 shares of
common stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

        No documents are incorporated by reference into this Amendment to the
Annual Report on Form 10-KSB.


                                EXPLANATORY NOTE

This Form 10-KSB/A is being filed solely to include the information set forth in
Part III of this Report, which was omitted from the original Form 10-KSB in
accordance with applicable rules and regulations. The information contained in
Parts I, II and IV of this Report has been included from the original Form
10-KSB filing and has not been updated to reflect events since the date of such
filing.


                           TABLE OF CONTENTS

                                                                            Page
                                     PART I                               Number

ITEM 1. Business...........................................................    1
ITEM 2. Properties ........................................................   19
ITEM 3. Legal Proceedings..................................................   19
ITEM 4. Submission of Matters to a Vote of Security Holders ...............   19

                           PART II
ITEM 5. Market for the Company's Common Stock and Related Stockholder
        Matters ...........................................................   20
ITEM 6. Management's Discussion and Analysis of Financial Condition .......   22
ITEM 7. Financial Statements ..............................................   32
ITEM 8. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure ..............................................   32

                                    PART III
ITEM  9.Directors and Executive Officers of the Registrant ................   32
ITEM 10.Executive Compensation ............................................   33
ITEM 11.Security Ownership of Certain Beneficial Owners and Management.....   34
ITEM 12.Certain Relationships and Related Transactions ....................   34

                                     PART IV
ITEM 13.Exhibits, Financial Statement Schedules, and Reports on Form 8-K ..   36
-------------------------



<PAGE>

                                     PART I

                   SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

This Form 10-KSB contains forward-looking statements that involve risks and
uncertainties, including market acceptance risks, technological development
risks and other risk factors identified below under "Management's Discussion and
Analysis - Risk Factors". More specifically, within Item 1. Description of
Business there are a number of forward-looking statements contained within the
sections regarding Products and Services, Competition and the Regulatory
Environment

ITEM 1.  DESCRIPTION OF BUSINESS

        Overview

Save On Energy, Inc. (OTC - Pink Sheets: "SOEI") formerly known as Electronic
Fuel Control, Inc. (referred to hereinafter as "Save" or the "Company" or, as
the context requires ""we", "us", our") was incorporated in the State of Georgia
in 1996. We manufacture and market retrofit conversion system kits to permit
diesel engines to run on a mixture of diesel fuel and non-petroleum based fuels
such as compressed natural gas and liquefied natural gas. This combination fuel
feature is referred to as a "dual fuel" system. Given certain phased-in domestic
regulatory requirements at the national, state and local levels associated with
a reduction in air pollution, certain tax credits and related economic
incentives for those utilizing alternative fuels, and the generally lower costs
of alternative fuels domestically as well as internationally, there is a growing
demand for solutions such as those provided by our kits.

We believe our patented dual fuel technology is among the most cost-effective
solutions available for reducing hydrocarbon particulate matter and nitrogen
oxides (NOx) from existing diesel engines, one of the major sources of air
pollution. The flexible system design has been successfully configured to fit
most diesel engine classes (vehicular and stationary generators) with only minor
modification and with relatively minor expense. While we currently only sell
kits which apply to diesel engines relying on mechanical diesel fuel pumps (our
"Mechanical System Technology"), we are currently in the later stage of
development of kits which apply to diesel engines relying on electronically
controlled diesel fuel pumps (our "Electronic System Technology"). In addition
to these vehicular applications, we intend to further expand our product line to
include stationary engine conversion systems (our "Stationary System Technology
Initiative").

During the past six years, we have outfitted approximately 1,000 dual fuel
conversion systems into vehicles throughout the U.S. and in several foreign
markets, representing approximately 0.007% of the total number of vehicles
worldwide qualified to benefit from such a system. There are approximately 14
million medium and heavy-duty diesel vehicles in operation worldwide. During
this initial business phase, we invested principally in research and
development, prototype development, and beta testing for the first generation of
our Mechanical System Technology. The Mechanical System Technology was refined
during this period for adaptation to various medium- and heavy-duty vehicles,
and its performance record established through extensive testing and
demonstrations. More recently, and increasingly, we have invested heavily in the
development of our Electronic System Technology.

Based on the fact that there are currently over 4.5 million diesel powered
vehicles in the United States, as well as approximately 10 million more outside
of the U.S., and the additional fact that we expect to charge approximately
$5,000 per unit for our systems (excluding costs associated with fuel tanks and
fittings), the market potential for our business based strictly on our vehicular
applications exceeds $72 billion, although we believe that it is extraordinarily
unlikely that the entire potential market, or even a large part of it, will ever
become equipped with ours or a similar technology. We are one of only several
companies throughout the world engaged in this business and, to our knowledge,
we are the only one which currently offers a computer controlled closed-loop
system technology that can be utilized on any diesel engine not having a
precombustion chamber (4-stroke engines). We believe this feature not only
distinguishes us but also provides us with a strong strategic advantage in the
marketplace. On average, our gross profit margin on the sale of kits in the past
has been approximately 50%.


Our primary marketing focus is the diesel truck and bus fleet market segments,
both domestically as well as internationally. Within these segments, new engines
or entire vehicles which operate on natural gas only, known as

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dedicated fuel systems or vehicles, generally cost at least $50,000 more than
their diesel-only counterparts. There are currently no original equipment
manufacturers ("OEM's") producing trucks or buses equipped with dual fuel
systems such as ours. Currently, fleet managers are in a position, using our
Mechanical System Technology, to convert approximately nine to ten existing
mechanical diesel engines for the same cost as would otherwise be necessary to
purchase only one new natural gas engine. Once the first Save Electronic System
Technology is commercially available which we believe will occur in Y2001, fleet
managers will be able, using our product, to convert approximately eight to nine
existing electronic diesel engines for the same cost as would otherwise be
necessary to purchase only one new natural gas engine.

Although our dual fuel technology is applicable to diesel engines, we also sell
conversion kits that convert gasoline fuel engines to bi-fuel engines. We are
currently focusing our sales initiatives entirely on the diesel-powered vehicle
market, which we believe has a greater revenue potential per customer.

Subject to the availability of required financing, which cannot be assured, we
are now entering a full commercialization phase with respect to our Mechanical
System Technology. This is a major growth step for us and will require
completion of computer digitization (which will make it more difficult to
reverse engineer our technology), emissions certification (for the U.S. market),
expansion of building and facilities, addition of key personnel, and augmented
sales and marketing activities. We also intend to continue to invest heavily in
our prototype development and demonstration initiatives.

        Background

The improvement of air quality is a global problem. To varying degrees, nations
throughout the world, and cities throughout those nations, all suffer from the
health hazards imposed by air pollution. Certain cities outside the U.S.,
including for example Mexico City, Cairo and Bangkok, and particularly those in
developing nations, are among those where the levels of hydrocarbon particulate
matter are dangerously high. In the United States, the problem is less severe in
most places, but still very much of an issue, especially in cities such as Los
Angeles. The problem is one which began for all practical purposes with the
industrial revolution a hundred years ago, and, until relatively recently,
became increasingly worse over time.

A significant contributor to air pollution in all parts of the world are the
emissions from automobiles, trucks and buses. The US Environmental Protection
Agency (EPA) notes that the harmful emissions from the lifetime operation of one
diesel truck or bus equals that of 100 gasoline automobiles.

A diesel engine looks and works very much like a gasoline engine. However,
unlike a gas engine, diesel engines have no spark plugs because they rely on
diesel fuel, which has a very low flash point. This means that it self-ignites
at a low pressure/temperature condition. Within the diesel engine, when the
piston is at the top of the cylinder (at the conclusion of the compression
stroke) and the mixture of fuel and air within the cylinder is at the maximum
pressure, the air has been heated by being compressed, and the diesel fuel
vapors spontaneously combust. With no spark (and no distributor) needed to
ignite the fuel, diesel engines are much simpler and more reliable than gasoline
engines. In addition, diesel fuel contains unrefined hydrocarbons that act as a
lubricant to internal engine components while the engine is running. This
contributes to a significantly longer engine life than can be expected from
other fuels.

The primary disadvantage of a diesel engine is that it emits far more pollutants
than its gasoline-fueled counterpart. Diesel exhaust contains particulate
matter, visible as soot that contains unburned and partially burned fuel. These
hydrocarbon emissions are a significant contributor to air pollution and to
human respiratory system difficulties. This is particularly true when
hydrocarbons become suspended in the atmosphere or when they come to exist in
great quantity in the air at a particular location, such as major metropolitan
areas. Also of significance is the fact that diesel fuel combustion produces
Nitrogen Oxides (NOx), a toxin that is universally acknowledged as harmful to
humans and the environment. NOx is a major known contributor to greenhouse gas
formation resulting in global warming

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<PAGE>

 .

        Significant Environmental Legislation

It was not until 1970, with the passage by the U.S. Congress of The Clean Air
Act, that any significant steps were taken anywhere in the world to improve air
quality. The Clean Air Act was a very broad legislative initiative with very
far-reaching mandates designed to clean the air throughout the U.S. Since then,
many additional national, state, and municipal legislative and related
initiatives have been adopted to further the interests of protecting and
restoring the quality of the environment. In addition, the United Nations has a
long-standing program to improve the air quality worldwide. The program is
administered through the United Nation's Economic and Social Development
Division. Although the United Nations does not provide direct funding, it does
work extensively to facilitate the flow of technical information into member
nations that have a need to address local or regional pollution problems.

The Clean Air Act was amended in 1990 (the "1990 Amendments") to, among other
things, create several initiatives to reduce vehicle pollutants. These laws set
emissions standards for stationary and mobile pollutant sources and establish
targets, standards and procedures for reducing human and environmental exposure
to a range of pollutants generated by industry in general and transportation in
particular. Among other mandates, the 1990 Amendments require businesses that
maintain centrally fueled fleets of 10 or more vehicles in certain heavy smog
locations to convert, either through new vehicle purchases or by converting
existing vehicles, a portion of their fleet to clean burning alternative fuels.
These laws specifically include the diesel and natural gas dual fuel system as
an alternative fuel and specify actions that fleet operators must take in order
to comply and timetables for doing so.

The Energy Policy Act of 1992 (the "Energy Act") was created to accelerate the
use of alternative fuels in the transportation sector. With this law in place,
the primary goal of the Department of Energy became to decrease U.S. dependence
on foreign oil and increase U.S. energy security through the use of domestically
produced alternative fuels. The Energy Act mandates the schedule by which
Federal, state and municipal vehicle fleets must incorporate alternative fueled
vehicles into their overall vehicle mix. This has significant ramifications for
the military, which operates thousands of diesel vehicles, and for the state
departments of transportation, which operate tens of thousands of diesel powered
dump trucks and related highway service and repair vehicles, plus the tens of
thousands of vehicles operated by the private contractors who support these
agencies.

        Environmental Incentive Programs

In addition to the foregoing, a variety of legislative and related incentive
programs relating to alternative fuel vehicle programs have been created,
including:

     o    Clean Cities Program. Created by the Department of Energy, the Clean
          Cities Program coordinates voluntary efforts between locally based
          government and industry to accelerate the use of alternative fuels and
          expand the alternative fuel vehicle refueling infrastructure. Grants
          are available for natural gas fueling stations and vehicle conversions
          to natural gas. Typical grants offset the cost of conversion by as
          much as 80%.

     o    Alternative Fuel Vehicle Credits Program. Congress created this
          credits program to encourage fleets to increase the number of
          alternative fuel vehicles in their fleets early and aggressively.
          Credits are allocated to state fleet operators and cover alternative
          fuel provider fleet operators when alternative fuel vehicles are
          acquired over and above the amount required, or earlier than expected.
          Since credits can be traded and sold, fleets have the flexibility to
          acquire alternative fuel vehicles on the most cost-effective schedule.

     o    State Energy Program. States will promote the conservation of energy,
          reduce the rate of growth of energy consumption, and reduce dependence
          on imported oil through the development and implementation of a
          comprehensive State Energy Program. The State Energy Program is the
          result of the consolidation of two Federal formula-based grant
          programs - the State Energy Conservation Program and the Institutional
          Conservation Program. The State Energy Program includes provisions for
          financial assistance for a number of state-oriented special project
          activities. These activities specifically include programs to
          accelerate the use of alternative transportation fuels for government
          vehicles, fleet vehicles, taxis, mass transit, and individuals'
          privately owned vehicles.

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<PAGE>

     o    Global Initiatives. In addition to the many Federal and State
          programs, the United Nations has a long-standing program to improve
          the air quality worldwide. The program is administered through the
          United Nation's Economic and Social Development Division. The United
          Nations does not provide funding, but they do work extensively to
          facilitate the flow of technical information into member nations that
          have need to address local or regional pollution problems.

Even though the base legislation has now been in force for nearly 10 years, and
the conversion requirements are clearly set, particularly for state, municipal
and federal vehicle fleets, estimates place the number of natural gas powered
medium and heavy duty vehicles in service in the U.S. at less than 50,000. This
compares disproportionately to the more than 1 million natural gas or dual fuel
vehicles in service outside the U.S. We believe that the primary reasons for
this are as follows:

     o    Few Fueling Stations. US natural gas companies and public fueling
          station owners are reluctant to install fueling stations against a
          market with a limited vehicle count. Recent estimates from the Natural
          Gas Vehicle Coalition indicate that there are about 1,200 compressed
          natural gas vehicle refueling stations in the U.S., far less than the
          number of gasoline/diesel stations. Despite this, suppliers of
          compressed natural gas and liquefied natural gas have developed on a
          limited basis trailer-mounted fueling stations to provide an option
          for fleet vehicle fueling without the expense associated with a fixed
          installation.

     o    Large Existing Inventory of Diesel Powered Vehicles. One of the main
          advantages of diesel engines is their long life. With millions of
          operationally sound medium and heavy-duty diesel vehicles in service
          internationally (approximately 14 million), private sector fleet
          operators have little incentive to discard them and replace them with
          dedicated alternative fuel vehicles. In countries having attractive
          grant programs, vehicles are more likely to be converted. Where diesel
          fuel is more expensive than natural gas, fleet operators are willing
          to convert without grant support. This assumes fueling is already
          available.

     o    High Cost of Dedicated Engine Conversions and New Vehicles. Regardless
          of whether the gas is liquefied or compressed, to convert an existing
          diesel engine to run exclusively on natural gas (thereby converting it
          to a dedicated alternative fuel vehicle), requires that an electronic
          ignition system be installed in the vehicle. This requires new
          cylinder heads, spark plug electronics, and much more. The end result
          is a conversion cost for a typical heavy-duty truck in excess of
          $50,000. Similarly, the cost of a new vehicle equipped with a full
          time natural gas engine is as much as $50,000 more than the same
          vehicle with its standard diesel engine.

     o    Non-Availability of Duel-Fuel Systems. No engine or vehicle OEM's are
          currently producing either mechanical or electronic duel fuel systems
          that feature the ability to activate or deactivate, as desired, the
          alternative fuel option. This functionality feature is very valuable
          to many users particularly those in non-U.S. markets.

        Our Products

                Generally

We manufacture and market retrofit conversion system kits to permit diesel
engines to operate on a mixture of diesel fuel and non-petroleum based fuels
such as compressed natural gas and liquefied natural gas. This combination fuel
feature is referred to as a "dual fuel" system. The ability of the engine to run
in either the dual fuel mode or diesel mode is unique. Different engine load
conditions, such as driving uphill/downhill and full/empty, require different
gas/diesel mixtures for optimum vehicle performance. Our patented system
constantly measures a number of engine operating parameters and uses a
proprietary electronic fuel control unit to continuously adjust the percentage
of natural gas in the fuel mixture. Our system is applied to medium and
heavy-duty diesel engine vehicles via after market conversion enabling the use
of up to 80% natural gas (liquefied or compressed) as the primary fuel while
retaining the remaining percentage of diesel fuel for the pilot ignition of
natural gas.

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<PAGE>

We believe our patented dual fuel technology is among the most cost-effective
solutions available for reducing hydrocarbon particulate matter and nitrogen
oxides (NOx) from existing diesel engines, one of the major sources of air
pollution. Our dual fuel system reduces NOx emissions from the converted engine
by more than 50%. Additionally, there is almost complete elimination of
particulate hydrocarbon emissions. Independent tests have repeatedly
demonstrated this reduction in harmful emissions as a result of conversion to
our system.

Our flexible conversion system design has been successfully configured to fit
most diesel engine classes (vehicular & stationary generators) with only minor
modification and with relatively minor expense. While we currently only sell
kits which apply to diesel engines relying on mechanical diesel fuel pumps (our
"Mechanical System Technology"), we are currently well underway with prototype
demonstrations aimed at selling kits which apply to diesel engines relying on
electronically controlled diesel fuel pumps (our "Electronic System
Technology"). In addition to these vehicular applications, we intend to further
expand our product line to include stationary engine conversion systems (our
"Stationary System Technology Initiative").

                Our Mechanical System Technology

Our current conversion system, based on our Mechanical System Technology, is
applicable to older diesel engines, which have mechanical diesel fuel pumps. We
believe there is great potential in the U.S. for sales of this system, which, to
date, has not been officially emission certified. Once California Air Resources
Board (CARB) emissions verification testing is completed for several engine
categories, we expect sales to increase in the U.S. market beginning in
California and rapidly extending to other areas. We have submitted application
for two emission verification programs in Y2001 and intend on pursuing three
additional in Y2002, and at least one more in Y2003.

We believe further that the larger economic opportunity for our Mechanical
System Technology exists in developing nations having older diesel vehicles, no
emissions certification requirements, and the objective of reducing diesel fuel
consumption.

The current central processing unit ("CPU") in our Mechanical System Technology
is an analog computer. Once the CPU is digitized, it will be extremely difficult
for the computer to be reverse-engineered, and we are therefore waiting until
this occurs before we begin pursuing and developing markets in certain countries
which we see as holding significant conversion potential, but which to date we
have not pursued due to concerns about patent infringement. We intend to take
every precaution to guard against potential patent infringement and any expenses
associated with having to pursue our rights in connection therewith.

The final variation for our Mechanical System Technology is completing
development of a special valve that will allow the conversion for certain large
horsepower engines. This is specifically for the very large heavy-duty vehicle
market that includes on and off-road equipment.

                Our Electronic System Technology

Currently, and increasingly, many diesel engines are being equipped with
integrated electronically controlled diesel fuel pumps. Compared to their
mechanical system counterparts, these offer improved emission control, though
not to a degree sufficient to meet the more stringent air quality regulations in
certain parts of the U.S. We expect to be able to provide conversion kits
specially suited for such electronic engines on a limited basis in Y2001.

Several diesel engine manufacturers are now producing natural gas engines as an
alternative to diesel engines. There has been a reluctance on the part of fleet
managers to utilize dedicated natural gas engines based on their concerns that
the such vehicles will be out of commission for servicing if any one of the
natural gas related components fails during operation. Part of their reluctance
also stems from their additional concern that, once a vehicle depletes its
natural gas supply while in operation, it will cease to operate and stop in its
tracks. With the Save dual fuel conversion technology, in either of the previous
situations, the vehicle can switch over to diesel only operation and not be out
of commission or stranded. Reluctance of fleets to move toward dedicated natural
gas engines has lead Save to increase our efforts in developing conversion
systems for electronic engines. Development time is reduced when engine OEM's
provide specific diesel control programming. Recently, one major engine
manufacturer has agreed to provide programming information that will help us
offer an additional commercially

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available system in Y2001. This is an engine manufacturer that produces diesel
and dedicated natural gas engines, but offers no dual fuel option.

Where dictated by strict emission laws, fleet managers have been forced in
certain cases to replace working electronic diesel engines with new dedicated
natural gas engines (since a dual fuel conversion system has been unavailable).
Once our Electronic System Technology is commercially available for the market,
fleet managers will be in a position, using our product, to convert
approximately 8 to 9 existing electronic diesel engines for the same cost as
would otherwise be necessary to purchase only one new natural gas engine.

                 Our Stationary System Technology Initiative

We receive inquiries regularly regarding conversion of stationary diesel
engines. The majority of these inquiries are from other countries, predominantly
developing nations. Proposed applications include "medium" horsepower engines
used for mechanical operations such as pumping, compression, and shaft power, as
well as both large and medium horsepower engines used for electricity generation
either in dedicated electrical production or emergency standby electrical
production. We believe our existing vehicle conversion technology can be adapted
so as to apply effectively to stationary engines, and we intend on pursuing this
market opportunity following successful electronic engine system
commercialization and meaningful market penetration in connection with the
vehicular markets.

The need for conversion of stationary engines in the U.S. largely arises out of
a need for the elimination of large underground diesel fuel storage tanks
replaced by much smaller above ground diesel fuel storage tanks. This is an
important issue regarding soil and groundwater pollution in the environment
(possible tank leakage). Conversion to dual fuel natural gas also improves air
quality environmental concerns. In the U.S. and other countries, the economic
incentive is diesel fuel cost savings by displacing more expensive diesel fuel
with less expensive natural gas. Conversion of stationary engines to dual fuel
natural gas is a very significant issue since stationary engine conversions
result in maximum displacement of diesel fuel - at least 90%, whereas with
vehicles operating at various loads and RPM's diesel fuel displacement may reach
as much as 80%. A higher percentage of natural gas consumption in stationary
engine applications is due to the engine operating at a continuous high RPM
rather than fluctuating between low and high RPM's in a vehicle driving cycle.

                 Primary Components

Our dual fuel system has three primary components:

The Controller. This electronic unit is the brain of our system. From sensors
that monitor key parameters of engine performance, such as speed and
temperature, and what it is being asked to do, such as throttle position and
fuel demand, the controller determines how much natural gas to place into the
air intake stream. Ordinarily, the controller places the least amount of gas
into the engine while at idle engine speed and without load. At this resting
state, a typical dual-fuel engine would be running on 80% diesel and 20% natural
gas. Conversely, the greatest amount of gas is inserted while the vehicle is
accelerating and/or operating at maximum load and torque. In this state, an
engine ordinarily would be consuming a mixture of 20% diesel and 80% natural
gas. Evidence obtained as a result of hundreds of installations indicates that a
typical engine, following conversion to our dual fuel system, will normally
average an overall mixture of 70% natural gas and 30% diesel.

The Gas Air Mixing Device. The natural gas vapor must be administered into the
air fuel flow in a manner that permits thorough mixing. To accomplish this, we
rely on our patents on three different and unique devices that are placed into
an engine air intake system. This device, called the gas air mixing device,
together with the fuel flow regulator and hoses, combine to constitute the
second major component of our dual fuel system.

The Measuring, Monitoring and Reporting Devices and Their Connections. To
optimize engine and vehicle performance, the controller needs to know the
current status of a number of engine operating parameters ranging from throttle
position to exhaust temperature. The sensors and wiring that gather and report
this information to the controller make this the third component of our dual
fuel system.

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                Application:  Engine Types

There are essentially three different, but closely related, types of diesel
engines to which are product applies.

                  o        Mechanical Engines/Normally Aspirated
                  o        Mechanical Engines/Turbocharged
                  o        Electronic Engines/Turbocharged

Many of the differences between and among these types are in how the fuel/air
mixing operation is performed. The principal commonality is that each of these
diesel engines is sparkless, using the increased temperature of the compressed
air (a self combustion property) to ignite the fuel.

         Mechanical Engines/Naturally Aspirated. Unlike gasoline engines that
         mix the fuel with the air outside the cylinder, diesel engines mix the
         fuel with the air inside the cylinder. In the majority of diesel
         engines, the fuel is directly injected into the cylinder. Because they
         are able to operate on a wider range of fuel quality than gasoline
         engines and because they could be built in much larger and more
         powerful configurations, diesel engines quickly adapted to many
         commercial applications.

         Mechanical Engines/Turbocharged. Turbocharged engines compress air
         delivered to the cylinders, providing more oxygen for combustion, which
         produces greater horsepower and torque from a smaller engine
         displacement than the normally aspirated type engine.

         Electronic Engines/Turbocharged. As a further extension of automobile
         engine technology to diesels, in 1993/94, engine manufacturers began
         producing turbocharged engines that use an electronically timed fuel
         injection system. In this type of engine, compressed air is forced into
         the cylinder and injection of the fuel into the engine cylinder is
         controlled more precisely than is possible using the mechanical system.
         Because the fuel injection process is more precisely timed and
         measured, electronic engines, also known as drive-by-wire engines, have
         lower emissions and better fuel economy than mechanical type diesel
         engines. The improved fuel efficiency and reduced emissions that
         resulted from the drive-by-wire engines is only a small step. These
         engines, like other diesel engines continue to emit substantial
         quantities of unburned fuel, particulate hydrocarbons and nitrous
         oxides that exceed the levels permitted under the guidelines of the
         Clean Air Act. The drive-by-wire engine electronically controls the
         fuel injector cycles as opposed to the mechanical control system that
         is used on both of the others mentioned above. The drive-by-wire engine
         type is the most economical and has the lowest emissions.

                Key Features of Our Dual Fuel Conversion Systems

                          Emissions Reduction

A serious disadvantage of a diesel engine is that it emits far more pollutants
than its gasoline-fueled counterpart. Diesel exhaust contains hydrocarbon
particulate matter, visible as soot and consisting of unburned and partially
burned fuel. Diesel fuel combustion also produces toxic Nitrogen Oxides ("NOx").
Our dual fuel system reduces NOx emissions from the converted engine by more
than 50%. Additionally, there is almost complete elimination of particulate
hydrocarbon emissions. Independent tests, including those performed by an EPA
laboratory, have repeatedly demonstrated this reduction in harmful emissions as
a result of conversion to our system.

                        Closed-Loop System

There are two types of dual fuel systems in use: open-loop and closed-loop. Our
dual fuel system is a closed-loop system. This means that the fuel flow
controller monitors engine operating parameters, and, based on the input it
receives, it adjusts the gas/air and diesel fuel mixtures as necessary to create
the optimum engine performance for the load at the time. Since it is a computer
controlled system, it makes continuous changes to the percentages of natural gas
and diesel entering the cylinder during the intake cycle. In an open-loop
system, as used by two of our competitors, the natural gas to diesel fuel
mixture is pre-set, usually to around 40% gas and 60% diesel. The engine

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receives this ratio at all times, without regard to engine speed or load.
Incomplete combustion is very common with this type of system, which causes an
overall increased fuel consumption, engine knocking, and reduced power
performance. Open-loop systems are the first generation of dual fuel conversion
systems. The predominant reason for use was to offset the amount of diesel fuel
consumption, not for purposes of improved emissions.

We believe that our closed-loop system provides better fuel economy than an
open-loop system, better vehicle performance under the variety of load
requirements engines face, a greater emissions reduction, particularly regarding
unburned fuel, hydrocarbon particulate and nitrous oxide, and reduced engine
maintenance costs.

                         Flexibility of Switching Between Dual Fuel And Full
                         Diesel Operation

The controller is programmed to automatically switch from dual fuel operation to
diesel when the natural gas fuel supply reaches a low level. As an option, the
alternative fuel system can be activated and deactivated immediately through a
manual switch operated by the driver that determines the fuel source.

Particularly at the international level, this is a very desirable feature of our
system. This is true because in many areas outside the U.S. the natural gas
fueling station infrastructure is not fully developed.

                        Compressed Natural Gas vs. Liquefied Natural Gas

Our dual fuel system performs with indifference to the two natural gas types:
compressed and liquified. In general, compressed and liquefied natural gas
differ only in their method of storage. Once they leave their storage vessels
and are presented for insertion into the engine's fuel flow, both are in a
gaseous state.

Currently, liquefied natural gas is generally the preferred form of fuel in
heavy-duty vehicles. In liquid form, the gas requires less space to hold and its
tanks put less weight onto the vehicle than does compressed natural gas. Because
the liquefied natural gas dealer brings the gas to the fleet site as frequently
as needed, there is no supply constraint. It is possible, though, that
compressed natural gas filling stations might proliferate making these more
easily accessible than is presently the case. Regardless, our dual fuel engine
does not discriminate between the two fuel types. The fleet's service
technicians can make whatever minor adjustments the controller may require for
optimum engine performance.

        Our Market

The market for our conversion system kits is divided among several categories,
each of which have different, albeit somewhat overlapping, economic motivations
for using the product.

Based upon our anticipated price points (average $5,000 per unit), and the total
number of vehicles that we estimate to be qualified to benefit from an
after-market vehicle conversion kit such as our own (approximately 4.5 million
in the U.S. and 9 million outside the U.S.), we estimate that the total
worldwide market potential for these types of products, excluding fuel tanks and
fittings (necessary collateral components), is approximately $72 billion. While
this is a developing market, and there can be no assurance that all or even a
significant percentage of this figure will actually ever be invested (over any
given period) in these types of products, given our knowledge and experience in
the market, we believe that, over time, a meaningful percentage of the total
market for such products (as we have defined it herein) will materialize. While
$72 billion represents an aggregate international market figure - as opposed to
an annual market figure - new heavy-duty diesel vehicles in the U.S. are
currently entering the market every year at a rate of approximately 262,000
units. There is no reason to believe that this introduction rate will not
continue into the foreseeable future.

                Domestic U.S.

According to US Department of Transportation, there are more than 150 million
licensed vehicles in the United States. Of these, 3% are diesel powered totaling
over 4.5 million medium and heavy-duty vehicles in the categories listed below:

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Transit Buses ...............     128,000
School Buses ................     585,000
Sanitation Trucks ...........      72,000
Dump Trucks .................     612,000
Wreckers ....................     163,000
Concrete Mixers .............      61,000
Interstate Freight Trucks ...   1,742,000
Local Freight Delivery Trucks      72,000
Retail Delivery Trucks ......   1,100,000
                                ---------
    Total                       4,535,000

Although there can be no assurance, various estimates place the number of
diesel-engine transportation and freight vehicles outside the U.S. at more than
10 million. Based on our knowledge of the market, which may or may not be
accurate, we believe that most of these vehicles are antiquated and highly
polluting. According to our own estimates, which also may or may not be
accurate, approximately 75,000 of these have been converted to or run on natural
gas.

We are also pursuing the opportunity to work directly with vehicle and/or engine
OEM's as a result of our repeated experiences in receiving requests from fleet
managers inquiring as to the availability of new vehicles already having the
conversion system in place. However, there can be no assurance that we will be
successful in these efforts.

In the U.S., we have identified California as our primary market development
area due to its more stringent air quality requirements and significant funding
opportunities supporting the use of alternative fuels. A number of
California-based companies seeking Clean Air compliance, tax rebates, grant
monies, and lower fuel costs have contacted our California dealer, ECO Power, to
purchase conversion kits upon completion of the California Air Resources Board
(CARB) emission compliance testing. Primary California customers groups include:
garbage truck fleets, heavy-duty dump and cement trucks, large lift trucks used
in shipping ports. We are not pursuing buses since in California the trend is to
retire existing diesel-engine buses and replace them with dedicated natural gas
buses. The cost differential between the natural gas bus and diesel bus is paid
for by grants (typically 80%) and on-site natural gas fueling stations are also
paid for by grants (typically 80%).

                Non U.S. Markets

Although there can be no assurance, we expect that foreign market demand will
eventually become our primary revenue generator. The tremendous medical expenses
associated with air pollution provides a significant incentive to third world
countries to implement cost effective solutions to combat the primary sources of
pollution - diesel burning cars, buses, and trucks. Egypt, Chile, Taiwan, China,
Columbia, and Australia have already begun demonstrating Save's conversion
technology with successful results. Other major markets of opportunity beyond
these include Mexico, Eastern Block and old Soviet Block countries, India,
Pakistan, Malaysia, Thailand, Indonesia, Japan, Argentina, Brazil, and Europe.

 Besides emission reduction, a major driving factor leading to dual fuel
conversions utilizing natural gas is the fuel cost savings associated with using
less diesel fuel where diesel pricing is generally higher. Other foreign market
driving forces originate with the country government. For countries who are
dependent on diesel fuel imports, natural gas imports are less costly. Countries
having indigenous supplies of natural gas and also export liquid petroleum
fuels, prefer to use the less expensive natural gas domestically and retain more
liquid petroleum for export.

A tremendous international selling point is that our dual fuel conversion system
requires no engine modification and the vehicle can revert back to 100% diesel
operation if natural gas fuel is depleted. Nitrous oxide (NOx) emissions are
reduced by 50% and virtually all visible smoke is eliminated without the need
for catalytic converters.

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        Product Research And Development

Our business plan includes significant allocations of both time and financial
resources to research and development. Although there can be no assurance that
our plans will not be modified, the following is an outline of what we have
identified as our current research and development initiatives over the next
several years.

                Phase I:  Existing Mechanical System Technology

Develop digitized central processing unit (CPU). Our existing dual fuel
conversion system for mechanical engines/diesel fuel pumps utilizes an analog
central processing unit (CPU), which is the computer heart of our dual fuel
conversion system. When the analog computer is developed into a digitized
computer, the existing conversion system will provide performance improvement in
the form of tighter control for both diesel fuel and natural gas. This will
result in the displacement of more diesel fuel. The digitized CPU will make
installation, set-up, and training easier. This will enable us to communicate
via email or a dedicated data-link line with customers/users of our systems to
assist with set-up and trouble shooting. Digitizing the CPU will also provide an
increased level of protection against threats of reverse-engineering. To date,
we have been cautious of entering certain markets with the analog system due to
patent protection concerns.

                Phase II:  Future Mechanical System Technology

Develop electronic PT valve for large Cummins engines. Cummins produces widely
used high horsepower engines (above 250 hp) for trash trucks, snowplows, and
sand and gravel on and off-road heavy-duty vehicles. They utilize their own
specially designed diesel fuel pump that allows the diesel fuel injectors to
control the timing of diesel fuel entering the engine cylinders based on
pressure and time (PT). Other engine manufacturers utilize Bosch and other
diesel fuel pumps, whereby the pump itself directly controls the amount of
diesel fuel delivered to the injectors.

We must complete development of a special electronic pressure-time (PT) valve
and integrate it into our existing Mechanical System Technology. The PT valve
would replace the existing diesel motor drive unit (MDU) and diesel fuel pump
lever assembly. Preliminary testing of an initial prototype has been completed
and performed according to the theory of operation. However, additional
development work is required to refine the operation before manufacturing
production units.

Although there can be no assurance, we expect that the cost associated with
completing development and testing of the electronic PT valve will be
approximately $65,000.

                Phase III:  Future Electronic System Technology

Develop an engine OEM electronic interface control unit that will interact
directly with the OEM electronic engine computer. During Y2000 and into the
first quarter of Y2001, we have been developing a dual fuel conversion system
for use with electronic engines. During the past few years, the trend for engine
OEM's has been manufacturing electronic management systems (versus mechanical
control systems) for their engines to reduce emissions. We believe that as time
progresses, more and more engine OEM's will be following this trend,
particularly in the U.S., Europe, and Japan. The new dual fuel conversion system
for electronic engines will have fewer components, will be easier to install and
program, and will have virtually no moving parts.

In connection with our research and development initiative during this period,
we have targeted the five most widely requested electronic medium and heavy-duty
engine families. The first step is to develop an electronic interface control
unit that interacts directly with the engine OEM electronics. We believe that
this is feasible and will prove out in application because two of the five
engine families (Navistar/International and Caterpillar) have already been
reverse-engineered and have resulted in fully developed and installed kits which
are currently under demonstration. The demonstration phase indicates additional
refinement is required on the electronic interface control unit in order to have
greater control of diesel fuel and natural gas so more diesel can be displaced.
We expect to have a completed product ready for commercialization in Y2001,
although there can be no assurance we will complete our testing within such
period or at all.

                                       10
<PAGE>

Develop a digitized central processing unit that incorporates the electronic
interface control unit. The second step is to develop a digitized central
processing unit (CPU) that incorporates the newly developed electronic interface
control unit.

Although there can be no assurance, we expect that the cost associated with
completing development and testing of each of these projects will be
approximately $45,000 ($90,000 total).

The electronic interface control unit and digitized CPU must be developed for
the three remaining engine families: Cummins M11, M14, and 5.9ISD. If the
reverse-engineering approach must be utilized (as with the first two engine
families), and although there can be no assurance, we expect that the cost
associated with completing development and testing of each of the three engine
families will be $105,000 ($315,000 total).

                Phase IV:  Future Stationary System Technology

(i) Develop electronic low-pressure gas metering valve, and (ii) Adapt the
electronic low-pressure gas-metering valve to interface with three different
types of diesel fuel governors: electronic, hydraulic, and mechanical.

There are two categories of stationary engine adaptation development: mechanical
stationary engines and electric power generation engines. The easiest to
approach is the mechanical engine since a momentary voltage spike during
switchover will not impact the operation of the end-process application.

Mechanical power generators are used in a number of applications including
pumping, compression, and shaft power. Development of a low pressure gas
metering valve (i) is the first step required in order to convert this type of
stationary engine to dual fuel. Once the electronic low-pressure gas metering
valve is available, the next step of adapting and interfacing the valve to work
with different types of governors (ii) may proceed. Governors typically
integrated into mechanical power generators include electronic, hydraulic, and
mechanical versions. The accomplishment of items (i) and (ii) will allow the
company to enter the stationary engine market by first addressing mechanical
generators. Technically, the R & D required to provide dual fuel conversion
systems for mechanical power generators may be accomplished in a much quicker
time frame than that required for electric generators.

There are two categories of electric power generation engines: emergency
generators and standby power generators (also included in this category are
dedicated electric power generators). Emergency power generators are used when
the main power supply is interrupted. With the existing diesel engine systems,
the engine reaches maximum RPM immediately to produce power. The engine is still
cold when this is accomplished. The research and development challenge is to
determine how to convert and operate the engine on dual fuel natural gas when
the engine is still cold and not create a voltage spike. Voltage spikes are not
tolerated in any applications where computers and other sensitive electronic
equipment are in use. To accomplish the switch over to natural gas dual fuel
without creating a voltage spike, the technology already available is electronic
governors. We must therefore develop the low-pressure gas-metering device to
interface with the electronic governor since virtually all of these emergency
generators utilize low-pressure gas. Once this is accomplished, response time
can be reduced significantly and the voltage spike can be eliminated. For each
size and type of diesel engine generator, a specific low-pressure gas-metering
device would have to be developed to interface with the electronic governor (the
very large engine requires the most development effort).

Standby power generators require the same components (electronic governor and
low pressure gas metering device). The difference is that the voltage spike is
not of great concern since these engines have the opportunity to heat up first
before gas would be introduced. Therefore, the standby generator market could be
serviced prior to refining the application for emergency electric power
generators. We can also provide conversions for dedicated power generation at
this time.

Although there can be no assurance, we expect that the cost associated with
completing development and testing of an electronic low-pressure gas-metering
valve will be approximately $125,000, and the cost associated with adapting the
electronic low pressure gas metering valve to interface with three different
types of diesel fuel governors (electronic, hydraulic, and mechanical) will be
$30,000 each ($90,000 total).

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<PAGE>

        Emissions Certifications

We currently sell dual fuel conversion systems in the U.S. and developing
nations. In order to qualify for U.S. Federal and state grants and tax benefits,
the reduction in polluting emissions that result from our engine modifications
must be certified by independent outside agencies. The two most important
regulatory agencies in the U.S. in connection with vehicle emissions are the
U.S. Environmental Protection Agency (EPA) and the California Air Resources
Board (CARB). Customers from third world nations generally inquire whether our
conversion system has either EPA or CARB certification knowing that such
certification would provide a satisfactory standard by which to measure
suitability for their own purposes. Although emissions criteria between these
agencies are similar, they are neither the same nor consistent. Emission
certification, verification requirements and testing protocol are variable and
therefore costly for after-market equipment certifications. In some cases,
testing protocol is either in flux or has not been identified. Following are two
of the variations:

         (a) Varies according to engine family, horsepower, and model year.
         (b) Varies according to whether the vehicle is classified as an
             on-road or off-road.

                California Air Resources Board (CARB) Certification

We currently have CARB certification for our dual fuel conversion systems
(Mechanical System Technology) on vehicles 1993 and older. Since CARB's
regulations have changed, our CARB certification is only applicable to
conversions in the State of California that will not be applying for state
funding or emissions credits. Consequently, in order for us to pursue the
lucrative alternative fuels grant programs available in California, we must
enter new verification/certification programs. The extent of CARB
verification/certification is very finite. One manufacturer's engine of a
specific horsepower, manufactured during a specific range of years for a
specific vehicle application is considered one verification/certification
program. Example: A vehicle having a MAC E6 engine with 260 horsepower,
manufactured between the years 1986 -1991, specifically for use in on-road trash
trucks in California. This is one CARB verification program, which by the time a
certificate is granted by CARB will cost $30,000. (Certification programs are
more time and cost intensive. Final cost could reach $60,000 for one
certification program.) Initially in California, there are two specific
categories that we desire CARB emission verification (and possibly a third in
Y2001):

    1. Volvo engine, trash trucks, 250 HP
    2. MAC E6 engine, trash trucks, 260 HP
    3. Cummins engine 8.3l, shipping dock cargo movers, trash trucks, sand &
       gravel, 275 HP

                EPA Certification

The federal income tax deductions available as a result of the Energy Policy Act
of 1992 requires that engines "satisfy any federal and state emissions
certification, testing, and warranty requirements that apply." On June 23, 2000,
we submitted to the Environmental Protection Agency a Notification of Agreement
with Conditions for Sale of Aftermarket Alternative Fuel Conversion Systems in
accordance with Memorandum 1A of the Environmental Protection Agency and Option
III contained in the Addendum. In order to be compliant with the Environmental
Protection Agency, we must meet 4 conditions as follows:

(1)      Full compliance with either Option I - Environmental Protection Agency
         Certification-, Option II -C A R B certification - or Option II -
         before and after emission testing to demonstrate that there has been no
         degradation of emissions;

(2)      Records to be kept for 5 years of all sales of kits under Option II,
         including engine family identification, the vehicle identification
         number of the converted vehicle, the date the conversion was completed,
         and the appropriate emissions data adjusted by the applicable
         deterioration factor;

(3)      When total sales of all alternative fuel conversion kits have reached
         200 units, a full certification plan must be presented to the
         Environmental Protection Agency for each engine family intended to be
         sold in model year 2002 and developmental testing in preparation for
         certification will begin;

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<PAGE>

(4)      If total sales of an alternative fuel conversion kit reach 600 for a
         particular engine family in model year 2000 and the kit manufacturer
         intends to sell that engine family in model year 2001, that engine
         family must be certified under Option I for model year 2001.

Accordingly, we will initially qualify the Save dual fuel system on several of
the most common diesel engine families under Option III. An engine family is
generally one manufacturer/displacement/or horsepower type, even though numerous
models of that type may have been manufactured over the years. Eventually, when
full compliance with Option I - full certification - will be required by
conditions (3) and (4) above, we expect that the cost to certify an engine will
generally be between $50,000 and $75,000. Testing requires about 30 days,
including set up and tear down. The Environmental Protection Agency typically
issues reports of the results and certifications within 60 days following the
testing. The first EPA certification program will be pursued in Y2001.

        Manufacturing & Inventory

On April 29, 1996, we entered into a supply agreement with Ambac International
Corporation ("Ambac") to be our exclusive supplier for electronic dual fuel
control systems for a period of twenty years. The material terms of the supply
agreement are:

         o        Ambac is required to develop both an analog and digital dual
                  fuel control system and agreed to sell those components
                  designed for, and only to, us for the term of the agreement.

         o        We are required to purchase all our dual fuel control systems
                  from Ambac as long as the technology and prices are
                  competitive, the components conform to industry standards, and
                  the units and are delivered timely.

         o        The dual fuel control systems are purchased under Ambac's then
                  current standard warranty.

         o        Unless the technology is covered under the patents owned by
                  the Davis Family Trust, Ambac retains the technological rights
                  to the dual fuel control systems.

         o        There are no minimum orders required.

         o        The supply agreement can only be terminated for good cause,
                  which shall include a material or repetitive breach of an
                  obligation, policy, procedure or requirement of the supply
                  agreement.

         o        The supply agreement requires the resolution of all disputes
                  before the American Arbitration Association.

Although we are currently in a dispute with Ambac over outstanding balances
owed, and although there can be no assurance as to the outcome thereof, we
believe that through continued discussions we will be able to resolve the
dispute on economic or other terms which are not unfavorable to us. Any
inability to resolve such dispute, however, could have a materially adverse
effect on our business, financial condition, results of operations and
prospects.

We do not include gas storage vessels in our conversion kit. The customer
purchases these separately from a number of companies who manufacture them, or
from us at the customer's request.

        Training

When a new dealer for Save is identified in the U.S. or in another country, they
must be trained on how to install and trouble-shoot the system, fabricate the
appropriate brackets for mounting conversion hardware, and have classroom
training regarding theory of operation. In the best case scenario the lead
mechanic can be thoroughly trained in one week. During this time, two vehicles
can typically also be converted as part of the training program.

                                       13
<PAGE>

Currently, we are developing an extensive training program for our sales force,
which includes internally developed manuals, training CDs and training videos.
Moreover, we expect to translate these materials for use in certain of the
foreign markets that we have identified and targeted.

        Marketing

To date, we have initiated marketing and sales activities on only a limited
basis. We had a small website that provided some inquiries and a collection of
information pages that were used as a marketing brochure when information was
requested. Our efforts have been concentrated principally on reacting to sales
leads generated by dealers and associates of the company, and on providing the
highest possible level of service to orders received. Consequently, sales during
the past three years have been limited.

Subject to the availability of required financing, we intend to launch our
formal marketing efforts both domestically and internationally later this year.
In the third quarter of 2000, we expanded our marketing efforts by contracting a
business development specialist who has been working in the international
natural gas vehicle market since the mid 1980's. This person is our acting Vice
President of business development and will become an employee in the company's
next growth step.

The key element in our overall business development strategy is to formalize and
implement a targeted communications strategy utilizing various marketing tools
that we intend to develop and enact. Because our potential markets are highly
targeted (e.g. "Sanitation Trucks"), we intend to be very selective in our
advertising media. We expect that our website will become the most significant
means of providing current up-to-date information to potential customers,
especially in connection with our non U.S. business development initiatives. We
also intend to prepare brochures and related marketing tools promoting our
conversion equipment for distribution at conferences, exhibitions, to our
dealers and for targeted mailings.

Participation at industry conferences attended by target company/organization
decision-makers is another key component of our marketing plan. Where necessary
or advisable, as an entry into shows and conferences, we will take membership in
the associations that promote the increased use of natural gas as an alternative
vehicle fuel, including for example, the Natural Gas Vehicle Coalition in the
U.S. and International Association for Natural Gas Vehicles.

In addition, we intend to place advertisements in targeted industry journals
specifically involved with medium and heavy-duty diesel vehicles, such as
Natural Gas Fuels, Alternative Fuels, Diesel Progress, Utility Fleet Management,
Waste Management (trash trucks), Transportation (school buses and public transit
buses).

Finally, developing strategic partnerships in the natural gas, alternative fuel,
vehicle, and engine markets is an important aspect of our marketing plan. We
will continue to identify individuals and companies that will potentially
provide mutually beneficial long-term relationships that enhance our business
opportunities. Examples of candidate companies include manufacturers of
compressed and liquefied fuel storage equipment, fueling station equipment,
engine and vehicle manufacturers, natural gas distribution and pipeline
companies, industry organizations like the Natural Gas Vehicle Coalition,
European Natural Gas Coalition, International Association for Natural Gas
Vehicles, and certain government related departments like DOE's Clean Cities.

        Sales

                Generally

During the past six years, we have outfitted approximately 1,000 dual fuel
conversion systems into vehicles throughout the U.S. and in several foreign
markets, representing approximately 0.007% of the total number of vehicles
worldwide qualified to benefit from such a system. Each of these units utilized
our Mechanical System Technology. While approximately 50% of these units were
sold for prices ranging from $2500 to $5200, the remaining units were placed
into the market without charge as part of our beta test.

As of the beginning of Y2001, there are approximately 14 million medium and
heavy-duty diesel engine vehicles internationally. Of this amount, approximately
80% are mechanical type engines and 20% electronic type engines.

                                       14
<PAGE>

                Dealers

We have determined that, rather than pursue all of our sales activities through
in-house sales representatives, we would likely achieve more favorable results
from building our sales through the establishment of a network of independent
domestic and international dealers. Our dealers, therefore, are actually our
customers, and our sales revenue necessarily depends upon the success of our
dealer sales. We are currently evaluating our existing dealer sales performance
and identifying, assessing, establishing and training new dealers. We are also
pursuing the opportunity to work directly with vehicle and/or engine OEM's as a
result of our repeated experiences in receiving requests from fleet managers
inquiring as to the availability of new vehicles already having the conversion
system in place.

Our dealers purchase our conversion systems directly from us. Dealers source the
additional equipment required for vehicle conversions, such as compressed or
liquefied natural gas fuel containment equipment and other minor components, and
price the complete installation for their customers. Besides pursuing sales
opportunities for the Save dual fuel conversion system, and following proper
training, dealers install and service the conversions. As we continue to
penetrate our markets, and offer more product variation for additional vehicle
types through R&D and emissions certification, we believe that the task is
likely to become easier to further expand our network of dealerships
internationally and to increase sales. As distinct from the sales of our
products to fleet operators and other users, activities relating to the
establishment of new dealers and training are referred to as our "corporate"
sales.

We currently have nine dealers strategically located throughout the U.S. They
are in regions that are particularly active in utilizing alternative fuels and
have the most developed natural gas fueling infrastructures. Most of these
regions also have significant grant monies available to develop the use of
alternative fuels. Outside of the U.S., we have a total of three dealers located
in Egypt, Australia, and Columbia. Of the three countries, Australia is the only
country with grant money available for conversions. Egypt's main thrust for
conversion is the reduction of air pollution and to use indigenous supplies of
natural gas. In Columbia, the price of diesel is higher than natural gas causing
an economic incentive to convert without grants.

                Establishment of New Offshore Dealers

This is our primary corporate sales activity. For the most part, prospective
offshore dealers contact us after discovering our products/technology on our
website. At that time, we generally discuss our dealer qualifications and
requirements, which are identified on a special page on our website. Typically,
vehicle types, market expansion readiness, natural gas fueling station
infrastructure, government support, and phased-in sales potential are also
considered at this stage of a developing dealership.

Although there are numerous opportunities for establishing new international
dealers and market introduction of our dual fuel conversion system, as a
requirement of each country whose market we enter (notwithstanding whether it is
a potential new dealer, government petroleum company, or government public
transit company with whom we are considering doing business), we must invariably
first conduct an initial demonstration program with 1-3 vehicles. Our experience
has been that it makes no difference to local officials that the conversion
technology has performed successfully in the U.S. or other countries. There is a
consistent and prevailing concern that the technology will not prove effective
in connection with their particular vehicles and in their environment.
Demonstration programs in this regard can last up to three months.

The demonstration program that we have relied upon requires that we provide from
1 to 3 conversion systems at an approximate cost of $2500 per system. Assuming
three systems, and an additional (approximate) $800 cost of one diagnostic unit
used to set-up and tune the systems, we are likely to incur an approximate $8500
expense in connection with each country we enter, exclusive of travel and other
associated expenses. The system cannot be installed without first training the
dealer mechanics, thereby requiring two trainers to travel to the country and
conduct the training program for a period of 7-10 days while also working
side-by-side with the mechanics to install and tune the systems. Upon departure
of our trainers, the newly trained mechanics will provide follow-up service to
the converted vehicles. The total estimated initial cost to implement the
international market development strategy can run to approximately $25,000 or
higher per country, including hardware and travel costs. Although its

                                       15
<PAGE>


continuation cannot be assured, we currently maintain a policy of requiring
prospective foreign dealers to have an irrevocable letter of credit in place for
the amount of the conversion systems (or bank wire transfer of funds before
shipping) prior to our initiating any international demonstration programs.
Moreover, in order to avoid any potential ambiguity, we also currently rely on a
written agreement defining the terms of a "successful demonstration program".

                Establishment of New U.S. Dealers

New U.S. dealers also require demonstration programs, particularly those with
certain types of customers which rely on U.S. DOE or state grants. Such
demonstrations typically include the conversion of one vehicle, the performance
of emissions testing, and the measurement of fuel consumption. Ordinarily, we
send at least one trainer to conduct the new dealer training program and lead
the conversion of one vehicle, which program takes approximately one week. After
successful demonstration, the remaining vehicles qualified in the grant program
can be converted. This typically requires our trainer to assist the new dealer
one more time to further reinforce training. We believe that the estimated cost
associated with the establishment of each new U.S. dealer, including travel
expenses, will generally cost less than $10,000.

                Dealer Sales Support

Occasionally, our dealers require the assistance, support, and encouragement
from the company office when participating in meetings regarding certain
potential large fleet customers, conversion funding opportunities, or sensitive
issues. It is the role of the VP business development and technical sales
director to provide the support needed in order to expand dealer sales.

                Vehicle and Engine OEM Sales

In some cases, certain fleet managers or U.S. DOT management prefer to purchase
new vehicles already having the our dual fuel conversion system in place rather
than converting existing vehicles. To date, OEM's have not been receptive to
this option. We intend, however, to continue to explore and possibly pursue
opportunities that may exist for establishing such a relationship.

        Employees

As of December 31, 2000, we employed 3 persons on a full-time basis, of which 2
were engaged in production and design, 1 was engaged in business development and
3 were engaged in administrative, clerical and accounting functions. To
implement our business strategy, we will have to hire additional personnel in
2001, although we cannot predict with certainty when or if we will do so. We
believe that our relationship with our employees is good and we are not a party
to any collective bargaining agreement.

        Regulation

We do not believe that our currents products, as sold by us, are subject to any
regulatory requirements with which we must comply.

        Our Intellectual Property

Our success depends to a great extent on our ability to protect our intellectual
property. We license our core intellectual property pursuant to a license
agreement between the Company and the Davis Family Trust which is filed as an
exhibit hereto (as amended, the "License Agreement"). The initial patent granted
to Frank Davis, upon which the Company based its technology (U.S. Patent
#4,479,466), was granted on October 30, 1984, for "[a] natural gas and air
mixing device for allowing the combustion of a mixture of natural gas and air in
a conventional internal combustion engine." Although this device was designed
specifically for the purpose of using natural gas to power a gasoline engine, it
set the stage for future work to develop conversion kits that would permit
diesel engines to operate on a mixture of diesel and natural gas.

                                       16
<PAGE>

Frank Davis and his son, Robby Davis, our President and Chief Executive Officer,
were also granted three additional patents for mixing devices. Two were issued
in 1991 and the third in 1994. All three described apparatuses for introducing a
mixture of air and gaseous fuel into internal combustion engines and the method
or process by which that is done. Further, in December 6, 1994, Frank Davis and
Robby Davis were issued United States Patent # 5,370,097 for a "Combined Diesel
and Natural Gas Engine Fuel Control System and Method of Using Such" for an
internal combustion engine. This patent describes using a control means to
insert the gaseous fuel in response to engine speed and load. This is the base
patent upon which we now rely.

In addition, Frank Davis and Robby Davis have filed foreign patent (PCT)
applications in Germany and the United Kingdom, and have assigned their
interests in these patents to the Davis Family Trust.

Pursuant to the License Agreement between the Company and the Davis Family
Trust, we maintain the exclusive rights to utilize and exploit each of the five
patents including marketing and selling products and granting sublicenses to
others. In addition, the Company has the first option to acquire a license for
the same patents in other countries where it has not yet been granted.

In consideration for the License Agreement, we executed a promissory note for
$150,000 (the "Promissory Note") pursuant to which we are required to pay a
royalty of $21 per patent per unit sold during the life of four of the patents
and $150 per unit sold on a fifth patent for a dual fuel control system
(collectively, the "Original Royalties"), which amounts are subject to
adjustment annually to reflect changes in the consumer price index. In
accordance with the terms of the License Agreement, the Original Royalty is
increased at certain points by an amount equal to $79 per patent per unit (the
"Additional Royalty"). The Additional Royalty shall be payable until such time
as the amount of any Additional Royalty generated from the sale of units shall
aggregate $150,000 plus accrued interest calculated at the rate of 12% per
annum. After such time as this amount is paid, the royalty reverts to the
original royalty as adjusted to reflect increases in the consumer price index.

To date, the License Agreement has been amended twice. First, on June 18, 1998,
to (i) liquidate certain obligations owed by us to the Davis Family Trust, (ii)
issue certain shares of our common stock to the Davis Family Trust, and (iii) to
mark the Promissory Note "paid in full". Second, on January 3, 2000, to (i)
restrict the license rights to the United States, Canada, Mexico and Egypt, and
(ii) eliminates all quotas as specified in the original agreements.

We rely primarily on a combination of copyright and trade secret protection
together with the protections under the Licensing Agreement and nondisclosure
and confidentiality agreements to establish and protect our proprietary rights.
The patent protection afforded to our licensed intellectual property is
uncertain and may involve complex legal and factual issues. With respect to the
pending international patents assigned to the Davis Family Trust, there can be
no assurance that such patents will be issued or, if issued, whether they will
provide significant proprietary protection or will be circumvented or
invalidated. Additionally, since an issued patent does not guarantee the right
to practice the claimed invention, there can be no assurance others will not
obtain patents that we would need to license or design around in order to
practice its patented technologies, or that licenses that might be required
would be available on reasonable terms.

We also rely on trade secret laws for protection of our intellectual property,
but there can be no assurance others will not independently develop
substantially equivalent proprietary technology or otherwise gain access to our
trade secrets or technology, or that we can adequately protect our rights to
unpatented trade secrets.

         Our Competition

The market for our products is rapidly evolving and highly competitive. We
expect competition to continue to intensify in the future. We currently or
potentially compete with a variety of companies. These competitors include:

Advanced Engine Components, Ltd. This Australian company markets a control unit
and other proprietary parts that are necessary to convert a diesel engine to
dedicated natural gas. In conjunction with a German bus manufacturer and an
Eastern European engine manufacturer, Advanced Engine is opening doors in many
parts of the world that represent marketing opportunities for Save.

                                       17
<PAGE>

Clean Air Partners ("CAP"). CAP is a California based technology research
organization that developed the closed-loop system of using natural gas together
with diesel fuel to create a lower emission diesel engine. This is available for
only three Caterpillar electronic engines. CAP has provided this technology to
Caterpillar for both OEM and after-market applications through its dealer
network and to some smaller diesel engine after-market products companies for
sale within the U.S. CAP has also licensed the technology to a Canadian company,
Alternative Fuel Systems, Inc., for use in after-market installations outside
the U.S. CAP has referred business to us in the past because of what we believe
to be (i) limitations on their own product offering, and (ii) our reputation.

Caterpillar. Caterpillar offers two OEM dual fuel engines. Both are open-loop
systems that operate on one, pre-set mixture of diesel and natural gas. The cost
of this option is more than $25,000 higher than the same engine in diesel-only
form.

Alternative Fuel Systems, Inc. ("AFS"). "AFS", headquartered in Calgary,
Alberta, Canada manufactures an after-market kit to convert an existing vehicle
electronic engine to dual fuel. All of AFS's sales activity is outside the U.S.
Installed in the customer's vehicle, the AFS and the Save system costs are
approximately the same. AFS is a publicly traded company on the Canadian Stock
Exchange under the symbol "ATF". Additional information on the AFS system is
available on their website, located at www.altfuelsys.com.

We believe that the principal competitive factors on which we compete in our
markets include:

        o Quality of our Technology; o Customer Service; o Price; and o Brand
        Recognition.

We may not be able to maintain a competitive position against current or future
competitors as they enter the markets in which we compete. This is true
particularly with respect to competitors with longer operating histories, larger
customer bases and greater financial, marketing, service, support, technical and
other resources than us. In addition, our competitors may be acquired by,
receive investments from or enter into other commercial relationships with
larger, well-established and well-financed companies. Some of our competitors
may be able to secure merchandise from vendors on more favorable terms, devote
greater resources to marketing and promotional campaigns, adopt more aggressive
pricing or inventory availability policies and devote substantially more
resources to Website and systems development than we can. Our failure to
maintain a competitive position within our markets could seriously harm our
business, financial condition, operating results and cash flows.

In addition, increased competition may result in reduced operating margins, loss
of market share and a diminished brand franchise. We may from time to time make
selected pricing, service or marketing decisions or acquisitions as a strategic
response to changes in the competitive environment. These actions could result
in reduced margins or otherwise seriously harm our business, financial
condition, operating results and cash flows.

In addition to the competitors identified above, we also compete indirectly with
product types that impact negatively on our market:

OEM Dedicated Natural Gas Fuel Systems. Many diesel engine manufacturers offer
an engine alternative that runs exclusively on natural gas. These single-fuel
(natural gas) engines cost, on average, between $35,000 and $50,000 more than
the same engine in diesel-only form. The major reason for this incremental cost
difference is that conversion of a diesel engine so that it operates only on
natural gas requires the incorporation of a complete spark plug and ignition
system. In addition, because the all-gas mixture explodes much more violently
upon ignition, the pistons have to be extensively modified to reduce the
compression ratio. In addition to the front-end incremental expense, these
engines have higher maintenance costs and shorter lives.

Bio-Diesel Fuel. In addition to natural gas/diesel, bio-diesel is another
alternative fuel that has been characterized as clean burning. This fuel is a
mixture of diesel and a vegetable oil. Several such oils are available in the
market. Bio-diesel fuel requires no engine conversion for use. At approximately
$3.00 per gallon, however, it is much more expensive than alternative fuels, and
cost-prohibitive to most operators. It is used and sold primarily as a mixture
of 20% bio and 80% diesel and is identified as B20. Our dual fuel conversion
system can be used with vehicles

                                       18
<PAGE>


operating with B20 biodiesel. Another issue associated with bio-diesel fuel is
the odor it emits, which, depending on the specific oil that is being used, can
be unpleasant.

ITEM 2.  DESCRIPTION OF PROPERTY

We currently occupy space located in an industrial park which consists of
approximately 6,000 square feet of combination office and warehouse space
located at 4851 Georgia Highway 85, Suite 211, Forest Park, Georgia 30050, which
location is very near the intersections of Interstates 285 and 75, and close to
the Atlanta airport.

Although our lease expired as of December 31, 2000, and we are currently on a
month-to-month tenancy, we expect to renew our lease for at least one additional
year. There can be no assurance, however, that we will be able to renew our
lease, or that, if we are able, that we will be able to do so on terms that are
favorable.

ITEM 3.  LEGAL PROCEEDINGS

On November 24, 1999 a lawsuit was initiated against us in the State Court of
Clayton County, State of Georgia, File No.99-CV-04454-E, entitled Roger Shugart
v. Save On Energy, Inc. f/k/a Electronic Fuel Control, Inc.. In this action, the
Plaintiff, an independent consultant, is seeking approximately $120,000 plus
interest stemming from a personal consulting services agreement between
Plaintiff and us for certain consulting services and expertise to be rendered by
Plaintiff in connection with a fuel conversion project in Uzbekistan in 1997 and
1998. We contracted with the consultant at the direction and benefit of another
party who was the primary contractor of the project. The case is currently in
the discovery stage. Although we have defenses against the plaintiff and we
intend to bring into the lawsuit (or arbitration if it is changed) as a
third-party defendant, American Engineering Corporation, on a claim for
indemnification, there can be no assurance of any particular result. There
remains tremendous uncertainty as to the outcome of this matter and any
unfavorable outcome could have a materially adverse effect on our business.
Although we have been represented by the law firm of Hancock & Echols in
connection with this matter since it began, as of late January 2001, Hancock &
Echols withdrew as our counsel based on non-payment of fees owed to them. To
date, we have not retained alternate counsel, though we are currently attempting
to either retain alternate counsel or to re-establish our relationship with
Hancock & Echols.

Although we are not currently a party to any other lawsuits, we have received
threats of litigation from two parties:

Ambac International Corporation ("Ambac"), currently our sole supplier, has made
a demand for payment in an amount equal to $109,915.60 which amount they believe
is owed to them but which amount we dispute. We are currently in discussions
with Ambac to resolve this dispute and, although there can be no assurance,
believe that we will be able to do so on economic and other terms that are
acceptable to us and that will not a materially adverse effect on our business.

We have also received threats of litigation from Advisors International, LLC
("Advisors") in connection with a certain promissory note issued by us in an
amount of $50,000 which became due in November 21, 2000 and which, to date, we
have been unable to satisfy. We are currently in discussions with Advisors to
resolve this dispute and, although there can be no assurance, we believe that we
will be able to do so on economic and other terms that are acceptable to us and
that will not a materially adverse effect on our business.

Other than that identified above, we are unaware of any litigation currently
threatened against us.

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

During the fourth quarter of the fiscal year ended December 31, 2000 no matters
were submitted to a vote of the shareholders of the Company.

                                       19
<PAGE>


                                     PART II

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

        Market Information

Our common stock is currently quoted in the "Pink Sheets" under the symbol
"SOEI" and began trading December 17, 1996. Although we traded on the OTC
Electronic Bulletin Board maintained by the National Association for Securities
Dealers, Inc. (the "OTC Bulletin Board") until approximately April 1999, because
we were not a reporting company as required by certain relatively recent rules
of the OTC Bulletin Board, we became delisted therefrom and trade now in the
"Pink Sheets" only. Although there can be no assurance, as a result of certain
actions we have either already taken or are in the process of taking, including
working in connection with a certain market maker to cause the filing of a Form
211 with the Securities Exchange Commission, we expect to become listed on the
OTC Bulletin Board within several months.

The following table sets forth representative high and low bid prices by
calendar quarters as reported in either the OTC Bulletin Board or the "Pink
Sheets" during the last two fiscal years. The level of trading in the Company's
common stock has been limited and the bid prices reported may not be indicative
of the value of the common stock or the existence of an active market. The OTC
market quotations reflect inter-dealer prices without retail markup, mark-down,
or other fees or commissions, and may not necessarily represent actual
transactions.

                          High Bid Price Low Bid Price

        Q1/1999        0.875                0.5
        Q2/1999        0.875                0.375
        Q3/1999        0.75                 0.3125
        Q4/1999        1.0000               0.2500
        Q1/2000        3.5000               0.8125
        Q2/2000        *                    *
        Q3/2000        *                    *
        Q4/2000        *                    *

*  Not Available

As of February 2, 2001, there were 3,589,200 shares of common stock outstanding.

        Shareholders

As of February 2, 2001, the number of holders of record of our common stock was
31, with any shares held by persons or companies in street or nominee name
counted only under such street or nominee name.

        Dividends

We have not paid any cash dividends in the past and have no present intention of
doing so. Payment of future cash dividends will be determined from time to time
by our Board of Directors, based upon its future earnings (if any), financial
condition, capital requirements and other factors, the company is not presently
subject to any contractual or similar restriction on its present or future
ability to pay such dividends.

        Recent Sales of Unregistered Securities

In January 2000, we issued 250,000 shares of common stock to the Davis Family
Trust, an affiliate of Save, in connection with the trust's agreement to amend
the License Agreement respecting certain patents and technology, to extend the
license to include the continental United States, Mexico, Canada, Egypt and
South America.

                                       20
<PAGE>

In January 2000, we issued 100,000 shares of common stock to Patricia Davis, the
wife of Frank Davis, in lieu of past consulting fees of $15,000 owed to Frank
Davis.

In January 2000, we issued 100,000 shares of common stock to Bresner Partners,
Ltd. in consideration for consulting services valued at $75,000.

In January 2000, we granted 62,500 warrants with a strike price of $1.00 per
share to Dirks & Company, Inc.; Hugh and Rosemarie Deane, and Stephen Zellner in
consideration of certain financial consulting services rendered. These warrants
expire in 2005.

In January and February 2000, we issued an aggregate of 800,000 shares of common
stock to Lanier M.. Davenport, Lanier M. Davenport, Jr., UTMA; Steven Ray
Davenport, UTMA; Sarah Byrd Davenport, UTMA; Carol Espinosa; Jonathan P. Hoover;
Dennis L. Knight; Kota Suttle; Daryl Powell; and Gerald B. Andrews, in
consideration for a combination of consulting services valued at $215,000 and
cash of $233,500.

As of February 11, 2000, we borrowed a total of $25,000 from James and Lucy
DeLisa, private lenders. The loan is evidenced by a one year promissory note
which is convertible for common stock at conversion rate of $0.75 per share.

As of March 1, 2000, we borrowed a total of $75,000 from four separate private
lenders. The loans are evidenced by one year promissory notes which are
convertible for common stock at conversion rate of $0.75 per share.

As of April 25, 2000, we borrowed a total of $10,000 from four separate private
lenders. The loans are evidenced by one year promissory notes which are
convertible for common stock at conversion rate of $0.75 per share.

As of April 27, 2000, we borrowed a total of $40,000 from four separate private
lenders. The loans are evidenced by one year promissory notes which are
convertible for common stock at conversion rate of $0.75 per share.

In April 2000, we issued 20,000 shares of common stock to Success-Unlimited.Net,
Inc., a public relations company, in consideration for certain public relations
services valued at approximately $20,000.

As of May 1, 2000, we borrowed a total of $20,000 from Profit Center, a private
lender. The loan was evidenced by a one year promissory notes which is
convertible for common stock at conversion rate of $0.75 per share.

As of May 3, 2000, we borrowed a total of $20,000 from Thomas Kilconey, a
private lender. The loan was evidenced by a one year promissory notes which is
convertible for common stock at conversion rate of $0.75 per share.

As of May 5, 2000, we borrowed a total of $35,000 from four separate private
lenders. The loans are evidenced by one year promissory notes which are
convertible for common stock at conversion rate of $0.75 per share.

As of May 22, 2000, we borrowed a total of $5,000 from Thomas Kilconey, a
private lender. The loan was evidenced by a one year promissory notes which is
convertible for common stock at conversion rate of $0.75 per share.

As of November 30, 2000, we granted 100,000 warrants with a strike price of
$0.75 per share to MBO, Inc. in consideration of certain financial consulting
services and vesting upon completion of certain milestones. These warrants
expire in 2003.

All of these securities were issued in private direct transactions, exempt under
Section 4(2) of the Securities Act of 1933, as amended, or Regulation D
promulgated thereunder.

                                       21
<PAGE>


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS

The following is management's discussion and analysis of significant factors
which have affected the our financial position and operations during the fiscal
year ended December 31, 1999 ("Fiscal '99") and December 31, 2000 ("Fiscal
2000"). This discussion also includes events which occurred subsequent to the
end of Fiscal 2000 and contains both historical and forward-looking statements.
When used in this discussion, the words "expect(s)", "feel(s)", "believe(s)",
"will", "may", "anticipate(s)", "intend(s)", and similar expressions are
intended to identify forward-looking statements. Such statements are subject to
certain risks and uncertainties, which could cause actual results to differ
materially from those projected. Factors that might cause or contribute to such
differences include, but are not limited to, those discussed in "Risk Factors".
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Readers are also urged to
carefully review and consider the various disclosures elsewhere in this Report
which discuss factors which affect the Company's business, including the
discussion at the end of this Management's Discussion and Analysis of Financial
Condition and Results of Operations, under the subcaption "Risk Factors". This
discussion should be read in conjunction with the Company's Audited Financial
Statements and the accompanying notes relating thereto in Item 7 of this Report.

The following management's discussion and analysis of the financial condition
and results of operations should be read in conjunction with our financial
statements and the accompanying notes appearing elsewhere in this report. In
addition to historical information, this management discussion and analysis of
financial condition and results of operations contain forward-looking
statements. Our actual results could differ materially from those anticipated in
the forward-looking statements as a result of factors, including those set forth
under "Risk Factors" and in other parts of this Form 10-KSB.

        Overview

We primarily market alternative fuel retrofit conversion kits which include a
patented device by which a diesel fuel engine is converted to an engine powered
by either a mixture of diesel fuel and alternative fuel, approximately 80%
natural gas, 20% diesel fuel, or diesel fuel exclusively, which system permits
the vehicle operator to switch from the mixed fuel source to diesel fuel at the
flip of a switch from the driver's seat when the alternative fuel is depleted.
Since the engine can then use either a mixture of alternative fuel and diesel
fuel or diesel fuel alone, the system is a duel fuel system. To a much lesser
degree, we also market conversion kits which convert a gasoline fuel engine to a
bi-fuel engine which can be powered by either gasoline or natural gas.

The primary marketing focus of our duel fuel system is the diesel truck and bus
market segments. Although we have completed development of our duel fuel system
for normally aspirated engines and turbocharged engines, we are still in the
process of developing our duel fuel system for drive-by-wire engines.

        Results of Operations

Comparison of Twelve Month Periods Ended December 31, 2000 and December 31, 1999

The following table sets forth certain statement of operation items as a
percentage of net sales for the period indicated:

                                      Twelve Months Ended :
                                          December 31

                              1999         2000           1999        2000

Net Sales ............   $ 560,124    $ 288,874        100.00%     100.00%
Cost of Goods Sold ...   $ 329,791    $ 173,265         58.88%      59.98%
Gross Profit .........   $ 230,333    $ 115,609         41.12%      40.02%
Operating Expenses ...   $ 681,918    $ 926,996        121.74%     320.90%
Other Income & Expense   $ 158,013    $ 130,247         28.21%      45.09%
Income Tax ...........        --           --            0.00%       0.00%
Income (Loss) ........   ($609,598)   ($941,634)      (108.83%)   (325.97%)

                                       22
<PAGE>


Our revenues during FY1999 and FY2000 resulted primarily from sales of the our
Mechanical System Technology dual fuel system kits. Approximately 48 such kits
were sold in 1999 and about 22 systems were sold in 2000, at prices ranging from
about $4000 to over $5,200. Our remaining revenues resulted from the sale of
gasoline bi-fuel conversion kits, part kits for dedicated diesel fuel vehicles,
installations of conversion kits and sales of fuel tanks.

Our revenues decreased from $560,124 in FY1999 to $288,874 in FY200. This
decrease was due mainly to our focus away from sales and towards perfecting and
certifying our technology and raising capital. There was only a very minor
change in our Cost of Goods Sold and our Gross Profit between the two periods.

Our Operating Expenses rose by $245,078 between FY1999 and FY2000. This was due
in large part to a significant increase in our consulting charges, which rose by
$149,521 as a result principally of fees associated with our financing
activities, an increase in our rental charges from $25,950 to $36,974 due
principally to additional space we leased for operations, an increase in our
research, development and product testing expenses from $3,155 to $34,281 due
primarily to our drive-by-wire and L10 projects, an approximate doubling of our
royalty and patent charges from $15,978 to $32,325 principally due to increased
sales of our kits subject to our License Agreement with the Davis Family Trust,
a 443% increase in our sales promotion, advertising and public relations
expenditures from $5,847 to $25,924 due to our increased and expanded marketing
activities, an increase in professional fees from $35,910 to $96,764 due
principally to costs incurred in relation to the preparation and filing of our
SB-2 registration statement covering the resale of certain outstanding
securities.

Our Other Interest Income and Expense, which consisted of Interest Expense,
Interest Income, Loss on Litigation and Penalties on Tax deficiencies, decreased
from $158,013 to $130,247 in FY2000 and FY1999, respectively. This was primarily
the result of a Loss on Litigation experienced in 1999, a large expense
associated with penalties on tax deficiencies in 2000, and an increase in
Interest Expense from $35,489 to $78,233 as a result of our issuance of $380,000
in 12% convertible notes as of November 1999 through May 2000.

        Liquidity and Capital Resources

During 2000, we financed our operations primarily through private sales common
stock and convertible notes, borrowings under our revolving line of credit with
Peachtree National Bank, short term loans from insiders and, to a limited
extent, revenues derived from the sale of our products.

Between November and May 2000, we borrowed a total of $380,000 from 19 private
lenders. The loans are evidenced by one year promissory notes which bear
interest at 12% per annum and are convertible for common stock at a conversion
rate of $0.75 per share. As of March 31, 2001, we had defaulted on the repayment
of nine of these notes for an aggregate amount of $250,000, and are currently in
negotiations with such noteholders.

On April 4, 2000 we borrowed $148,000 pursuant to our revolving loan with
Peachtree National Bank. The loan bears interest at prime + 2% per annum and is
secured by Peachtree's interest in all of our equipment, inventory and accounts
receivable.

At various times during 2000, certain of our shareholders made short term loans
in the aggregate amount of $39,666 at the then market rates.

Net cash used in operating activities was $259,148 in fiscal 1999 and $467,880
in fiscal 2000. Cash used in operating activities in fiscal 1999 primarily
resulted from a net loss of $609,598 plus a decrease of $67,886 in accounts
payable offset by net cash generated by depreciation and amortization of
$17,317, a decrease in accounts receivable of 69,395, a reduction in inventory
of $104,119, a decrease in notes receivable of $66,228, and increases of
$32,684, 125,000 and 3,598, in taxes payable, accrued litigation loss and
accrued expenses, respectively. For fiscal 2000, cash used in operating
activities primarily resulted from a net loss of $941,634 plus increases of
$5,915 in accounts receivable and $47,505 in inventories, offset by an increases
in accounts payable, taxes payable and accrued expenses of $484,814, a decrease
of $22,500 in notes receivable as well as depreciation and amortization of
$19,860.

                                       23
<PAGE>

As of December 31, 2000, the Company had $14,207 in cash. As shown in the
accompanying financial statements, and as December 31, 2000, the Company's
current liabilities exceeded its current assets by $1,145,836 and its total
liabilities exceeded its total assets by $1,115,935. These factors create an
uncertainty about the Company's ability to continue as a going concern.
Management of the Company is developing a plan to reduce its liabilities by
restructuring its debts and converting a substantial portion into equity and
issuance of additional stock to shareholders. The ability of the Company to
continue as a going concern is dependent on the plan's success.

        Risk Factors

The Company's liquidity, capital resources, and results of operations indicate
that an investment in the Company remains speculative, involves a high degree of
risk, and should not be made by persons who cannot afford the loss of their
entire investment. Prospective investors in the Company should carefully
consider all of the information contained in this Report before deciding whether
to purchase securities of the Company, and, in particular, the factors set forth
below.

Information contained in this Report contains "forward-looking statements" which
can be identified by the use of forward-looking terminology such as "believes",
"expects", "may", "should" or "anticipates" or the negative thereof or other
variations thereon or comparable terminology or by discussions of strategy. No
assurance can be given that the future results covered by the forward-looking
statements will be achieved. The following Risk Factors include, among other
things, cautionary statements with respect to certain forward-looking
statements, including statements of certain risks and uncertainties that could
cause actual results to vary materially from the future results referred to in
such forward-looking statements.

RISKS ASSOCIATED WITH OUR BUSINESS

We  Need To Obtain Financing In Order to Pursue Our Business Plan.

We have incurred negative cash flow from operations since inception. We do not
expect to generate positive cash flow sufficient to fund our operations in the
near term. We believe that our available cash, cash from operations and
available borrowings will be insufficient to satisfy our projected cash
requirements through 2001. Thus, we currently need to raise additional capital
to repay existing debt including certain notes which came due as of November 21,
2000, fund our research and development, manufacturing, sales and marketing
activities, and we are currently seeking to obtain such financing. Our future
liquidity and capital requirements will depend on numerous factors, including:

     o    the extent to which our present and future products gain market
          acceptance;

     o    the extent to which we successfully develop products under research or
          development;

     o    the timing of emissions certifications concerning our products;

     o    the timing, procurement and enforcement of international patent (PCT)
          awards;

     o    the costs and timing of expansions of our sales, marketing and
          manufacturing activities;

     o    the cost, timing and business management of future potential
          acquisitions, if any, and contingent liabilities associated with
          acquisitions; and

     o    the results of competition.

We cannot assure you that additional capital will be available on acceptable
terms, if at all. Furthermore, any additional equity financing would likely be
dilutive to stockholders, and debt financing, if available, may include
restrictive covenants which may limit our currently planned operations and
strategies. If adequate funds are not available, we may be required to curtail
our operations significantly or to obtain funds by entering into collaborative


                                       24
<PAGE>

agreements or other arrangements on unfavorable terms. If we fail to raise
capital on acceptable terms, our business could be substantially harmed or we
could be forced to cease operations.

We Have A History Of Losses And May Never Achieve Profitability.

We have incurred net losses since our inception. At December 31, 2000, our
accumulated deficit was $2,540,564. We anticipate that we will continue to incur
additional operating losses in the near to mid-term. Our losses to date have
resulted principally from expenses incurred in our research and development
programs, including beta testing, and from general and administrative and sales
and marketing expenses. We cannot assure you that we will attain profitability
or, if we do, that we will remain profitable on a quarterly or annual basis in
the future.

Our Auditors Have Determined That There is Uncertainty As To Our Ability to
Continue As A Going Concern.

Our auditors, Jack Kane & Company, P.C., have included a footnote in the
financial statements which they have prepared and which are included as Item 7
of this Form 10-KSB that calls into question our ability to operate as a going
concern. Their conclusion is drawn from the fact that we incurred a net loss of
$941,634 during the year ended December 31, 2000, and, as of that date, our
total liabilities exceeded our total assets by $1,115,935. Although we are
currently pursuing appropriate financing alternatives in an effort to strengthen
our financial condition, we cannot assure you that any such financing will be
obtained or that, if obtained, it will be on terms which are favorable.

Our Limited Operating History Makes It Difficult To Analyze Our Prospects For
Success.

We were organized on April 1, 1996 and have conducted only limited operations to
date, consisting of negotiating the license to use the patents, further research
and development, including beta testing, and limited sales efforts. No
assurances can be given that we will develop a marketing and sales program which
will generate significant revenues from the sales of our duel fuel conversion
systems. The likelihood of our success must be viewed in light of the delays,
expenses, problems and difficulties frequently encountered by an enterprise in
its development stage, many of which are beyond our control. We are subject to
all the risks inherent in the development and marketing of new products.

We Have Limited Resources To Devote To Product Development And
Commercialization.

Our strategy is to further develop our Electronic System Technology and to
pursue our Stationary System Technology Initiative. We believe that our revenue
growth and profitability, if any, will substantially depend upon our ability to:

         o   improve market acceptance of our current products;

         o   complete development of our new products;  and

         o   successfully introduce and commercialize our new products.

We have introduced our Mechanical System Technology into the marketplace only
recently and our other products are still under development. Because we have
limited resources to devote to product development and commercialization, any
delay in the development of one product or reallocation of resources to product
development efforts that prove unsuccessful may delay or jeopardize the
development of our other products or product initiatives. If we fail to develop
new products and bring them to market, our business could be substantially
harmed.

We May Experience Difficulty In Commercializing Our Products.

Because several of our current products, as well as a number of products under
development, are novel, we may need to expend substantial efforts in order to
educate our customers about the uses of our products and to convince them of the
need for our products. We cannot assure you that any of our products will
achieve satisfactory market acceptance or that we will successfully
commercialize them on a timely basis, or at all. If any of our products do not
achieve a significant level of market acceptance, our business could be
substantially harmed.

                                       25
<PAGE>

There is no Assurance Of Sales or Acceptance of our Products Which Have Only
Been Sold To Date On A Very Limited Basis.

The engine conversion kits we market and sell have been distributed only on a
limited basis during the last 6 years and no assurance can be given that we will
be able to market such products successfully on a wide-scale commercial basis or
that significant revenues will be generated from any such sales.

We Are and Will Continue to be Highly Dependent on the Success of Our Dealers.

Our business plan in respect of our vehicular products is structured in such a
way that our dealers, which resell our products to fleet operators and other
users, are actually our customers. We are, therefore, highly dependent on the
ability of our dealers to successfully market and sell our products in order for
our sales revenues to continue and to grow. If our dealers prove unable to sell
a quantity of product commensurate with our objectives or needs, it would have a
materially adverse effect on our business, financial condition and results of
operations.

Technological Change May Make Our Products Obsolete Or Difficult To Sell At A
Profit.

To date, the market for alternative fuel technology systems and equipment has
not, to our knowledge, been characterized by rapid changes in technology.
However, there can be no assurance that new products or technologies, presently
unknown to management, will not, at any time in the future and without warning,
render our dual fuel technology less competitive or even obsolete. Major
automobile and truck companies, academic and research institutions, or others,
for example, could develop new fuels or new devices which could be installed at
the original equipment manufacturer level and which could potentially render our
systems obsolete. Moreover, the technology upon which our dual fuel systems are
based could be susceptible to being analyzed and reconstructed by an existing or
potential competitor. Although the Company is the license holder of certain
United States patents respecting its proprietary dual fuel system, we may not
have the financial resources to successfully defend such patent, were it to
become necessary, by bringing patent infringement suits against parties that
have substantially greater resources than those available to us. We must
continue to create innovative new products and modifications to our existing
products reflecting evolving needs within our domain of expertise, and we must
meet be able to meet the financial demands associated with such continued
development. Failure to do so could prevent us from developing and maintaining a
significant market for our products.

In addition, competitors may develop technology and systems that can be sold and
installed at a lower per unit cost. There can be no assurance that we will have
the capital resources available to undertake the research which may be necessary
to upgrade our equipment or develop new devices to meet the efficiencies of
changing technologies. Our inability to adapt to technological change could have
a materially adverse effect on our results of operations.

The Lack Of Current Dealers Limits Our Ability To Market Our Products.

As of the date hereof, we are distributing our products exclusively through our
offices in Forest Park, Georgia and 12 independent dealers. We intend to
establish a network of dealers both domestically as well as internationally
through which we will market and sell our products. However, there can be no
assurance that we will be able to negotiate and enter into satisfactory dealer
agreements or, if negotiated and concluded, that such dealers will employ
qualified or competent personnel or that they will be able to obtain effectively
distribute our products. Until such time as we can establish a strong network of
domestic and international dealers, if ever, we must continue to rely on our
in-house staff and executives in our Forest Park office to develop a sales base
for our products.

Our Proprietary Technology May Not Be Adequately Protected From Unauthorized Use
By Others, Which Could Increase Our Litigation Costs.

Our ability to compete effectively will depend in part on our ability to develop
and maintain proprietary aspects of our technology and either to operate without
infringing the proprietary rights of others or to obtain rights to technology
owned by third parties. We have United States and foreign-issued patents and are
currently prosecuting patent applications in the United States and with various
foreign patent offices. We cannot assure you that any of our pending patent
applications will result in the issuance of any patents or that any issued
patents will offer

                                       26
<PAGE>

protection against competitors with similar technology. We cannot assure you
that any patents we receive will not be challenged, invalidated or circumvented
in the future or that the rights created by those patents will provide a
competitive advantage. We also rely on trade secrets, technical know-how and
continuing invention to develop and maintain our competitive position. We cannot
assure you that others will not independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to our trade
secrets.

We cannot assure you that we will not become subject to patent infringement
claims and litigation in the United States or other countries or interference
proceedings conducted in the United States Patent and Trademark Office to
determine the priority of inventions. The defense and prosecution of
intellectual property suits, USPTO interference proceedings, and related legal
and administrative proceedings are costly, time-consuming and distracting. We
may also need to pursue litigation to enforce any patents issued to us or our
collaborative partners, to protect trade secrets or know-how owned by us or our
collaborative partners, or to determine the enforceability, scope and validity
of the proprietary rights of others. Any litigation or interference proceeding
will result in substantial expense to us and significant diversion of the
efforts of our technical and management personnel. Any adverse determination in
litigation or interference proceedings could subject us to significant
liabilities to third parties. Further, as a result of litigation or other
proceedings, we may be required to seek licenses from third parties which may
not be available on commercially reasonable terms, if at all.

We Do Not Have Patent Or Other Intellectual Property Protection In Many
Countries Which Are Potentially Very Important Markets For Us.

Our products are most valuable in parts of the world having the worst air
pollution problems. Many cities and areas throughout the world which have the
worst air pollution problems are developing and/or third-world countries.
Although these countries represent very significant and important markets for
us, we do not currently have patent or other intellectual property protection in
many of these places. Moreover, given the legal systems in certain of these
countries, the ability to effectively pursue infringement initiatives or
remedies even if we had or were able to obtain such protection, could be very
limited. Any copying, reverse engineering or other unauthorized use of our
technology in one or more of these countries could result, directly or
indirectly, in a very significant loss of economic opportunity for us. Any such
loss could have a materially adverse effect on our business and prospects.

Our Success Depends On The Efforts Of, And Our Ability To Retain, Certain
Executive Officers And A Key Consultant, And To Attract And Retain Qualified
Personnel.

Our future success will be largely dependent on the personal efforts of Robby
Davis, an officer and director of the Company, and Frank Davis, a consultant to
the Company and the Technical Advisor to the Board of Directors. The loss of
either of such persons would have a material adverse effect on our business and
prospects. We have no key man life insurance on either individual.

Our success is further dependent upon our ability to attract, assimilate and
retain qualified employees and consultants. If we do not succeed in retaining or
motivating our current personnel or in recruiting and retaining additional
qualified employees, our business will be adversely affected and our abilities
to fulfill our business plan impaired. Competition for personnel in our
industry, particularly those with expertise, is intense, and there can be no
assurance that we will be able to attract and retain the necessary personnel or
that we will be able to afford them in terms of cash compensation, equity-based
incentives or other benefits. Any failure on our part to attract additional
qualified employees or to retain the services of key personnel is likely to have
a materially adverse affect on our business, results of operations, financial
condition and prospects.

We Have Limited Manufacturing Experience and Capacity and Rely Entirely on a
Single Supplier for our Manufacturing.

To be successful, we must manufacture, or contract for the manufacture of, our
current and future products in sufficient quantities and on a timely basis,
while maintaining product quality and acceptable manufacturing costs. Currently,
the control boxes and other key elements used for our conversion kits are
received from a single source, Ambac International Corporation, with whom we are
currently involved in a dispute over outstanding balances. Accordingly, should
anything happen to our supplier, or for some reason we are no longer able to
obtain the control boxes or other key elements from our supplier, we will not be
able to produce or will be delayed in producing

                                       27
<PAGE>


conversion kits for sale or distribution, which could cause delays in our
operation or sales or make continued operation or sales unprofitable.

Factors Beyond Our Control May Cause Our Operating Results To Fluctuate And Many
Of Our Expenses Are Fixed.

We believe that our future operating results will fluctuate on a quarterly basis
due to a variety of factors, including:

          o    the introduction of new products by us or by our competitors;

          o    patent protection availability;

          o    market acceptance of our current or new products;

          o    regulatory (emissions) certifications and other delays in product
               development;

          o    product recalls;

          o    competition and pricing pressures from competitive products;

          o    manufacturing delays;

          o    shipment problems;

          o    the performance of our dealers; and

          o    the results of training.

We anticipate having high operating expenses for personnel, new product
development and marketing. Many of these expenses are fixed in the short term.
If any of the factors listed above cause our revenues to decline, our operating
results could be substantially harmed.

We Are Subject To Risks In Our International Transactions And Operations.

We are subject to risks related to our international operations. We anticipate
that international sales will increasingly account for a significant portion of
our net sales and revenue. We intend to widen the scope of our license from the
Davis Family Trust and to expand our export sales to markets in Asia, Europe,
South America, Africa and the Middle East and to enter additional countries in
these international markets which may require significant management attention
and financial resources. Changes in existing regulatory requirements outside of
the United States or the adoption of new requirements in foreign countries could
have a material adverse effect on our business, financial condition and results
of operations. For instance, foreign governments may extend timetables
decelerating the time within which certain industries must comply with existing
regulations mandating the use of alternative fuels so that the industry will
grow at a much slower pace. Thus, our operating results will be increasingly
subject to risks related to international sales, including:

o Unexpected changes in regulatory requirements and tariffs;

o Considerably more complicated shipping and handling logistics;

o Difficulties in staffing and managing foreign operations;

o Longer payment cycles;

o Greater difficulty in accounts receivable collection;

                                       28
<PAGE>

o Operational difficulties in the handling of merchandise returns and exchanges;

o Potentially adverse tax consequences;

o Price controls or other restrictions on foreign currency; and

o Difficulties in obtaining export and import licenses.

 Additionally, gains and losses on the conversion of foreign payments into U.S.
 dollars based on fluctuating exchange rates may contribute to fluctuations in
 our results of operations and could lead to reduce gross revenue and/or gross
 margin figures from dollar-denominated international sales. If we are
 successful in generating significant international sales revenues, which we
 cannot assure, our inability to overcome or otherwise avoid negative
 consequences from any or a combination of these risks could have a materially
 adverse effect on our business, results of operations, financial condition and
 prospects.

We Must Manage Our Growth Effectively.

We anticipate that our business will grow as we develop and commercialize new
products, and that this growth will result in an increase in responsibilities
for both existing and new management personnel. In order to manage growth
effectively, we will need to continue to implement and improve our operational,
financial and management information systems, to train, motivate and manage our
current employees, and to hire new employees. We cannot assure you that we will
be able to manage our expansion effectively. Failure to do so could
substantially harm our business.

We May Face Increased Governmental Regulation and Legal Uncertainties.

We are not currently subject to direct regulation by any domestic or foreign
governmental agency, other than regulations applicable to businesses generally.
Regarding the conversion technology, the only regulations the equipment falls
into in certain regions of the US and certain regions of other countries is
emission related, e.g. EPA.

A Public Market For Our Shares May Not Be Sustained And The Price May Fluctuate.

Our stock is publicly traded in the "pink sheets" under the symbol "SOEI". The
closing bid price as of March 29, 2001 was $0.30. There can be no guarantee that
the current price can be maintained or be expected to increase in value.
Although there can be no assurance, as a result of certain actions we have
either already taken or are in the process of taking, including working in
connection with a certain market maker to cause the filing of a Form 211 with
the Securities Exchange Commission, we expect to become listed on the OTC
Bulletin Board maintained by NASDAQ within several months. If for any reason our
common stock does not become listed on the OTC Bulletin Board, or if it becomes
listed and at some point thereafter is no longer listed, purchasers of the
shares may have difficulty selling their common stock should they desire to do
so. In either case, we intend to apply to have our common stock approved for
quotation on the NASDAQ SmallCap Market at such time, in the future, that it
meets the requirements for inclusion. As of the date hereof, however, the
Company is not eligible for inclusion on NASDAQ or for listing on any national
stock exchange. All companies applying and authorized for NASDAQ are required to
have not less than $4,000,000 in net tangible assets, a public float with a
market value of not less than five million dollars, and a minimum bid of price
of $4.00 per share. At the present time, the Company is unable to state when, if
ever, it will meet the NASDAQ application standards. Unless the Company is able
to increase its net worth and market valuation substantially, either through the
accumulation of surplus out of earned income or successful capital raising
financing activities, it will never be able to meet the eligibility requirements
of NASDAQ.

Unless An Active Public Trading Market Develops For Our Securities, You May Not
Be Able To Sell Your Shares

To date, there has been a very limited public market for our Common Stock, and
until such time as we are able to become listed on a national exchange or on the
NASDAQ Stock Market, if at all, there will continue to be only very limited
public trading market for our Common Stock. There can be no assurance, moreover,
that an active trading

                                       29
<PAGE>


market will ever develop or, if developed, that it will be maintained. Failure
to develop or maintain an active trading market could negatively affect the
price of our securities.

Our Common Stock May be Subject to Penny Stock Regulation.

At the present time, our common stock is not listed on The OTC Bulletin Board,
The NASDAQ SmallCap Stock Market, the NASDAQ National Market, or on any stock
exchange. Although dealer prices for our common stock are listed in the "Pink
Sheets", trading has been sporadic and very limited since such quotations first
appeared on December 17, 1996.

The Securities Enforcement and Penny Stock Reform Act of 1990 requires special
disclosure relating to the market for penny stocks in connection with trades in
any stock defined as a "penny stock". Securities Exchange Commission
("Commission") regulations generally define a penny stock to be an equity
security that has a market price of less than $5.00 per share and is not listed
on The NASDAQ SmallCap Stock Market, The NASDAQ National Market or a major stock
exchange. These regulations subject all broker-dealer transactions involving
such securities to the special "Penny Stock Rules" set forth in Rule 15g-9 of
the Securities Exchange Act of 1934 (the "34 Act"). These Rules affect the
ability of broker-dealers to sell the Company's securities and also may affect
the ability of purchasers of the Company's common stock to sell their shares in
the secondary market, if such a market should ever develop. The current market
price of the our common stock is substantially less than $5 per share and such
stock can, for at least for the foreseeable future, be expected to continue to
trade in the over-the-counter market at a per share market price of
substantially less than $5. Accordingly, any broker-dealer sales of our common
shares will be subject to the Penny Stock Rules.

The Penny Stock Rules also impose special sales practice requirements on
broker-dealers who sell such securities to persons other than their established
customers or "Accredited Investors". Among other things, the Penny Stock Rules
require that a broker-dealer make a special suitability determination respecting
the purchaser and receive the purchaser's written agreement to the transaction
prior to the sale. In addition, the Penny Stock Rules require that a
broker-dealer deliver, prior to any transaction, a disclosure schedule prepared
in accordance with the requirements of the Commission relating to the penny
stock market. Disclosure also has to be made about commissions payable to both
the broker-dealer and the registered representative and the current quotations
for the securities. Finally, monthly statements have to be sent to any holder of
such penny stocks disclosing recent price information for the penny stock held
in the account and information on the limited market in penny stocks.
Accordingly, for so long as the Penny Stock Rules are applicable to our common
stock, it may be difficult to trade such stock because compliance with such
Rules can delay and/or preclude certain trading transactions. This could have an
adverse effect on the liquidity and/or price of our common stock.

We May Issue Preferred Stock With Certain Preferences May Depress Market Price
Of The Common Stock.

The Board of Directors may designate a series or classes of preferred shares
without shareholder consent which designations may give the holders of the
preferred stock, if previously issued, voting control and other preferred rights
such as to liquidation and dividends. The authority of the Board of Directors to
issue such stock without shareholder consent may have a depressive effect on the
market price of our Common Stock even prior to any such designation or issuance
of preferred stock. Any such issuance of shares of preferred stock, under
certain circumstances, could have the effect of delaying or preventing a change
in control of Save or other take-over attempt and could adversely materially
affect the rights of holders of shares of our Common Stock.

We Do Not Plan To Pay Cash Or Stock Dividends.

We have never paid any cash dividends on our Common Stock and we anticipate
that, for the foreseeable future, we will continue to retain any earnings for
use in the operation of our business and do not intend to pay cash or stock
dividends. Any payment of dividends in the future will be at the discretion of
our board of directors.

We May Infringe On The Proprietary Intellectual Rights Of Others.

Although we are not aware of any pending or threatened claims, we cannot assure
that third parties will not bring claims of patent, copyright, or trademark
infringement against us. Any claims of infringement, with or without

                                       30
<PAGE>


merit, could be time consuming to defend, result in costly litigation, divert
management's attention, require us to enter into costly royalty or licensing
arrangements or prevent us from using important technologies or methods, any of
which are likely to have a materially adverse effect on our business, results of
operations, financial condition and prospects.

        RISKS ASSOCIATED WITH OUR INDUSTRY

Competition From Companies With Already Established Marketing Links To Our
Potential Customers May Adversely Effect Our Ability To Market Our Products.

As the time to comply with federal and state regulations relating to emissions
and fuel efficiency approaches, so too does the universe of entities seeking to
develop and market products such as those we sell. A very limited number of
companies presently are marketing dual fuel conversion kits. In addition,
automobile and truck manufacturers may develop and install similar proprietary
devices as original equipment. Unless we are able to become a licensor to such a
group or groups, any such occurrence could have a materially adverse effect on
our business.

We expect our competition to intensify. Although competitors are limited,
several current and potential competitors have longer operating histories,
larger customer bases, greater brand name recognition and significantly greater
financial, marketing and other resources than we have. Certain of our
competitors may be able to secure product from vendors on more favorable terms,
devote greater resources to marketing and promotional campaigns, and adopt more
aggressive pricing or inventory availability policies, than we will. There can
be no assurance that we will be able to compete successfully against current and
future competitors, and competitive pressures faced by us are likely to have a
materially adverse affect on our business, results of operations, financial
condition and prospects.

Competition Utilizing Other Energy Sources May Adversely Affect Our Ability To
Market Our Products.

The current regulatory emphasis on lowering engine emissions is an economic
incentive for developing non-petroleum based or decreased hydrocarbon emitting
power sources, some of which may be superior to ours or may well be selected by
converters, states or federal agencies, regardless of superiority. In this
regard, we are also competing against manufacturers of electric vehicles and
against vehicles which rely on other fuel sources such as solar power or
hydrogen. Electric cars have been in development for many years and have been
tested extensively and some manufacturers are selling such vehicles on a
commercial basis.

Resistance To Our Products By Major Oil Companies May Adversely Affect Our
Ability To Market Our Products.

The major oil companies remain a powerful and formidable lobby. Our products
directly contest the continued use of large quantities of petroleum based
products (gasoline and diesel fuel) and we and others in the industry may face
obstacles to our success imposed by pressures asserted by the major oil
companies. We are unable to predict whether or not the oil companies will
present any significant impediments to the continued growth and overall success
of the industry in which we are engaged.

Safety Concerns in Connection with Alternative Fuels and our Products Generally,
and our Limited Liability Insurance May Adversely Affect our Ability to Conduct
Business.

Liquefied natural gas is highly flammable and may present risk in the event of a
collision involving the storage tanks. These concerns may make marketing our
products more difficult at any point in time. Further, an accident or
catastrophe could adversely affect our ability to conduct business in view of
our limited insurance. Although we have obtained liability insurance from a
"Best" A rated insurance carrier, our coverage is only in the gross amount of $2
million in the aggregate during any one year and $1 million per event to cover
accidents or other liability incurred as a result of a malfunction of our
products. There is no assurance that coverage in this amount will be sufficient
to meet all claims which we may face in respect of our products, particularly in
the event of any serious bodily harm or property damage as a result of defects
or flaws in the products. In the event the amount of any claim or claims in the
aggregate exceeds the amount of our liability insurance, we may be required,
among other possible scenarios, to remit all revenues to claimants which may
force us to cease operations.

                                       31
<PAGE>

The Limited Availability Of Alternative Fuels Can Hinder Our Ability To Market
Our Products.

Alternative fuel engines have been commercially available in the past; however,
the most significant impediment to the growth in the market for alternative fuel
vehicles traditionally has been the limited availability of alternative fuel
fueling locations (stations) for natural gas and propane. The success of engines
based on alternative fuels will probably be directly affected by the development
of the fueling infrastructure of the natural gas industry and the widespread
availability of such fuel sources. In all events, our business and the market
for alternative fuel vehicles would benefit substantially from the growth of the
infrastructure of the natural gas industry and the more widespread availability
of alternative fuels. Conversely, our business and the market for alternative
fuel vehicles would be substantially hurt by a diminished or lack of growth of
the infrastructure of the natural gas industry and the less widespread
availability of alternative fuels.

ITEM 7.  FINANCIAL STATEMENTS

Our financial statements, required to be included in this Report pursuant to
Item 310(a) of Regulation S-B, are incorporated by reference to the Financial
statements filed with this report.

ITEM 8.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There was no resignation or dismissal of our principal independent accountant
during the two most recent fiscal years and the interim period subsequent
thereto.

                                    PART III

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

Our directors and executive officers and their ages as of January 2001 are as
follows:

Name                    Age      Position and Office Held
Robby E. Davis          31       President, Chief Executive Officer and Director
Ricky Davis             38       Chief Financial Officer and Treasurer
Jeffrey F. Davis        36       Vice President, Secretary and Director
Edward C. Kramer        49        Director

Each of the above individuals, became an officer and director of Save in
connection with its organization, except Edward C. Kramer who became a director
in 1998. The term of office of each officer and director is one year and until
his successor is elected and qualified.

        Biographical Information

Set forth below is certain biographical information for each of the Company's
officers and directors.

Robby E. Davis. President, Chief Executive Officer and Director since 1996.
Prior to the formation of Save, Mr. Davis was employed by Combustion Labs, Inc.
for 10 years as a senior technician installing natural gas and dual fuel
conversion kits in diesel and gasoline vehicles. He is an ASSE Certified Natural
Gas Technician and has attended numerous business and technical seminars. Davis
studied Business Administration at Clayton State College.

Ricky Davis. Chief Financial Officer and Treasurer since 1996. Prior to joining
Save, Mr. Davis was employed by Combustion Labs, Inc. for three years as a
technician working with gasoline to natural gas conversions, for four years as
the Office Manager of a large mechanical contractor and ran his own
mechanical/electrical contracting business for 6 years. He studied Business
Management and Marketing at Griffin Area Tech, and has attended many seminars on
computer operations and accounting.

                                       32
<PAGE>

Jeffrey F. Davis. Vice President, Secretary and Director since 1996. Prior to
joining Save, Mr. Davis was employed by Clayton County, Georgia, working
primarily in the transportation and development group. He holds an AA degree in
Business Administration from Clayton State College where he was named to the
deans list.

Edward C. Kramer. Director since 1998. Mr. Kramer is a partner of the New York
law firm of Kramer & Kramer. He received an A.B. degree from the University of
Pennsylvania in 1973 and a J.D. degree from the Columbia University School of
Law in 1976. He first became admitted to the New York Bar in 1977 and is
admitted to practice in the Southern and Eastern Districts of New York, the
Second Circuit Court of Appeals and the Supreme Court. Since 1991, Mr. Kramer
has practiced law as a partner in the New York City based law firm of Kramer &
Kramer, LLP.

        Significant Consultant

Frank Davis. Product Research and Development Coordinator since 1996. Mr. Davis
presently serves in a consulting capacity and is responsible for certain
technical development, including the drive-by-wire engine conversion kits, as
well as many general business and strategic matters. In 1980, he founded, and
until 1996 served, as Chief Executive Officer of Combustion Labs, Inc., where he
conducted research and development related to converting gasoline and diesel
engines to run on natural gas or bifuel. Frank Davis is the father of Robby F.
Davis, Jeffrey Davis and Ricky Davis. In the first quarter of 2000, Patricia
Davis, wife of Frank Davis, received 100,000 shares of common stock in
satisfaction of consulting fees we owed him.

ITEM 10.   EXECUTIVE COMPENSATION.

The Company did not have any executive officers whose annual compensation was
more than $100,000 for the fiscal year ended December 31, 2000. The Board of
Directors and stockholders of the Company have ratified and approved the
Electronic Fuel Control, Inc. 1996 Stock Option Plan (the "Plan") for which the
Company has reserved 500,000 shars of Common stock for issuance upon the
exercise of qualified and non-qualified stock options granted under the Plan to
employeees, advisors, consultants and Directors of the Company at prices and on
terms which have not been determined. As of December 31, 2000 no options had
been issued under the Plan.

The following table sets forth summary information regarding compensation paid
by the Company for the years ended December 31, 1998, 1999 and 2000 to the chief
executive officer of the Company.


                                                                    Other Annual
Name and Principal Position           Year       Salary     Bonus   Compensation
---------------------------           ----       ------     -----   ------------

Robby E. Davis                        2000      $41,965    $2,000        0
   President and Chief Executive      1999      $39,811    $2,000        0
   Officer                            1998      $40,197    $1,500        0

        Director Compensation

We do not currently maintain any policy for compensating, or reimbursing
expenses to, non-officer directors for attendance at meetings, and no
non-officer directors received any such compensation or expense reimbursement.

        Information Concerning Stock Options

The Company did not grant stock options to the named executive officers during
the fiscal year ended December 31, 2000.

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

The following table sets forth, as of April 24, 2001, the beneficial ownership
of the Company's Common Stock by (i) the only persons who own of record, or who
are known to own beneficially, more than 5% of the Company's Common Stock, (ii)
each director and executive officer of the Company, and (iii) all directors and
officers as a group. On April 24, 2001, the Company had 3,589,200 shares of
common stock issued and outstanding. Unless otherwise indicated, the address of
each stockholder is the address of the Company, which is 4851 Georgia Highway 85
Suite 211 Forest Park, Georgia 30050.

                                       33
<PAGE>

                                                                      Percent of
Name                                       Number of Shares      Outstanding
                                                                    Common Stock
Directors, Nominees and Named Executive
Officers:
Robby E. Davis (1).....................        357,000               9.95%
Jeffrey Davis (1)......................        357,000               9.95%
Ricky Davis (1)........................        357,000               9.95%
Edward C. Kramer.......................              0                 0%
Officers and Directors as a group
(four persons).........................      1,071,000              29.85%

5% Stockholders:
Davis Family Trust (2).................        358,000               9.97%
   c/o Mark Crouch - Trustee
   P.O. Box 5 02287
   Atlanta, GA  31150
Kerry Davis (1).......................         357,000               9.95%
Lanier M. Davenport (3)................        300,000               8.36%
   P.O. Box 178
   Lookout Mountain, TN 37350
Success Unlimited......................        203,200               5.66%
--------------------------------------

(1)  Robby E. Davis, Jeffrey Davis, Ricky Davis, and Kerry Davis are siblings
     and children of Frank Davis, consultant to Save, and each disavows
     beneficial ownership of, or control over, the shares of common stock owned
     by their parents and siblings.

(2) All members of the Davis family associated with Save disavow beneficial
ownership or control over this trust.

(3) An additional 120,000 shares are held equally (40,000 shares each) in the
names of Starr S. Davenport c/f Lanier M. Davenport, Jr., Starr S. Davenport c/f
Sarah Byrd Davenport and Starr S. Davenport c/f Steven Ray Davenport, all of
which beneficial ownership is disavowed by Lanier M. Davenport.

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

        Licensing Agreement with the Davis Family Trust

All of the technology, know-how, devices and apparatus embodied in the patents
and incorporated into the various products sold by us were developed and
patented by Frank Davis or Frank Davis and Robby E. Davis and assigned to the
Davis Family Trust, an irrevocable trust established by Mr. Davis for the
benefit of his family and which is administered by an independent third party.
Pursuant to an agreement dated May 13, 1996, the trust granted a license to us
to exploit the patents throughout certain territories for the life of the
patents, seventeen years, plus any extension thereof, including the right to
market and sell any and all products developed therefrom or to grant, licenses
to others to manufacture and sell any such products, subject to the approval of
the trustee of the trust (the "License Agreement").

In consideration for the License Agreement, we executed a promissory note for
$150,000 (the "Promissory Note") pursuant to which we are required to pay a
royalty of $21 per patent per unit sold during the life of four of the patents
and $150 per unit sold on a fifth patent for a dual fuel control system
(collectively, the "Original Royalties"), which amounts are subject to
adjustment annually to reflect changes in the consumer price index. In
accordance with the terms of the License Agreement, the Original Royalty is
increased at certain points by an amount equal to $79 per patent per unit (the
"Additional Royalty"). The Additional Royalty shall be payable until such time
as the amount of any Additional Royalty generated from the sale of units shall
aggregate $150,000 plus accrued interest calculated at the rate of 12% per
annum. After such time as this amount is paid, the royalty reverts to the
original royalty as adjusted to reflect increases in the consumer price index.

                                       34
<PAGE>


To date, the License Agreement has been amended twice. First, on June 18, 1998,
to provide that the $150,000 promissory note would be satisfied by the payment
of $42,576.10 on July 31, 1998 and the delivery to the trust of 108,000 shares
of our common stock. Second, on January 3, 2000, in consideration of 250,000
shares of our common stock, the License Agreement was amended to (i) restrict
the license rights to the United States, Canada, Mexico and Egypt, and (ii)
eliminates all quotas as specified in the original agreements.

        Relationship with Kramer & Kramer, LLP

Edward Kramer, a member of our Board of Directors, is a partner in the law firm
of Kramer & Kramer, LLP. In connection with the rendering of past services by
Kramer & Kramer, and as of April 27, 2001, we were in discussions with Mr.
Kramer regarding an issuance of common stock, the precise number of shares of
which has not yet been determined.

        Agreement with International Fuel Systems, Inc.

On June 24, 1999, we entered into a certain agreement (the "IFS Agreement") with
International Fuel Systems, Inc., a Tennessee corporation ("IFS") owned or
otherwise controlled by Lanier M. Davenport, an individual who owned, as of
April 24, 2001, 300,000 shares of Save common stock. The IFS Agreement was
amended as of January 7, 2000, and ,as amended, provided for (i) an issuance by
the Company of 600,000 shares of our common stock to various designees of IFS,
together with both piggy-back and demand registration rights, (ii) a purchase by
IFS of an additional 200,000 shares of our common stock at a price of $0.75 per
share, such shares to be issued to various designees of IFS, and such funds to
be applied to the repayment of certain then outstanding debt owed by us pursuant
to certain notes, and (iii) IFS agreed to attempt to identify and secure OEM
customers for our products in exchange for which it would have received certain
additional common stock issuances (which never occurred).

All of the shares issued under the IFS Agreement have been registered pursuant
to the SB-2 filed by us January 16, 2001.



                                       35
<PAGE>


                                     PART IV

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

(a) Exhibits:

Exhibit
No.      Description of Exhibit

3.1  Articles of Incorporation of Save On Energy , Inc., incorporated by
     reference to Exhibit 3.1 to the SB-2 filed on March 23, 2000.

3.2  Amendment to Articles of Incorporation of Save On Energy, Inc.,
     incorporated by reference to Exhibit 3.2 to the SB-2 filed on March 23,
     2000.

3.3  By-laws of Save On Energy, Inc., incorporated by reference to Exhibit 3.3
     to the SB-2 filed on March 23, 2000.

10.1 License Agreement by and between the Davis Family Trust and Electronic Fuel
     Control, Inc. dated May 13, 1996, incorporated by reference to Exhibit 10.1
     to the SB-2 filed on March 23, 2000.

10.2 Amendment to License Agreement by and between the Davis Family Trust and
     Electronic Fuel Control, Inc, dated June 18, 1998, incorporated by
     reference to Exhibit 10.2 to the SB-2 filed on March 23, 2000.

10.3 Amendment to License Agreement by and between the Davis Family Trust and
     Electronic Fuel Control, Inc. dated January 3, 2000, incorporated by
     reference to Exhibit 10.3 to the SB-2 filed on March 23, 2000.

10.4 Consulting Agreement between Save on Energy, Inc. and MBO, Inc. dated
     November 23, 1999, Trust and Electronic Fuel Control, Inc, incorporated by
     reference to Exhibit 10.4 to the SB-2 filed on March 23, 2000.

10.5 Exclusive Supply Agreement between Ambac International Corporation and
     Electronic Fuel Control, Inc. dated April 29, 1996, incorporated by
     reference to Exhibit 10.5 to the SB-2 filed on March 23, 2000.

10.6.1 Agreement re: International Fuel Systems, Inc. and Davenport, dated
     January 7, 2000, incorporated by reference to Exhibit 10.6 to the SB-2
     filed on March 23, 2000.


(b) Reports on Form 8-K

The Company did not file any reports on Form 8-K during the fourth quarter of
2000.


                                       36
<PAGE>



                                   Signatures

 In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this Amendment to its report on 10-KSB to be signed on its behalf by the
undersigned, thereunto duly authorized.


SAVE ON ENERGY, INC.



By:_/S/_Robby E. Davis______
   -------------------------

Name: Robby E. Davis

Title:   President


Date: April 27, 2001


 Pursuant to the requirements of the Securities and Exchange Act of 1934, 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/___Robby E. Davis_   President,  Chief Executive Officer      April 27, 2001
----------------------
Robby E. Davis        (principal executive officer) and Director)

_/S/__Jeffrey F. Davis   Vice President, Secretary and Director   April 27, 2001
----------------------
Jeffrey F. Davis


_/S/__Ricky Davis____   Treasurer, Chief Financial Officer and    April 27, 2001
---------------------   Director
Ricky Davis




                                       37
<PAGE>








                              SAVE ON ENERGY, INC.

                    (FORMERLY ELECTRONIC FUEL CONTROL, INC.)
                      (A COMPANY IN THE DEVELOPMENT STATE)

                              FINANCIAL STATEMENTS

                                DECEMBER 31, 2000



                                       38
<PAGE>





                              SAVE ON ENERGY, INC.
                    (FORMERLY ELECTRONIC FUEL CONTROL, INC.)
                          INDEX TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2000



Report of Independent Accountants

Financial Statements

      Balance Sheets                             Exhibit "A"

      Statements of Operations                   Exhibit "B"

      Statement of Stockholders' Equity          Exhibit "C"

      Statements of Cash Flows                   Exhibit "D"

Notes to Financial Statements

Supplementary Information

      Cost of Sales                              Schedule "1"

      Operating Expenses                         Schedule "2"

      Other Deductions                           Schedule "3"








                                       39
<PAGE>




To the Stockholders of
Save On Energy, Inc.
4851 Georgia Highway 85
Forest Park, Georgia 30050

Report of Independent Accountants

      We have audited the accompanying balance sheets of Save On Energy, Inc.,
(Formerly Electronic Fuel Control, Inc.), a development stage company, as of
December 31, 2000 and 1999, and the related 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 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 amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Save on Energy, Inc. as of
December 31, 2000 and 1999, and the results of operations and its cash flows for
the years then ended, in conformity with generally accepted accounting
principles.

 The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 8 of the
financial statements, the Company has suffered recurring losses from operations
in its developmental stage. This condition raises substantial doubt about its
ability to continue as a going concern. Management's plans regarding these
matters are also described in Note 8. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
      Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules of cost of sales, operating
expenses and other income and expense are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.


                                    JACK KANE & COMPANY, P.C.




March 23, 2001

                                       40
<PAGE>


                                   EXHIBIT "A"
                              SAVE ON ENERGY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                                 BALANCE SHEETS
                                  DECEMBER 31,




                                     ASSETS

                                                               2000       1999
                                                           --------   --------

Current assets
     Cash                                                  $ 14,207   $135,766
     Accounts receivable, net (Note 2)                       28,688     22,773
     Inventory                                              158,335    110,830
                                                           --------   --------
                                    Total current assets    201,230    269,369
                                                           --------   --------

Property, plant and equipment
     Equipment and leasehold improvements                   130,335     91,624
     Less: accumulated depreciation                          78,438     58,578
                                                           --------   --------
                                    Net fixed assets         51,897     33,046
                                                           --------   --------

Other assets
     Long term notes receivable                                --       22,500
     Licenses, (Note 3)                                        --         --
                                                           --------   --------
                                    Total other assets         --       22,500
                                                           --------   --------

                                    Total assets           $253,127   $324,915
                                                           ========   ========







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




                                       41
<PAGE>





                                   EXHIBIT "A"
                                   (Continued)
                              SAVE ON ENERGY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                                 BALANCE SHEETS
                                  DECEMBER 31,


                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S>                                                            <C>           <C>
                                                                       2000           1999
                                                                -----------    -----------

Current liabilities
     Notes and loans payable (Note 4)                           $   572,618    $   443,500
     Accounts payable                                               250,826         39,569
     Taxes payable                                                  216,838         80,558
     Accrued loss on litigation (Note 11)                           125,000        125,000
     Accrued expenses                                               181,784         44,507
                                                                -----------    -----------
                                    Total current liabilities     1,347,066        733,134
                                                                -----------    -----------

Non-current liabilities
     Non-current portion of notes and loans payable
     (Note 4)                                                        21,996           --
                                                                -----------    -----------

Commitments and contingencies (Note 8)                                 --             --

Stockholders' equity (Note 7)
     Preferred stock, $.01 par value,
     authorized 5,000,000 shares, none issued                          --             --
     Common stock, $.001 par value,
     authorized 20,000,000 shares,
     3,406,000 and 2,136,000 shares issued                            3,406          2,136
     Additional paid in capital                                   1,421,223      1,188,575
     Deficit accumulated during the development stage            (2,540,564)    (1,598,930)
                                                                -----------    -----------

                                    Total stockholders'
                                    (deficit) equity             (1,115,935)      (408,219)
                                                                -----------    -----------

                                    Total liabilities and
                                    stockholders' equity        $   253,127    $   324,915
                                                                ===========    ===========
</TABLE>

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


                                       42
<PAGE>




                                   EXHIBIT "B"
                              SAVE ON ENERGY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                            STATEMENTS OF OPERATIONS
                            YEARS ENDED DECEMBER 31,




                                                            2000           1999
                                                     -----------    -----------

Sales                                                $   288,874    $   560,124

Cost of sales (Schedule "1")                             173,265        329,791
                                                     -----------    -----------

                                    Gross profit         115,609        230,333

Operating expenses (Schedule "2")                        926,996        681,918
                                                     -----------    -----------

                                    Operating loss      (811,387)      (451,585)

Other income and expense (Schedule "3")                  130,247        158,013
                                                     -----------    -----------

                                    Net loss         $  (941,634)   $  (609,598)
                                                     ===========    ===========

Net loss per weighted average share, basic           $      (.22)   $      (.20)
                                                     ===========    ===========

Net loss per weighted average share, diluted         $      (.22)   $      (.20)
                                                     ===========    ===========

Weighted average shares, basic                         4,199,051      2,972,400

Weighted average shares, diluted                       4,516,804      3,033,530









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



                                       43
<PAGE>





                                   EXHIBIT "C"
                              SAVE ON ENERGY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                       STATEMENTS OF STOCKHOLDERS' EQUITY
                                  DECEMBER 31,

<TABLE>
<S>                               <C>         <C>          <C>           <C>

                                                                               Deficit
                                                                             Accumulated
                                     Common                    Additional      During
                                      Stock                    Paid - in     Development
                                     Shares        Amount       Capital         Stage

Balance, January 1, 1999           2,136,000   $     2,136   $ 1,055,575   $  (989,332)
Increase in additional paid in
capital                                 --            --         133,000          --
Net loss                                --            --            --        (609,598)
                                               -----------   -----------   -----------

Balance, December 31, 1999         2,136,000         2,136     1,188,575    (1,598,930)

Increase in additional paid in
capital                            1,270,000         1,270       232,648          --
Net loss                                --            --            --        (941,634)
                                               -----------   -----------   -----------

Balance, December 31, 2000         3,406,000   $     3,406   $ 1,421,223   $(2,540,564)
                                 ===========   ===========   ===========   ===========



Additional disclosure for
development stage companies

    Common stock issued:
    At par                         1,536,000         $1,53    $       -0-
    For services                     886,000           886        99,914
    From private offering            984,000           984     1,321,309
                                  -----------   -----------   -----------

                                   3,406,000   $     3,406   $ 1,421,223
                                  ===========   ===========   ===========
</TABLE>







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


                                       44
<PAGE>


                                   EXHIBIT "D"
                              SAVE ON ENERGY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                            STATEMENTS OF CASH FLOWS
                            YEARS ENDING DECEMBER 31,



                                                              2000         1999
                                                         ---------    ---------
Cash flows from operating activities
     Net loss                                            $(941,634)   $(609,598)
     Adjustments to reconcile net loss to net cash
     (used in) operating activities:
         Depreciation and amortization                      19,860       17,317
     Changes in assets and liabilities:
         (Increase) decrease in accounts receivable, net    (5,915)      69,395
         (Increase) decrease in inventory                  (47,505)     104,119
         Decrease in long term notes receivable             22,500       66,228
         Increase (decrease) in accounts payable           211,257      (67,886)
         Increase in taxes payable                         136,280       32,684
         Increase in accrued litigation loss                  --        125,000
         Increase in accrued expenses                      137,277        3,593
                                                         ---------    ---------

                                Net cash used in
                                  operating activities    (467,880)    (259,148)
                                                         ---------    ---------

Cash flows from investing activities
     Purchase of fixed assets                              (38,711)        --
                                                         ---------    ---------






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


                                       45
<PAGE>


                                   EXHIBIT "D"
                                   (Continued)
                              SAVE ON ENERGY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                            STATEMENTS OF CASH FLOWS
                            YEARS ENDED DECEMBER 31,
<TABLE>
<S>                                                          <C>           <C>

                                                                     2000           1999
                                                              -----------    -----------
Cash flows from financing activities
     Proceeds from convertible loans                              230,000        150,000
     Payment of notes payable                                    (153,500)          --
     Net proceeds from equipment loan                              26,948           --
     Proceeds from short term working capital loans                39,666           --
     Increases in line of credit                                    8,000         90,000
     Increase in additional paid in capital                       232,648        133,000
     Issuance of capital stock                                      1,270           --
                                                              -----------    -----------

                                    Net cash provided by
                                    financing activities          385,032        373,000
                                                              -----------    -----------

                                    Net (decrease) increase
                                    in cash                      (121,559)       113,852

Cash, at beginning                                                135,766         21,914
                                                              -----------    -----------

Cash, at end                                                  $    14,207    $   135,766
                                                              ===========    ===========

Supplementary information

Cash paid during the year for
     Interest                                                 $    22,221    $    29,290
     Income taxes                                                    --             --

Additional disclosure for development state companies
     Cumulative amounts since inception
         Net cash used in operating activities                $(1,701,940)   $(1,234,060)
         Net cash used in investing activities                   (132,536)       (93,825)
         Net cash provided by financing activities              1,848,683      1,463,651
                                                              -----------    -----------

                                                              $    14,207    $   135,766
                                                              ===========    ===========
</TABLE>


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

                                       46
<PAGE>


                              SAVE ON ENERGY, INC.
                    (FORMERLY ELECTRONIC FUEL CONTROL, INC.)
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2000


1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization
Save On Energy, Inc. ("the Company") was incorporated in Georgia on April 1,1996
to manufacture and market retrofit systems for the conversion of gasoline and
diesel engines to non-petroleum based fuels such as compressed natural gas The
Company acquired the exclusive right in North America to exploit the patents
relating to the retrofit devices pursuant to a license ("the License") acquired
on June 1, 1996. On January 3, 2000, the License was restricted to the United
States, Canada, Mexico and the Nation of Egypt in exchange for a modification of
the appertaining royalty agreement and an issuance of 250,000 shares of
additional stock.

On April 29, 1998, the Company filed Articles of Amendment of Certificate of
Incorporation in the office of the Secretary of State of Georgia changing its
name to Save On Energy, Inc.

The Company is a Development Stage Company as defined in Financial Accounting
Standards Board Statement No. 7. During 2000 and 1999, the Company devoted
substantially all of its efforts to establishing a new business.

Basis of Presentation
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 assets
and liabilities as of the date of the financial statements and results of
operations for the reporting period. Actual results could differ from those
estimates.

Concentration of Credit Risk
 The Company occasionally maintains deposits in excess of federally insured
limits. Statement of Financial Accounting Standards No. 105 identifies these
items as a concentration of credit risk requiring disclosure, regardless of the
degree of risk. The risk is managed by maintaining all deposits in high quality
financial institutions.

Cash and Cash Equivalents
For the purpose of reporting cash flows, cash includes cash on hand and savings
accounts.

Inventory
Inventory is stated at the lower of cost, determined on the first-in, first-out
(FIFO) method, or market.



                                       47
<PAGE>
Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is provided for
in amounts sufficient to relate to the cost of depreciable assets to operations
over their estimated service lives principally by the straight-line method.
Maintenance, repairs and minor improvements are charged to operations as
incurred. Renewals and betterments, which materially increase the value of
property, are capitalized.

Income Taxes
Income taxes are provided for the tax effect of transactions reported in the
financial statements and consists of taxes currently due plus deferred taxes.
Deferred taxes are recognized for differences between the basis of assets and
liabilities for financial statements and income tax purposes. The differences
are related primarily to allowance for doubtful receivables (deductible for
financial statement purposes but not for income tax purposes). The deferred tax
assets and liabilities represent the future tax consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. Deferred taxes are also recognized for
operating losses and tax credits that are available to offset taxable income,
and reduced by the portion of deferred taxes not likely to be realized.

2. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consists of the following:

                                                       2000      1999
                                                    -------   -------
            Accounts receivable                     $35,838   $23,218
            Interest receivable                        --       4,180
            Other receivable                           --         375
                                                    -------   -------
                                                     35,838    27,773
            Less: allowance for doubtful accounts     7,150     5,000
                                                    -------   -------
                                                    $28,688   $22,773
                                                    =======   =======



                                       48
<PAGE>



3. LICENCES
The License gives the Company the exclusive rights, as amended below, to utilize
and exploit five patents including marketing and selling products and granting
sublicenses to others. In addition, the Company has the first option to acquire
the License for the same patents in other countries where it has not year been
granted. The underlying patents were developed by the Company's President or the
Company's Chief Consultant and have since been assigned to a trust ("the Trust"
or "Licensor") the beneficiaries of which are all related to the Chief
Consultant.

In consideration for the License, the Company executed a promissory note for
$150,000 and is required to pay a royalty of $21 per patent per unit sold during
the life of four of the patents and $150 per unit sold on a fifth patent for a
dual fuel control system, adjusted annually to reflect changes in the consumer
price index. Substantially all of the units sold require payments under two
patents. Under the Terms of the License, the royalty shall be increased by an
amount equal to $79 (the "Additional Royalty") per patent per unit. The
Additional Royalty shall be payable until such time as the amount of Additional
Royalty generated from the sale of units shall aggregate $150,000 plus accrued
interest calculated at the rate of 12% per annum. When said sum is paid, the
royalty shall revert to the original royalty as adjusted to reflect increases in
the consumer price index.

The promissory note was marked paid and returned on June 18, 1998
inconsideration o an issuance of 108,000 shares of the Company's stock.

The license agreement was amended on January 3, 2000. The amendment Restricts
the license rights to the United States, Canada, Mexico and Egypt, and
eliminates all quotas as specified in the original agreements. In exchange for
this amendment the Company issued 250,000 shares of voting stock to the Trust.



                                       49
<PAGE>



4. NOTES AND LOANS PAYABLE

An analysis of notes and loans payable is set forth below:
<TABLE>
<S>                                                                     <C>         <C>

                                                                              2000       1999
                                                                          --------   --------
A. Revolving loan payable to Peachtree National Bank, dated 1998 plus interest
at 8/75%, renewed in 1999 at 10.5% per annum and 2000 at prime plus 2% per
annum. The bank holds security interest in the Company's equipment, accounts
receivable and
share in the company stock                                                $148,000   $140,000

B. Convertible notes payable to holders of Warrants, dated 1998,
plus interest at 9% convertible at $4.00 per share paid in the
year ended December 31, 2000                                                   -0-    153,500

C. Convertible notes dated 2000 and 1999 plus interest at 12%
convertible at $.75 per share, payable in one year.  The Company
has defaulted on notes issued in 1999 in the amount of $150,000            380,000    150,000

D. Equipment loan dated 3/28/00 plus interest at 13% payable in
60 equal monthly installments of $681 due 2/28/05                           26,948        -0-

E. Short term working capital loans from shareholders and related
parties, interest at fair market rates                                      39,666        -0-
                                                                          --------   --------

                                                                          $594,614   $443,500
                                                                          ========   ========
</TABLE>



                                       50
<PAGE>



5 INCOME TAXES

Deferred tax assets are summarized as follows:

                                                            Net
                                      Allowance       Operating
                                      For                  Loss
                                      Bad Debts   Carryforwards        Total
Balance at December 31, 1998
 as previously reported              $    30,600    $   337,300   $   367,900

Change during 1999                       (28,600)       237,700       209,100
                                     -----------    -----------   -----------
Balance at December 31, 1999               2,000        575,000       577,000
Change during 2000                           860        438,340       439,200
                                     -----------    -----------   -----------
                                           2,860      1,013,340     1,016,200
Valuation allowance                        2,860      1,013,340     1,016,200
                                     -----------    -----------   -----------

Balance at December 31, 2000               $ -0-          $ -0-         $ -0-
                                     ===========    ===========   ===========


The Company's net operating loss carry forwards of approximately $2,263,200
expire as follows:

                  Year       Amount
                         ----------
                  2011   $  246,500
                  2012      263,500
                  2013      339,000
                  2014      480,000
                  2015      934,200
                         ----------
                         $2,263,200

6. EARNINGS (LOSS) PER SHARE

Basic net earnings per share is computed by dividing net earnings available to
common stockholders (numerator) by the weighted average number of common shares
outstanding (denominator) during the period and excludes the dilutive effect of
stock options. Diluted net earnings (loss) per share gives effect to all
potentially dilutive common shares outstanding during the period.


                                       51
<PAGE>




7. STOCKHOLDERS' EQUITY

Compensation Plans
The Board of Directors and stockholders of the Company have ratified and
approved the Electronic Fuel Control, Inc.1996 Stock Option Plan (the "Plan" for
which the Company has reserved 500,000 shares of Common stock for issuance upon
the exercise of qualified and non-qualified stock options granted under the Plan
to employees, advisors, consultants and Directors of the Company at prices and
on terms which have not been determined. As of December 31, 2000 no options have
been issued under the Plan.

On April 29, 1998, as consideration for consulting services with regard to
raising capital from sales in the United States and abroad, the Company issued
warrants which entitle the holders thereof, subject to the provisions of the
warrants, to purchase an aggregate of 252,500 shares of the Company's Common
Stock for $1.00 per share. These warrants expire on April 29, 2003.

In June, 1998, in conjunction with a convertible debt offer (Note 4), the
Company issued warrants which entitle the holders thereof, subject to the
provisions of the Warrants, to purchase 60,000 shares of the Company's Common
Stock for $1.50 per share. These warrants expired in June, 2000.

In December 1998, in conjunction with a convertible debt offer (Note 4), the
Company issued warrants which entitle the holders thereof, subject to the
Provisions of the warrants, to purchase 24,400 shares of the Company's Common
Stock for $1.50 per share. These warrants expired in December, 2000.

In January, 2000, as consideration for consulting services with regard to
raising capital, the Company issued warrants which entitle the holders thereof
to purchase an aggregate 62,500 shares of stock for $1.00 per share. These
warrants expire on January 25, 2005.

In November, 2000, as consideration for consulting services with regard to
raising capital and promoting the Company's interest, the Company issued
warrants which entitles the holder thereof to purchase 100,000 shares of Common
Stock for $.75 per share. These warrants expire three years after the date of
issue.


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<PAGE>



8. COMITMENTS AND CONTINGENCIES

Minimum Royalties
Pursuant to the License (Note 3), the Company had committed to sell a minimum
number of units each license year ending on May 31. The License provides for a
minimum number of units to be sold and royalties to be paid each year beginning
with 2,500 units in the first year and increasing one thousand units each year
through the eighth year. In the ninth year and thereafter a minimum of 110,000
were to be sold.

In June, 1997, the Licensor agreed to add the quotas shortfall from the first
year to the second year, increasing the second year quota to 5,882 units. In
June, 1998, the Licensor agreed to suspend the quotas for a period of three (3)
years, i.e. there would be no quotas for the Company to meet until the license
year beginning June 1, 2001 at which time the quotas would start at 2,500 units
per year and continue as is now set forth in the License Agreement. The licensor
had the right to terminate the License if the quota in any year was not met.

As per Note 3, the quotas have been removed from the license agreement effective
January 3, 2000 in return for further territorial restrictions and issuance of
voting stock.

Consulting Agreement
The Company had a three-year consulting agreement with its Chief Consultant
commencing June 1, 1996. The agreement provided for compensation of $75,000 in
the first year, $80,000 in the second year and $85,000 in the final year of the
agreement. Inasmuch as the Company has been unable to maintain the agreement,
the Chief Consultant has waived the arrears. The agreement lapsed during 1999
and no contract extending this agreement has been signed.

Industrial Lease
The lease on the Company's office and warehouse space expired on December 31,
2000. The Company is in negotiation to extend the lease for an additional one
year term.

Penalties
The Company is in arrears for payroll and sales taxes as set forth below:

              Payroll taxes    $112,226
              Sales tax          28,405
              Penalties
                and interest     76,207
                               --------
                               $216,838
                               ========


Going Concern
As shown in the accompanying financial statements, the Company incurred a net
loss of $941,634 during the year ended December 31, 2000, and as of that date,
the Company's current liabilities exceeded its current assets by $1,145,836 and
its total liabilities exceeded its total assets by $1,115,935. These factors
create an uncertainty about the Company's ability to

                                       53
<PAGE>

continue as a going concern. Management of the Company is developing a plan to
reduce its liabilities by restructuring its debts and converting a substantial
portion intoequity and issuance of additional stock to shareholders. The ability
of the Company to continue as a going concern is dependent on the plan's
success. The financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.

9. RELATED PARTY TRANSACTIONS

During 1999 and 2000, the Company shared general overhead with Combustion Labs,
Inc., a prior licensee, controlled by the Davis Family Trust and its
beneficiaries who are officers of the Company. In addition, the Company licenses
proprietary technology from the Davis Family Trust.

10. PRIOR PERIOD ADJUSTMENTS

The Company's previously issued 1998 financial statements were corrected in 1999
as a result of certain disclosures. This resulted in the following changes to
accumulated deficit and the related operating results.

Also corrected was a misstatement of capital stock issued to a prospective key
employee as an inducement to join the Company. The stock was recorded but never
issued inasmuch as the employee reneged and was never hired.

In 1996 the Company acquired a license from the Davis Family Trust, the
licensor, at fair market value. Due to the relationship of the
officers/shareholders of the Company with the Trust, the value of the license
was reduced to the licensor's basis. Consequently, the accounts presented
herewith were restated to reflect the effect of that change.

<TABLE>
<S>                                          <C>           <C>          <C>

                                               Additional
                                                  Paid in   Accumulated
                                                  Capital       Deficit     Net Loss
                                                  -------    ----------   ----------

As previously reported, December 31, 1998      $  931,349   $ (859,583)   $ (325,607)

Under-accrual of professional fees and
consultant fees                                      --        (26,256)      (26,256)

Effect of license valuation restatement           124,226     (103,733)       11,617

Cancellation of unissued capital stock               --            240          --
                                               ----------   -----------   ----------
As restated, December 31, 1998                 $1,055,575   $ (989,332)   $ (340,246)
                                               ==========   ==========    ==========
</TABLE>


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<PAGE>


11. LITIGATION LOSS

 In 1999 an independent consultant filed suit against the Company to recover
fees and damages of $125,000 inclusive of interest to December 31, 1999. The
consultant's complaint originated from a contract to provide personal services
and expertise, in the field of diesel and gasoline to natural gas conversions,
on a project that occurred in 1997 and 1998 in the country of Uzbekistan. The
Company contracted with the consultant at the direction and benefit of another
party who was the primary contractor of the project. Although the Company has
defenses against the plaintiff and will have a recovery claim against the
primary contractor, it is management's opinion, supported by counsel, that a
loss has been sustained in the period. Accordingly, they have accrued the loss
as prescribed by Statement of Financial Accounting Standards NO. 5, Accounting
for Contingencies.




                                       55
<PAGE>




                            SUPPLEMENTARY INFORMATION


                              SAVE ON ENERGY, INC.
                      (A COMPANY IN THE DEVELOPMENT STAGE)
                            SUPPLEMENTARY INFORMATION
                            YEARS ENDED DECEMBER 31,
                                                              2000         1999
                                                         ---------    ---------
SCHEDULE "1" : COST OF SALES
     Inventory at beginning                              $ 110,830    $ 214,949
     Purchases and freight                                 220,770      225,672
                                                         ---------    ---------
                                                           331,600      440,621
     Inventory at end                                      158,335      110,830
                                                         ---------    ---------
                  Cost of sales                          $ 173,265    $ 329,791
                                                         =========    =========

SCHEDULE "2": OPERATING EXPENSES
     Salaries and wages                                  $ 161,721    $ 175,679
     Payroll taxes                                          15,087       13,007
     Employee benefits                                         584        3,211
     Consulting fees and outside services                  257,574      108,053
     Rent                                                   36,974       25,950
     Light, heat and power                                  16,728       14,395
     Repairs and maintenance                                   596        1,461
     Factory supplies and expenses                           7,922       10,067
     Research and product testing                           34,281        3,155
     Insurance                                              27,661       22,841
     Depreciation                                           19,860       17,317
     Provision for doubtful accounts                        37,144      141,156
     Royalties and patents                                  32,325       15,978
     Auto and truck expense                                  2,748        2,996
     Sales promotion, advertising and public relations      25,924        5,847
     Professional fees                                      96,764       35,910
     Travel and transportation                              66,086       47,931
     Telephone                                              16,616       13,556
     Entertainment                                          10,571        4,398
     Office supplies and expense                            19,650       14,602
     Filing fees                                            21,279         --
     Dues and subscriptions                                  2,022        2,814
     Bank fees and credit card charges                       7,237        1,061
     Miscellaneous expense                                   9,642          533
                                                         ---------    ---------
                  Total operating expenses               $ 926,996    $ 681,918
                                                         =========    =========




SCHEDULE "3": OTHER INCOME AND EXPENSE
     Loss on litigation                                  $    --      $ 125,000
     Interest expense                                       78,233       35,489

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<PAGE>


     Interest income                                          (826)      (2,476)
     Penalties on tax deficiencies                          52,840         --
                                                         ---------    ---------
                  Total other income and expenses        $ 130,247    $ 158,013
                                                         =========    =========

                                       57
<PAGE>