SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One)

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

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

                                 (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]


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 $1.25.

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


                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's  2001 Definitive  Proxy Statement,  which statement
will be filed with the  Securities  and Exchange  Commission  not later than 120
days after the end of the fiscal year covered by this Report,  are  incorporated
by reference in Part III hereof.


                              CROSS REFERENCE SHEET
                                       AND
                                TABLE OF CONTENTS

                                   Page Number
                                or Reference (1)

                                     PART I

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...........21
ITEM 7. Financial Statements..................................................31
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 (2)...............32
ITEM 10. Executive Compensation (3)...........................................32
ITEM 11. Security Ownership of Certain Beneficial Owners and Management (4)...32
ITEM 12. Certain Relationships and Related Transactions (5)...................32

                                                                PART IV
ITEM 13. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.....33
_________________________

1. Certain information is incorporated by reference, as indicated below, from
the registrant's Proxy Statement  for its Annual Meeting of Stockholders (the
"Proxy Statement").
2. Proxy Statement section entitled "Election of Directors."
3. Proxy Statement sections entitled "Director Compensation" and "Executive
Compensation."
4. Proxy Statement section entitled "Stock Ownership."
5. Proxy Statement section entitled "Certain Relationships and Related
Transactions."

<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 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.


                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.

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.

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  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.

                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
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:

                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, Thailan, 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.

        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
OEMs 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.

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).

        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  CARBs
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;

(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.

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.

                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
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.

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")  puruant 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.

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  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.


                                     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.

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.


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
<TABLE>
<S>                        <C>           <C>            <C>           <C>
                              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%)
</TABLE>

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  moving  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  operaations,  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,  and 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.

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
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 Cocern.

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 Initaitive.  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.


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 through our headquarters
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 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 importat 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  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 peformance 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;

     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  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  Uncommon  Media  Group's  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 Uncommon  Media Group or other  take-over
attempt and could adversely materially affect the rights of holders of shares of
the 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  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.


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.

The information required by Item 9 of Form 10-KSB with respect to identification
of directors is incorporated by reference from the information  contained in the
sections  captioned  "Election of Directors"  "Management"  and "Compliance with
Section 16(a) of the Exchange Act" in Save's  definitive Proxy Statement for its
2001 Annual Meeting of  Stockholders  (the "Proxy  Statement"),  a copy of which
will be filed with the  Securities  and Exchange  Commission  before the meeting
date.

ITEM 10. EXECUTIVE COMPENSATION.

The information  required by Item 10 of Form 10-KSB is incorporated by reference
from the information contained in the section captioned "Executive  Compensation
and Other Matters" in the Proxy Statement.

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

The information  required by Item 11 of Form 10-KSB is incorporated by reference
from the information contained in the section captioned "General Information" in
the Proxy Statement.

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

The information  required by Item 12 of Form 10-KSB is incorporated by reference
from the information  contained in the section captioned "Certain  Relationships
and Related Transactions" in the Proxy Statement.
<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.

27.1*    Financial Data Schedule
--------------------------------------------------------------------------------
*  Filed herewith

(b) Reports on Form 8-K

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

<PAGE>


                                   Signatures

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

                                        SAVE ON ENERGY, INC.



                                        By: /S/Robby E. Davis
                                        ---------------------
                                        Name:
                                        Robby E. Davis
                                        Title:
                                        President

                                        Date:
                                        March 30, 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       March 30, 2001
-----------------
Robby E. Davis        (principal executive officer) and Director


/S/Jeffrey F. Davis     Vice President, Secretary and Director    March 30, 2001
-------------------
Jeffrey F. Davis


/S/Ricky Davis          Treasurer, Chief Financial Officer and    March 30, 2001
--------------                       Director
Ricky Davis



<PAGE>





                              SAVE ON ENERGY, INC.

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

                              FINANCIAL STATEMENTS

                                DECEMBER 31, 2000


<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



<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


<PAGE>


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




                                     ASSETS

<TABLE>
<S>                                                                               <C>                  <C>
                                                                                         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
                                                                                   ==========           ==========
</TABLE>


The accompanying notes to the financial statements are an integral part of these
statements.
<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
                                    stockholder' equity                           $  253,127          $   324,915
                                                                                   ==========          ===========
</TABLE>

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

<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)
                  === ====          =========      ======    ==========      ===========
</TABLE>


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
                                    ---------      ------    ----------






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


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



<TABLE>
<S>                                                                   <C>                 <C>
                                                                            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)                   -
                                                                         -------              -------
</TABLE>








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

<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.
<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.

Inventory

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

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


 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
in consideration of 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.


 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>


 5. INCOME TAXES

     Deferred tax assets are summarized as follows:

<TABLE>
<S>                                        <C>              <C>                <C>
                                                                       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-
                                            ===========          =========        ==========
</TABLE>


     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.


 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.

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 Companys 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.  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             Net
                                                        Capital           Deficit             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>



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

<PAGE>
Exhibit 27


CIK:                                             1107955
NAME:                               Save On Energy, Inc.

PERIOD TYPE:                                        Year
FISCAL YEAR END:                              12/31/2000
PERIOD START:                                   1/1/2000
PERIOD END:                                   12/31/2000
CASH:                                             14,207
ACCOUNTS RECEIVABLE, NET:                         28,688
INVENTORY:                                       158,335
NET FIXED ASSETS:                                 51,897
TOTAL ASSETS:                                    253,127
NOTES AND LOANS PAYABLE:                         572,618
ACCRUALS AND CURRENT LIABILITIES:                774,448
NON-CURRENT LIABILITIES:                          21,996
COMMON:                                            3,406
OTHER SE:                                     (1,119,341)
TOTAL LIABILITY AND EQUITY:                      253,127
SALES:                                           288,874
COST OF SALES:                                   173,265
OTHER COSTS:                                   1,057,243
INCOME PRE-TAX:                                 (941,634)
INCOME TAX:                                            0
INCOME CONTINUING:                              (941,634)
DISCONTINUED:                                          0
EXTRAORDINARY:                                         0
CHANGES:                                               0
NET INCOME:                                     (941,634)
EPS PRIMARY:                                       (0.22)
EPS DILUTED:                                       (0.22)
RESERVE OPEN:                                          0
PROVISION CURRENT:                                     0
PROVISION PRIOR:                                       0
PAYMENTS CURRENT                                       0
PAYMENTS PRIOR:                                        0
RESERVE CLOSE:                                         0
CUMULATIVE DEFICIENCY:                                 0


<PAGE>





PERIOD TYPE:                                 YEAR
FISCAL YEAR END:                           DEC-31-1998
 PERIOD START:                             JAN-01-1998
 PERIOD END:                               DEC-31-1998
 DEBT HELD FOR SALE:                        80,832,097
 DEBT CARRYING VALUE:                        8,899,659
 DEBT MARKET VALUE:                          9,017,950
 EQUITIES:                                           0
 MORTGAGE:                                           0
 REAL ESTATE:                                        0
 TOTAL INVEST:                              89,826,188
 CASH:                                      19,376,380
 RECOVER REINSURE:                                   0
 DEFERRED ACQUISITION:                       3,809,737
 TOTAL ASSETS:                             180,233,135
 POLICY LOSSES:                             22,717,862
 UNEARNED PREMIUMS:                                  0
 POLICY OTHER:                              74,395,205
 POLICY HOLDER FUNDS:                        8,845,829
 NOTES PAYABLE:                              8,283,884
 PREFERRED MANDATORY:                                0
 PREFERRED:                                          0
 COMMON:                                        11,495
 OTHER SE:                                  35,824,219
 TOTAL LIABILITY AND EQUITY:               180,233,135
 PREMIUMS:                                 160,784,897
 INVESTMENT INCOME:                          7,454,180
 INVESTMENT GAINS:                             210,857
 OTHER INCOME:                               1,696,690
 BENEFITS:                                 116,058,675
 UNDERWRITING AMORTIZATION:                    647,271
 UNDERWRITING OTHER:                        56,209,449
 INCOME PRETAX:                             -2,768,771
 INCOME TAX:                                 1,066,888
 INCOME CONTINUING:                         -3,835,659
 DISCONTINUED:                                       0
 EXTRAORDINARY:                                      0
 CHANGES:                                            0
 NET INCOME:                                -3,835,659
 EPS PRIMARY:                                    (.49)
 EPS DILUTED:                                    (.49)
 RESERVE OPEN:                                       0
 PROVISION CURRENT:                                  0
 PROVISION PRIOR:                                    0
 PAYMENTS CURRENT:                                   0
 PAYMENTS PRIOR:                                     0
 RESERVE CLOSE:                                      0
 CUMULATIVE DEFICIENCY: