SECURITIES AND EXCHANGE COMMISSION

                                    Washington, D.C. 20549

                                          FORM 10-K

                        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                            OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended January 31, 1997     Commission File Number  000-18081


                       RAMEX SYNFUELS INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)


        Nevada                                             87-0360039
(State of Incorporation)                            (IRS Employer Ident. No.)

         2204 W. Wellesley
     Spokane, Washington  99205                          (509)  328-9633
(Address of principal executive offices)         (Registrant's telephone number)

          Securities registered pursuant to Sections 12(b) of the Act:

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

          Securities registered pursuant to Sections 12(g) of the Act:

                                 Title of Class
                              (Common Stock ($0.01)

Indicate by check mark whether the registrant (1) has filed all reports required
by Section 13 or 15(d) of the  Securities  and  Exchange  Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such  reports):  Yes [x] No [ ], and (2) has been subject to such filing
requirements for the past 90 days: Yes [x] No [ ].


<PAGE>

State the aggregate market value of the voting stock held by  non-affiliates  of
the registrant.

Approximately  $115,358 as of January 31, 1997  (determined  by reference to the
average bid and asked prices of such stock on January 31, 1997).

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

                                   As of January 31, 1997,
                          Common Stock, $0.01 Par Value - 13,823,465

                                       Total pages: 37

Documents incorporated herein by reference:

                                      None.

<PAGE>

                                           Part I


Item 1. DESCRIPTION OF BUSINESS.

     Ramex is  inactive,  it was  organized  for the purpose of and  involved in
developing  and  extracting  oil, gas, and other energy sources from oil bearing
shale.  As of  January  31,  1997,  Ramex  was not  producing  oil or oil  shale
products.  Ramex  had  been  in the  development  stage  until  1992,  when  all
operations  closed.  Subsequently,  the  Registrant on December 13, 1993 entered
into a Contractual  Agreement with Southwest  Research Institute of San Antonio,
Texas,  for first  phase  testing  of the  patented  Ramex in situ  gasification
process.

     While the oil  shale  process  has been  tested  in the  laboratory  and in
several  field tests in Wyoming and Indiana,  the results  from the Process,  as
utilized on a commercial  basis, are unknown and no assurance can be given as to
the amount of gas the process will produce, if any, or the longevity of any such
production.

     Ramex  Synfuels  International,  Inc., a Nevada  corporation  ("Ramex") was
originally  incorporated  and commenced  operations as Cache Oil  Corporation in
March, 1980 under the laws of the State of Utah.

     In July,  1980, Cache Oil Corporation  purchased in a business  combination
all of the outstanding  common stock of Rams Horn, Inc. , a Wyoming  Corporation
which was subsequently dissolved. In December, 1980 Cache Oil Corporation merged
with the wholly owned  subsidiary  of Rams Horn,  Inc.,  Ramex  Synthetic  Fuels
International,  Inc., a Utah  Corporation,  with the name of the surviving  Utah
Corporation  being changed to Ramex Synfuels  International,  Inc. Ramex changed
its domicile to Nevada from Utah in December,  1988.  All of these entities were
in the development stage at the time of acquisition or merger.

The Process

     The oil shale gasification Process is an "in situ" process which means that
the shale is not mined. Rather, wells are drilled, similar to natural gas wells,
into the shale  formation,  which is fired by propane or natural gas. The heater
raises the temperature of the shale to approximately  1,200 degrees  Fahrenheit.
This  causes a reaction to take


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place in the oil  shale  somewhat  similar  to the  reaction  in coal when it is
turned into coke,  or the process when a charcoal  briquette is lit at one point
and the heat moves through the briquette and releases the hydrocarbons  that are
stored in the briquette.  There is no combustion , however,  that actually takes
place in the shale. This reaction causes the molecules of hydrocarbon trapped in
the shale to be released in the form of kerogen gas,  which is then  transported
to the surface and processed.

Environmental Aspects of the Ramex Process

     Of  paramount  concern to Ramex is the effect the Process  will have on the
environment.  Particular  interest is directed toward its effect on ground water
quality.

     In order to obtain a further  understanding  of the  mobilization  of trace
elements and to indicate the  environmental  and health  effects of the Process,
Ramex has  conducted a survey of  literature  looking for similar  scenarios  on
equivalent  strata.  Ramex has also conducted actual field tests on ground water
in and  around a  production  well.  In order to  assure  reliability,  both the
Indiana Geological Survey and Environmental  Consultants of Clarkville,  Indiana
conducted  a series  of tests for Ramex as well.  The  tests  compared  leachate
composition  and the results showed that the Process did not  materially  affect
the water in the area near well sites.

Corporate Developments.

     On May 29, 1990 Ramex was issued the Patent for it's oil shale gasification
process.

     The patent gives Ramex  exclusive  rights to any process  whereby a hole is
drilled into oil shale and a heater is inserted therein and gas is produced back
through the same hole. This is an important development for Ramex since it gives
Ramex the exclusive right to the process. Anyone who wishes to produce synthetic
natural gas in a similar way must negotiate with and pay Ramex a royalty for the
use of the  Process.  The low  cost  and  efficient  economic  use of  currently
uneconomic  resources makes the Process very important to the energy industry in
general and specifically important to the future of Ramex. The Ramex patent will
be valid until May 28, 2007.


<PAGE>

     Ramex is also in the  process of applying  for  foreign  patents in several
countries that have  significant oil shale deposits.  Ramex considers the patent
important to the industry.

     Since 1980 , Ramex has been in the process of researching  and developing a
method to extract synthetic natural gas from oil shale.

     Work began in the  laboratory  and progressed to an initial field test near
Duchesne,  Utah,  followed by a second field test and two additional field tests
near Rock  Springs,  Wyoming.  In April,  1988,  Ramex began field  testing near
Henryville,  Indiana. Eight wells were drilled in Indiana. From each well, Ramex
has learned  more about the Process  and has been able to further  develop  it's
technology.

     Based on  conclusions  derived from the above  mentioned  tests,  Ramex has
learned about the process and what is yet to be learned,  Ramex has  tentatively
arrived at the following conclusions:

     1. Ramex has proven that it can produce synthetic natural gas by drilling a
     hole into the shale and inserting a heater and raising the  temperature  to
     over 1,000 degrees Fahrenheit.

     2. Ramex has  developed a heater which will allow Ramex to put  substantial
     BTU's of heat into the shale and has  developed  the surface  equipment and
     controls to control the heater  temperature  and monitor the temperature of
     the shale as it is being heated.

     3.  Ramex  has a patent on the  process  and may,  if it has the  necessary
     funds,  to monitor patent  infringement  on the process.  The Registrant is
     trying  to  obtain  money  from  outside  sources  to test  the  commercial
     potential of the process.

     Questions yet to be answered from the research  obtained prior to using the
process on a commercial basis are:

     1. How fast does the heat reaction move through the shale?

     2. How far will the  reaction  go from the heat source and how much heat is
     necessary on an incremental  basis to keep the reaction zone moving outward
     from the source heat?

     3. What is the exact chemical  composition of the gas that is produced from
     the process over a period of time and does the composition change


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     with varying amounts of heat and if so, what is the ideal amount of heat to
     produce the most desirable chemical composition of the gas?

     In all of the field tests in Indiana,  Ramex was unable to answer the above
questions  because water  incursions  into the heating area after the burner was
installed. This problem occurred in every well that was drilled in that area.

     Management  has  determined  that it needs a lengthy  burn in a water  free
environment,  and could not be assured  that Ramex's  lease  holdings in Indiana
would provide us that kind of environment, nor the surrounding five state area.

     The technology is available to dewater an area of shale.  It is done simply
analyzing  the water table in the area and drilling a number of wells around the
perimeter  of the area  intended to react with,  then process and pump the water
out creating a cone of  depression.  On a commercial  application of the process
that  would be the way to  handle  it.  The cost  per well  would be  relatively
minimal, but to do so for one well on a research basis is cost prohibitive.

     So, while  ultimately  the  commercial  production of gas from the shale in
Indiana and other  states  where high water  tables are present is very real and
possible, it isn't suitable for research purposes.

     Ramex  has  had  extensive  meetings  with a  recognized  leading  research
institution  in  dealing  with gas  technology.  Ramex has  asked  the  research
institution for a proposal to duplicate the down hole conditions in a laboratory
setting and to answer the questions  that Ramex has been unable to answer in the
field  experiments  so far. The  tremendous  advantage of laboratory  simulation
compared to continued  trial and error  research in the field is that  variables
can be  introduced,  such as higher  or lower  temperatures  and  their  effects
studied to determine  exactly the correct  temperature  necessary to achieve the
best  reaction  and to maintain the thermal  front  moving in the most  economic
manner.

     The  composition of the gas can also be tested using  variable  conditions.
What would require  tremendous  outlays of capital in the field can be done with
simple  inexpensive  changes  in a  laboratory  setting.  Also,  it can be  done
completely  free of incursion by outside  influences  such as ground water.  The
volume of gas  produced,  its  composition  and the  ultimate  economics  of the
process can be determined and perfected  much more quickly in a laboratory  than
in the  field.  The next step Ramex


<PAGE>

must take is the  completion  of laboratory  experiments  designed to answer the
above  questions.  Ramex is currently in the process of securing funds through a
private placement to fund the cost required to do the laboratory testing.

     On September 30, 1993, the Registrant, as sponsor of a private placement of
limited  partnership  interests  in Ramex  Research  Partners,  Ltd.  closed its
offering at the  minimum  amount  intended  to be sold of $110,000  and issued a
press  release  regarding  same.  The  partnership  interests  were  offered  to
investors' meeting  suitability  standards in multiples of $5,000 with a minimum
purchase of one unit.  The  Registrant is the General  Partner of Ramex Research
Partners, Ltd. (the "Partnership").

     The  Partnership  was formed  for the  purpose  of  participating  with the
Registrant in further  enhancement and development of the oil shale gasification
process (the "Process") which patent is owned by the Registrant. The funds which
Ramex  receives  from the  Partnership,  as well as funds  received  from  other
sources, including funds received from the sale of shares of common stock in the
future,  if any,  will be  utilized  by the  Registrant  to  conduct  additional
research  of  the  process  which  will  have  as  its  goals  (i)  the  further
understanding of the process involved in the in-situ  gasification of shale oil;
(ii) the further  development  of the  technology  utilized in the design of the
down-hole heaters, which are an integral part of the application of the process,
in order to increase the  efficiency of such heaters;  (iii) the  development of
more  efficient  methods  for  handling  the gases  produced  as a result of the
application of the process;  (iv) the  development  of more  efficient  drilling
methods for  penetrating and exploiting oil shale through the application of the
process;  and (v) the development of water containment  methods to eliminate the
problem  of  down-hole  water  flowing  in  the  heater;  and  (vi)  payment  of
outstanding  accounts  payable and to fund current  operating  expenses,  to the
extent possible, of Registrant.

     In  consideration  of the capital which the Partnership  makes available to
the Registrant to fund its research and development  activities,  the Registrant
will  grant to the  Partnership  a  limited  term  royalty,  payable  out of the
proceeds of gas produced from the  application of the process.  The limited term
royalty shall  continue  until the  Partnership  has received the greater of (i)
payments  aggregating  1.10% of the net  profits  received  from the first 1,000
wells drilled and produced  using the Ramex process or (ii) payments the limited
partners receive aggregates ten times their original contribution.


<PAGE>

     The  Registrant on December 13, 1993 entered into a  Contractual  Agreement
with Southwest Research Institute of San Antonio, Texas, for first phase testing
of the  patented  Ramex in situ  gasification  process.  The funds  obtained  as
described above were utilized to conduct this research.

Results of Operations

     During the three month period ending  January 31, 1997,  the Company's only
activity was to evaluate the Ramex Oil Shale Gasification  Process and negotiate
with potential financing entities.

     This first phase was intended to establish  the  recommended  scope of work
required to initiate the multi-phase project as hereafter  described,  which may
lead to a possible  pilot-scale  phased field  demonstration.  The scope of work
represents  a  plan  which  should  match  the  technical,  financial  and  time
scheduling objectives of Ramex for research and developing the Process.

     In a report dated August 25, 1995,  Southwest  Research  Institute reported
the following results concerning the first phase testing of the Ramex Process:

Phase I Studies

     The  technical  efforts  presented  in this report  represent  Phase I of a
multiple-stage  research program aimed at investigating  and  demonstrating  the
Ramex  Synfuels  International  oil  shale  gasification  process.  This  report
presents  the results of Phase I;  Preliminary  Laboratory  Demonstration  Tests
designed to: (1)  investigate  the  gasification  process on a small scale using
electric heaters in oil shale samples  approximately 0.25 cu. ft. in volume; and
(2) sample internal  temperatures to determine the effective thermal  properties
over the temperature  range in which the kerogen in the shale undergoes  changes
from  semisolid to liquid vapor or gas. The first of these  objectives  required
development and refinement of appropriate test apparatus to achieve a successful
testing methodology and procedure.  The second objective  successfully  provided
experimental data needed to understand the shale  gasification  process and heat
transfer  properties of the oil shale and to plan more  thorough  studies of the
high-temperature  heat  transfer  process for  follow-on  phases of the research
program.


<PAGE>

     The laboratory  demonstration  tests  performed in Phase I revealed a basis
for interpreting and characterizing the in situ oil shale gasification  process.
Interpretations  listed below,  as conclusions  and  recommendations  for future
work, are summary highlights for Phase I.

Phase I Conclusions

     (1)  The  experimental   investigations   of  Phase  I  have   successfully
demonstrated the basic shale  gasification  process  described in Ramex Synfuels
International  Patent No. 4,928,765 dated May 29, 1990. The small scale of these
experiments  did not  permit the shale gas energy  production  efficiency  to be
determined. Instead, Phase I provided valuable data and insight into the thermal
properties of the oil shale materials and the testing  procedures  necessary for
more  complete  gasification  similitude  evaluation  tests on larger  oil shale
samples.

     (2)  Heating  the  oil  shale  samples  in  a  manner  representative  of a
full-scale  field setup was successful in producing both liquid shale oil and in
liberating  shale gas.  Shale oil and gas  production  was  consistent  with the
kerogen  richness of the samples.  In  addition,  the  experimental  arrangement
permitting  cyclic  liquid-vapor  reflux  processing  yielded a  proportionately
greater amount of shale gas. As a result,  the origins of the shale gas must, at
present,  be considered to be twofold;  namely,  liberation of methane and other
hydrocarbon  gases  originally  trapped in the  semi-solid  kerogen  and thermal
cracking of the kerogen vapors in the heated production and gas delivery zone of
the sample. The reflux process observed in the laboratory experiments appears to
be adaptable as a full-scale field system feature to utilize downhole waste heat
to enhance gas production. The residual shale oil liquids and vapors potentially
can be used as fuel for the downhole  heater in the full-scale  system.  The net
shale gas product is then available for other external  energy  applications  or
for pipeline transport.

     (3) The heat  transfer  characteristics  derived  for the  tested oil shale
samples are comparable with those of other oil shales reported in the literature
and provide adequate data for designing future  laboratory  experiments with the
objective of truly simulating the complete shale gasification process.

     (4) Important  technical  lessons  learned in Phase I will be of particular
benefit in the planning and design of follow-on laboratory  experiments in Phase
II. The sequence of  experiments  in Phase I have led to refined  sample testing
configurations  and now  provide a  database


<PAGE>

of  heating  power  and shale  heat  transfer  information  on which to base new
experimental  tests using larger size shale samples and increased heating power.
Electrical  heating  methods  are  preferred  for these  tests  because of their
accurate heat control and heater durability.  Shale oil vapor and gas collection
techniques  are now well  understood  from the Phase I tests and can be used for
quantitative analysis and design of more advance laboratory experiments in Phase
II.

     (5) Successful results from the preliminary  demonstration  tests performed
in Phase I indicate  that the Ramex Process shows good promise for further study
and  development.  More advanced  laboratory  experiments are now recommended to
study the net energy  recovery  efficiency  of the  method  and to  develop  the
necessary  downhole heaters and associated system  components  required to begin
pilot field evaluation tests.

Recommendations for Future Work

     (1) Additional  laboratory tests are recommended to be performed on a wider
selection of oil shale samples to better  characterize  and  understand the heat
transfer process in the shale. These tests should encompass a range of oil shale
richness  and  different  types of shale rock  matrix  (Eastern  and Western oil
shales).  These tests will also be valuable in establishing a routine method for
evaluating future field sites for potential gasification.

     (2) Larger scale laboratory demonstration  experiments using larger heating
power are recommended to more  accurately  quantify the heat energy required for
gasification  and to better  evaluate the gas production  process.  Sample sizes
having a volume in the range of ten cubic feet or larger are  recommended.  Data
collected  on the  smaller  samples  tested  to date  can be used to  accurately
specify the sample sizes needed for future testing.

     (3) Field  site  geological  reconnaissance  and  sampling  is  needed  for
purposes of gathering appropriate oil shale samples for future laboratory tests.
These  efforts could be broadened to include  characterization  of various field
sites for future pilot-scale field testing of the shale gasification process.

     (4)  Prototype  downhole  heater  design and  development  is necessary for
testing  shale  gasification  on a pilot  scale in the  field.  Based on certain
downhole  operational  and design  constraints  emerging from the Phase I tests,
prototype  gas-fired  heater  system  designs are


<PAGE>

recommended  to  be  developed,  including  the  specification  of  any  special
materials needed for long-term  operational  life.  Prototype heater designs are
recommended to be tested in controlled and instrumented  shallow  limestone rock
locations prior to testing in oil shale settings.

     (5)  Numerical  modeling  of  the  oil  shale  gasification  process  is an
important  aspect of predicting the  performance of the method under the various
conditions  that  may  be  encountered  in  the  field.   The  laboratory  tests
recommended  above will yield the thermal  parameters  needed for developing and
applying  such models.  Certain  existing and  commercially  available  computer
models  for heat  transfer  applications  are  recommended  to be adapted to the
special  needs  of  this  project,  including  the  ability  to  handle  kerogen
phase-change  phenomena,  the problem of heat  transfer in a porous rock matrix,
and the  nonconservative  process of removing heated  hydrocarbon  mass from the
system.  Properly  developed,  a computer  simulation model will be particularly
valuable in  characterizing  and optimizing the full-scale field experiments and
in the selection of practical pilot-scale test sites.

     (6) A  pilot-scale  oil  shale  gasification  system is  recommended  to be
designed and specified  for  construction.  This design  should be  specifically
oriented  toward  initiating  operational  tests  at a  field  test  site  where
controlled  performance testing and measurements are possible. A follow-on phase
of this project is  recommended  to be dedicated to the  construction  and field
operational testing of the pilot-scale system.

     Ramex is  attempting to obtain  financing for the second,  third and fourth
phases,  while the first phase has been  completed  The  following is a proposed
summary of the additional three phases of this project:

     Phase II. Laboratory Studies and Analytical Modeling of Shale Gasification:
The  experimental  heat  transfer  testing  techniques  used in  Phase I will be
refined  and  applied to  additional  samples of oil shale and  samples of shale
boundary rock materials from several  representative  field sties. The effective
thermal   conductivity  and  thermal  diffusion  constant  of  these  materials,
incorporating   combined  rock  matrix  heat   conduction  and  pore-space  heat
radiation,  will be determined to accurately characterize the thermal properties
of the oil shales and other  geological  boundary rock  materials  that are most
representative  of typical  oil shale  gasification  sites.  In addition to this
work, a mathematical  model of the in situ heat transfer  characteristics of the
gasification process will be formulated to predict the full-scale performance of
the  technique  in a layered oil shale  formation  using the  


<PAGE>

laboratory-derived  shale and boundary  rock thermal  parameters.  Typical model
cases  will be  evaluated  to yield  idealized  estimates  of the heat  transfer
process.  Numerical models will be evaluated to yield idealized estimates of the
heat  transfer  process.  Numerical  models  will also be  computed to allow the
effects of  inhomogeneities  in kerogen content and the presence of fractures to
be evaluated.  The results of this phase of work will be a comprehensive process
parameter  study  from  which  a  full-scale  field  test  can be  designed  and
implemented in Phase III.

     Phase III. Instrumented Field Experiment:  An appropriate shallow oil shale
test  site  will be  selected  at  which a  controlled  and  instrumented  field
evaluation  experiment  of the  shale  gasification  process  can be  performed.
Experimental  downhole heater equipment,  down hole temperature  monitor probes,
and a surface gas recovery  system will be designed and  constructed  for use in
this experiment.  The scope of this experiment will be sufficient to demonstrate
the  gasification  technique in situ and to allow the reliability of the various
experimental  equipment components to be determined.  This field experiment will
also provide important  information on the practical gas production  efficiency,
self-heating efficiency,  and safety of the process for the particular test site
selected.

     Phase IV.  Pilot-Scale  Shale  Gasification  Project:  A pilot-scale  field
demonstration  shale gasification  system will be constructed and installed in a
representative  oil shale  field for the  purpose  of  operational  testing  and
performance  evaluation.  The goals of this phase of work are to  produce  shale
gas, convert it to commercially  assessable  energy,  and evaluate the operating
performance   and  endurance   /maintenance   characteristics   of  the  overall
installation.

     Therefore,  based on the above  described  program,  Ramex  will  prepare a
proposed overall plan/program,  that may ultimately reach commercial production.
Ramex  will  continue  to seek  funding  to allow the Ramex  process  to proceed
through  phases 2, 3 and 4 of the  research  and  development  stage to possible
production.

     The financing discussed herein is crucial to the ongoing development of the
process as well as the corporate existence. Management is considering a possible
restructure of the  corporation as a means of further  financing  possibilities,
although this is in  preliminary  discussions  only and is  predicated  upon the
proposed  plan.  Any changes in corporate  structure are subject to  shareholder
approval and at the present no proposed changes have been formulated.


<PAGE>

Affiliates

     Ramex had issued an exclusive  license to use the Tar Sands Process for the
Tar Sands of Canada and a non-exclusive license to use the Process anywhere else
in the world to a private corporation named Terr Sant International, Inc. ("Terr
Sant") a Nevada  corporation.  Donald L. Walker,  the former  President of Ramex
bought out the primary  stockholder  in Terr Sant and  renamed  the  corporation
Tri-Gas  Technology,  Inc.  Tri-Gas  will  utilize  the  Process  under  Ramex's
supervision in the exploration  and development of oil and gas.  Ramex's license
agreement  with  Tri-Gas  is  to  develop  the  Process  in  Indiana,  Kentucky,
Tennessee,  Ohio and West  Virginia;  however,  they have  reached  the end of a
performance clause of their contract with Ramex.

Competitive Conditions

     Oil shale  gasification  is a  relatively  new process  for the  commercial
production of synthetic  natural gas, and there are  comparatively few companies
involved in this  activity.  At least  initially,  Ramex does not anticipate any
significant  competition  for geological  prospects  suitable for conducting its
operations from other entities in the oil shale gasification industry.  However,
Ramex may encounter  competition  in obtaining  future  prospects and in selling
natural  gas  by  other  companies  and   individuals   engaged  in  traditional
exploration  for oil and gas;  as well as in the  organization  and  conduct  of
drilling programs,  many of whom have greater financial  resources and technical
capabilities than the Registrant.

Government Regulations

     The  following  discussion  of  regulation  of the oil and gas  industry is
necessarily  brief,  and is not intended to constitute a complete  discussion of
the  various  statutes,  rules,  regulations  or  governmental  orders  to which
operations of registrant may be subject.

Regulation of Production Operation

     The  production  of oil and gas is subject to  extensive  federal and state
laws,  rules,  orders,  and  regulations  governing  a wide  variety of matters,
including  the drilling  and spacing of wells,  allowable  rates of  production,
prevention of waste, and pollution and protection of the  environment.  Although
the  particular  regulations  applicable in each state


<PAGE>

in which operations are conducted vary, such regulations are generally  designed
to ensure that oil and gas  operations  are carried out in a safe and  efficient
manner  and to  ensure  that  similarly-situated  operators  are  provided  with
reasonable  opportunities  to produce their  respective fair shares of available
oil and gas  reserves.  In addition to the direct costs borne in complying  with
such  regulations,  operations  and  revenues may be impacted to the extent that
certain regulations limit oil and gas production to below economic levels.

Regulation of Sales and Transportation of Natural Gas

     The federal  government and various state governments have adopted laws and
regulations  regarding the control and  contamination of the environment,  which
may affect the operations of the  Registrant.  Moreover,  in the areas where the
Registrant  would  conduct  its  activities,   there  are  statutory  provisions
regulating  the  production  of  natural  gas and  administrative  agencies  may
promulgate  rules in connection with the operation and production of natural gas
wells,  determine  the  reasonable  market demand for natural gas, and establish
allowable rates for production.  Such regulatory orders may restrict the rate at
which the  Registrant's  wells,  if any,  produce  natural gas below the rate at
which such wells would be produced in the absence of such regulatory orders.

     It is anticipated that the  Registrant's  natural gas may be sold in either
intrastate commerce or interstate commerce.  In either case, the sale of natural
gas may be subject to regulation  by the Federal  Energy  Regulatory  Commission
("FERC") under the Natural Gas Policy Act of 1978 (the "NGPA") enacted  November
9, 1978,  which became  effective with respect to certain first sales of natural
gas delivered on or after  December 1, 1978. On January 1, 1985,  Section 121 of
the NGPA  deregulated  the prices for  substantial  amounts  of  interstate  and
intrastate  natural  gas, and FERC has amended its  regulations  to take account
said  deregulation.  Additional  volumes of natural gas were deregulated July 1,
1987.  The NGPA and  regulations  promulgated  thereunder  by FERC  provide  for
maximum lawful  ceiling prices for certain  categories of natural gas and do not
supersede or nullify the  effectiveness  of any  contractual  agreement to pay a
lower price.  Although the Registrant  intends to negotiate  purchase  contracts
there is a virtual certainty under current market conditions that the Registrant
will not receive the maximum  ceiling prices which might be otherwise  permitted
under the NGPA.  It is  anticipated  that the  registrant  will receive  current
market value for its production.


<PAGE>

     The NGPA provides  that, in addition to the ceiling  prices,  producers may
collect  reimbursement  of state  severance  taxes and, to the extent allowed by
order  or  rule  of  FERC  may be  reimbursed  for  compressing,  gathering  and
transporting natural gas, and other similar costs.

     All  FERC  regulatory  rates  are  ceiling  rates,  and to the  extent  the
Registrant's natural gas sales contracts do not permit it to sell natural gas at
such  rates,  natural  gas will be sold at such  lower  contract  rates.

     If the  Registrant  sells for resale  natural  gas which was  committed  or
dedicated to interstate  commerce prior to or on November 6, 1978, to the extent
such  natural gas does  qualify as new natural  gas,  high cost  natural gas, or
natural gas produced from a new, on shore  production  well,  such sales will be
subject to the NGPA and the regulations  issued thereunder which require,  among
other  things,  that  producers  selling  natural  gas for resale in  interstate
commerce  obtain a  certificate  of  public  convenience  and  necessity  before
commencing  most sales and that they secure  approval for increase in prices and
authorization for abandonment of service once commenced.

     The FERC has been pursuing a policy of  encouraging  the  development  of a
natural gas market driven by  competitive  forces and has, over the last several
years, implemented a number of regulations to enhance competition in the natural
gas market. The domestic natural gas industry remains under federal  regulation,
pursuant to the Natural Gas Act and the Natural Gas Policy Act. In 1989 Congress
passed the Natural Gas Decontrol Act and by 1993 all wellhead  regulation of gas
prices will end.

Regulation of the Environment

     The exploration, development, production, and processing of oil and gas are
subject to various  federal and state laws and  regulations  designed to protect
the environment.  Various states and governmental agencies are considering,  and
some have adopted,  other laws and regulations  regarding  environmental control
which could  adversely  affect the business of the  registrant.  Compliance with
such  legislation and  regulations,  together with all penalties  resulting from
noncompliance  therewith,  may  increase  the  cost of oil and gas  development,
production,  and  processing  operations  or  may  affect  the  ability  of  the
registrant  to complete,  in a timely  fashion,  existing or future  activities.
Certain of these costs may ultimately be borne by the Registrant.

<PAGE>

Employees

     At January 31, 1997, the Registrant had no salaried employees.

ITEM 2. PROPERTIES.

     PATENT.  In November,  1989,  Ramex received  approval from the U.S. Patent
Office for it's  patent  application  for oil shale  gasification  process.  The
actual patent was issued on May 29, 1990.  Ramex's patent covers the drilling of
a hole into hydrocarbon  bearing shale,  inserting a heater and applying heat to
the shale formation to cause a reaction which will produce synthetic natural gas
and to  extract  that gas  through  the same bore  hole.  It also  includes  the
description of the equipment  itself.

     The  Registrant's  executive  offices  are  located  at 2204 W.  Wellesley,
Spokane, Washington 99205.

ITEM 3. LEGAL PROCEEDINGS.

     A judgment  was  granted in 1990 to Jack  Guthrie and  Associates,  Inc. of
Louisville,  Kentucky to recover  $12,076.70.  Nothing has occurred  during this
period on the  judgment.  A lawsuit was filed by Paul A.  Petzrick of Annapolis,
Maryland to recover $11,524.00 for consulting  services.  As of the date of this
Form 10-K,  no activity  occurred  during  this  period on this  lawsuit and the
Registrant intends to settle both of these obligations.

     The officers and  directors of the  Registrant  certify that to the best of
their knowledge, neither the Registrant nor any of its officers or directors are
parties  to any  material  legal  proceedings  or  litigation  other  than  that
referenced  herein.  The officers and directors of the registrant do not know of
any  other  litigation  being  threatened  or  contemplated.  To the best of the
knowledge  of the  officers  and  directors  of  the  Registrant,  there  are no
investigations of any felonies, misfeasance or securities investigations nor are
there any other pending or threatening litigation at the present time other than
that referenced herein.

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

     There were no submissions  to a vote of security  holders during the fourth
fiscal quarter ended January 31, 1997.

<PAGE>

                                     Part II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS.

     The  Registrant's  common  stock is  currently  traded in  the-over-counter
market Bulletin Board (Symbol: RAMX)

     The  following  table  sets forth the high and low bid prices of the Common
Stock of the Company in the  over-the-counter  market during the fiscal year end
1996. The information was provided by a market-maker in the Company's stock.

Market price:

                               1995                   1996
                               ----                   ----
        Period            High       Low         High       Low
     First Quarter        $0.06     $0.00        $0.01    $0.001
     Second Quarter       $0.01     $0.00        $0.01    $0.001
     Third Quarter        $0.01     $0.00        $0.01    $0.001
     Fourth Quarter       $0.01     $0.00        $0.01    $0.001

     Such  over-the-counter   market  quotations  reflect  inter-dealer  prices,
without  retail  mark-up,  mark-down  or  commission  and  may  not  necessarily
represent actual transactions.

Holders

     As of January 31, 1997 there were approximately  3,995 holders of record of
the Common Stock of the Company.

Dividends

     The Company has paid no cash  dividends to date,  and it does not intend to
pay any cash  dividends in the  foreseeable  future.  At the present  time,  the
Company  intends to use any  earnings (if any) which may be generated to finance
the growth of the Company's business.



<PAGE>

Item 6. SELECTED FINANCIAL DATA.

                      (Not covered by report of independent accountants)

                                                     Years
                                                Ended January 31,
                                      1994        1995       1996        1997
                                   ---------   ---------   ---------   ---------
Revenues                                -0-         -0-         -0-         -0- 

Net Income (loss)                   (58,494)    (15,622)    (21,081)    (19,168)
   from Operations
Income from Forgiveness
  of Debt                               -0-         -0-      17,692         -0-
Income from Interest                    -0-         -0-         -0-          18

   Net Income (loss)                (58,494)    (15,622)    (21,081)    (19,168)

Net Income (loss)
   per common share:              (0.000472)   (0.00122)   (0.00152)   (0.00113)

Current Assets                          786         251       9,408       2,209

Current Liabilities                 145,170     142,507     144,052     156,003
                                
Total Assets                            786         251       9,408       2,209
                                
Stockholder's equity            
   (deficit)                       (144,170)   (142,256)   (134,644)   (153,794)
                       

Item 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATION.

        Ramex has been a research and development  company from its inception in
1980.  Its sole activity  prior to the current fiscal period has been to conduct
research and  development of the Process.  The Process for extracting  synthetic
natural gas from oil shale is described in detail elsewhere in this report.  The
funds used to complete this research and  development  have been provided by the
sales of stock from the authorized,  but unissued, stock of Ramex, loans made by
shareholders and by the sale of limited partnership  interests in Ramex Research
Partners,  Ltd.  This  private  placement  offering  has  generated  $110,000 in
revenues as of  September  30,  1993.  No actual  field  research  activity  was
conducted  during the fiscal year ending  January 31,  1997.  It was  determined
after the  completion  of the last field  project  in  Indiana  that it would be
necessary to next go to a laboratory research  arrangement to answer some of the
basic questions developed as a result of the field work done by Ramex.


<PAGE>

     Efforts  during the past fiscal year have been  primarily  directed  toward
developing  funding  arrangements  for the cost of the laboratory and field work
yet to be  performed.  An offering was conducted to provide some of the required
financing for the laboratory research.  Subsequently, the Registrant on December
13, 1993 entered into a Contractual  Agreement with Southwest Research Institute
of San Antonio,  Texas,  for first phase  testing of the patented  Ramex in situ
gasification process.

     On February  2, 1996,  the Board of  Directors  canceled  30,000  shares of
"restricted"  (300,000  shares  pre-split)  common  stock issued to Jay Hammond.
These  shares  were  canceled  subject  to   non-performance  of  contract  work
(drilling) that was never conducted.

Liquidity and Capital Resources:

     As of January 31, 1997 Ramex's  current assets were $2,209.  Since there is
no certainty of the success in negotiations for financing the continued research
and development of the Ramex Process,  nor is there any certainty of the success
of such  research,  uncertainties  do exist with respect to the future levels of
Liquidity and Capital,  which will be necessary to fund the Company's operations
and its ability to maintain adequate levels thereof.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     Financial  statements  appear on  sequential  pages 29 to 38 of this Annual
Report on Form 10-K.

Item  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE.

     There were no disagreements in connection with the audits of the three most
recent fiscal years and any  subsequent  interim  period with Terrence J. Dunne,
CPA.

     The Auditor states, in his report to the Board of Directors, that there are
serious  doubts as to the  ability  of the  Registrant  to  continue  as a going
concern  because  of  recurring   losses  from  operations  and  a  net  capital
deficiency.   The  Company  has  very  limited   capital  and  has   substantial
liabilities. Therefore, Mr. Dunne states in his report to the Board of Directors
that these conditions  raise  substantial  doubt about the Company's  ability to
continue in business.

<PAGE>

                                    Part III

Item 10.  DIRECTORS AND  EXECUTIVE  OFFICERS OF THE  REGISTRANT.

     Members of the Board of the  Directors  and/or  Executive  Officers  of the
Registrant, and further information concerning them are as follows:

        Name                            Age                   Position
        ----                            ---                   --------

        Maynard M. Moe                   55           President, Chief Executive
                                                      Officer and Director

        Kerry L. Weger                   50           Secretary-Treasurer
                                                      Director

        George Shutt                     76           Director

        John F. Mayer                    55           Director

        Sigurd "Morris" Mathisen         64           Vice-President

     There are no family  relationships among the current Directors and Officers
of the Company.

     Maynard M. Moe, age 55, President,  Chief Executive Officer and a Director,
     he was elected to these  positions  by the Board of Directors on October 8,
     1993. He was a Vice-President from January 20, 1993 to October 8, 1993. Mr.
     Moe was first hired as a consultant by the Registrant to handle  day-to-day
     operations of Ramex as well as shareholder  relations.  He attended Eastern
     Washington  College of Education in 1959 and 1960.  He attended the Spokane
     Community College for Oil Advance Burner Technology  courses in 1965 and he
     received his oil burner mechanics  license in 1965. Prior to his consulting
     work with  Ramex,  Mr. Moe was a  stockbroker  with  Dillon  Securities  in
     Spokane,  Washington from 1978 to 1992. Mr. Moe obtained a Washington State
     Series 63, NASD Series 7 and Principle  Series 23 Licenses.  Mr. Moe served
     as a committee  chairman  and vice  president  and  director of the Spokane
     Stock Exchange for eighteen  months.  On August 31, 1992, Mr. Moe's chapter
     11  plan  of   reorganization   was   confirmed,   in   order  to  pay  all
     personal/business  debts in full over three years.  On March 13, 1996,  Mr.
     Moe received a conformed  copy of the Final  Decree from the Court  closing
     this case.  

<PAGE>

     During the past ten years Mr. Moe has worked with different  companies as a
     consultant for shareholder relations.

     Kerry L. Weger, age 50, a Director and  Secretary-Treasurer  since June 22,
     1992. Mr. Weger attended Indiana University and received a B.A. in Business
     and a J.D.  from the  Indiana  University  School  of Law in 1971.  He is a
     member of the Indiana and Michigan  State Bar  Associations.  Mr. Weger has
     been in the  continuous  practice of law for twenty  years and is currently
     practicing  law in the State of Indiana.  His area of practice  encompasses
     oil and gas and corporate  law. Mr. Weger has  represented  several oil and
     gas drilling and  development  companies and is familiar with all phases of
     drilling and development. Mr. Weger is active in his community, is a member
     of the Bloomington  Planning  Commission,  the Chamber of Commerce  Erosion
     Development  Committee and a past member of the  Bloomington  Little League
     Board of Directors and Monroe County Economic Development Council.

     George  Shutt,  age 76, a  Director  since  June  22,  1992.  Mr.  Shutt is
     presently  the  owner  and  sole  proprietor  of GESCO  Consultants.  GESCO
     Consultants provides consulting and manufacturing  representative  services
     to selected  segments of the  aerospace  industry.  Prior to forming  GESCO
     Consultants in 1981, Mr. Shutt was employed by Hughes Aircraft  Company for
     thirty years in various capacities,  including subcontract's administrator,
     project engineer, manufacturing planning for complex electronic systems and
     manufacturing supervisor.  Mr. Shutt also worked for Ford Motor Company for
     five years in commercial sales and development of specialized vehicles. Mr.
     Shutt has worked  variously  for  Lockheed  Aircraft  Co. in  Research  and
     Development Department.  He was with the U.S. Air Force as an instructor on
     instrument flying techniques.

     John F. Mayer, age 55, a Director since October,  1988. President and Chief
     Executive  Officer  from June 22,  1992  until his  resignation  from these
     positions  effective  October 1, 1993. Mr. Mayer attended  Southwest  Texas
     Junior  College  (Associate  of Arts  degree),  Colorado  State  University
     (Bachelor  of Science  degree) and the  University  of Kansas (two years of
     post  graduate  work in  physics).  Mr.  Mayer  retired  in 1992 from civil
     service where he was employed as a civilian  scientist  and weapons  system
     analyst with the Department of Defense for 20 years, 13 years of which were
     in management positions.


<PAGE>

     Sigurd "Morris" Mathisen,  age 64, a Vice-President since October 29, 1993.
     Mr. Mathisen  attended the Virginia  Polytechnical  Institute,  majoring in
     Civil Engineering/Building Construction. Mr. Mathisen's work experience has
     included  management,  administration,   planning,  budgeting,  scheduling,
     contracting,  inspecting, directing all phases of construction, with profit
     and loss responsibility on all types of commercial,  industrial, fossil and
     nuclear power generation, and hazardous waste facilities.

     Mr. Mathisen was instrumental in the Installation  baghouses,  wet scrubber
     systems, and or electrostatic  precipitators on four separate 500 mega watt
     fossil fuel power  generation  units.  Four plus years  assistant  Resident
     Manager for J.A. Jones Construction Co. at Hanford, Washington. Responsible
     for  direction  of  1,500  employees  plus   subcontractors,   on  new  and
     maintenance construction of nuclear and nuclear waste facilities.  Involved
     with the construction of many other multi-million  dollar projects,  with a
     total of twenty six.

     The terms of such  Directors  and  Officers are for a period of one year or
until their successors are duly elected and qualified.

Item 11.       REMUNERATION OF DIRECTORS AND OFFICERS.

     Officers:

     For the fiscal year ended  January 31,  1997,  none of the  Officers of the
Registrant had cash compensation which exceeded $60,000.00

     Directors:

     The Directors of the Company received no compensation for services rendered
the  Registrant  during the  fiscal  year ended  January  31,  1997 in excess of
$60,000.00.

     Stock Option and Compensation Bonus Plan:

     Ramex's Stock Option and  Compensation  Bonus Plan (the "Plan")  authorizes
3,000,000   shares  of  Common  Stock  for  issuance  to  directors,   officers,
key-employees, consultants and advisors who contribute materially to the success
and profitability of Ramex and who provide key services,  consultation or advice
to Ramex.  As of January 31, 1991,  there were 666,666 shares issued pursuant to
the Plan.  The Plan is intended to


<PAGE>

     advance the interests of Ramex by  encouraging  and enabling the directors,
     officers,  key employees,  consultants and advisors to acquire and retain a
     proprietary  interest  in  Ramex by  ownership  of its  stock.  The Plan is
     administered  by the Board of Directors.  The exercise price of each option
     is to be not less than 76% of the fair market  value of the Common Stock on
     the date of grant or issuance. An option may be exercised for the following
     maximum  amounts:  33% of the amount  granted  any time at least six months
     subsequent to the date of grant,  an additional  33% of the amount  granted
     any time at least 15 months  subsequent  to the date of grant an additional
     34% of the amount  granted  any time at least 27 months  subsequent  to the
     date of grant.  Options  under the Plan may not be sold,  pledged,  signed,
     hypothecated,  transferred or otherwise  disposed of and are exercised only
     by the Optionee or upon his death by his legal representative.

     In the event of  termination  for cause of an  Optionee's  employment  with
     Ramex, the options shall expire  immediately upon such termination.  If the
     Optionee  dies  during his  employment  with Ramex,  his  options  shall be
     exercisable by his personal representative to the extent the Optionee would
     have been  entitled to exercise such option if he had continued to live and
     be in such  employment,  for the  lesser of one year after his death or for
     the remaining term of the Option.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The following table sets forth  information,  as of January 31, 1997, as to
each person who is known to the Company to be the beneficial  owner of more than
5% of the Common Stock of the Company,  and as to the security ownership of each
Director of the  Company  and all  Officers  and  Directors  of the Company as a
group. Except where specifically noted, each person listed in the table has sole
voting and investment power to the shares listed.


                               Security Ownership

Name and Address                            Amount and Nature         Percent
of Beneficial Owner                       of Beneficial Ownership   of Class (2)
-------------------                       -----------------------   ------------

Donald L. Walker (1)                                 4,339                0.031%
1501 Azure Hills
Van Buren, Arkansas 72956

<PAGE>

Gail Sue Walker (2)                                    -0-                   -0-
1501 Azure Hills
Van Buren, Arkansas 72956

Lucros International Corp. (2)                     570,000               4.114%
P. O. Box 647
Van Buren, Arkansas  72956

Greenway Corporation (2)                           551,500               3.980%
P. O. Box 647
Van Buren, Arkansas 72956

Maynard M. Moe                                     610,220               4.405%
President, Chief Executive
Officer, Director
2204 W. Wellesley
Spokane, WA 99205

John F. Mayer                                      392,000               2.830%
Director
534 Valley Drive
Kerrville, Texas 78028

George Shutt                                        42,450               0.306%
Director
17582 Meredith Dr. 
Santa Ana, CA  92705

Kerry L. Weger                                      71,000               0.513%
Secretary-Treasurer, Director
635 N. College Avenue
Bloomington, IN 47404

Sigurd "Morris" Mathisen                            46,200               0.333%
Vice-President
6415 N. Fleming
Spokane, WA 99208

All Directors and                                                        8.387%
Executive Officers
as a Group (5 persons)
as of the date of this
Form 10-K 


<PAGE>

(1)  Mr. Walker is the husband of Gail Sue Walker.

(2)  Mrs. Walker is the sole shareholder of Lucros International Corporation and
     Greenway  Corporation,  therefore  this reflects that  ownership/beneficial
     interest as of January 31, 1997.

Item 13. INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS

     There were no  transactions  between  management and Registrant  during the
period covered by this report.

<PAGE>

                                           Part IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

     (a) (1) The financial statements listed in the following index are filed as
part of this Annual Report on Form 10-K:

                                                                 Sequential Page

     Consent of Auditor                                               28
     Report of Independent Auditor                                    31
     Statement of Financial Position at                               32
     January 31, 1997, 1996 and 1995.
     Statement of Operations for the Years ended                       33
     January 31, 1997, 1996 and 1995.
     Statement of Changes in Stockholders' Equity                     35
       for the years ended January 31, 1997, 1996 and 1995.
     Statement  of Cash Flows for the Years Ended                     36
       January 31,  1997,  1996 and 1995.
     Notes to Financial Statements at January 31, 1997, 1996
     and 1995.                                                     36-37

     a) (2) Financial  Statement Schedules are not filed with this Annual Report
     on Form 10-K because the Schedules are either  inapplicable or the required
     information is presented in the Financial Statements or Notes hereto.

     (a) (3) Exhibits*.

     (b)  There  were no reports  filed on Form 8-K  during  the  fiscal  fourth
          quarter ended January 31, 1997.

<PAGE>

                                          SIGNATURES

        Pursuant to the  requirements  of Section 13 of 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                            Ramex Synfuels International, Inc.
                                            Registrant


Dated:   April 4, 1997                  By: sgd. Maynard M. Moe
                                            ----------------------------
                                            Maynard M. Moe
                                            President, CEO and Director

        Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,
this report has been signed by the following persons on behalf of the Registrant
and on the dates indicated.


Dated:   April 4, 1997                  By: sgd. Maynard M. Moe
                                            ----------------------------
                                            Maynard M. Moe
                                            President, Director and
                                            Chief Executive Officer


Dated:   April 4, 1997                  By: sgd. Kerry L. Weger
                                            -------------------------------
                                            Kerry L. Weger, Secretary-Treasurer
                                            and Director


Dated:   April 4, 1997                  By: sgd. George E. Shutt
                                            ------------------------------
                                            George E. Shutt
                                            Director


Dated:   April 4, 1997                  By: sgd. John F. Mayer
                                            ----------------------------
                                            John F. Mayer
                                            Director

<PAGE>



                                 RAMEX SYNFUELS
                               INTERNATIONAL, INC.


                              FINANCIAL STATEMENTS




<PAGE>




                                    Contents

<TABLE>
<CAPTION>
                                                                              PAGE
                                                                              ----

<S>                                                                             <C>
 Independent Auditor's Report                                                   1

 Statement of Financial Position as of January 31, 1997 and 1996                2

 Statement of Operations For the Years Ended January 31, 1997, 1996 and 1995    3

 Statement of Changes in Stockholders' Equity For the Years Ended January 31,
 1997,1996 and 1995                                                             4

 Statement of Cash Flows For the Years Ended January 31, 1997, 1996 and 1995    5

 Notes to Financial Statements                                                 6-8
</TABLE>





<PAGE>

 To The Board of Directors of
 Ramex Synfuels International, Inc.


                          INDEPENDENT AUDITOR'S REPORT


I  have  audited  the  statement  of  financial   position  of  Ramex   Synfuels
International,  Inc. as of January 31, 1997 and January 31, 1996 and the related
statements of Operations,  changes in stockholders'  equity,  and cash flows for
the years ended January 31, 1997,  January 31, 1996 and January 31, 1995.  These
financial  statements are the  responsibility  of the Company's  management.  My
responsibility  is to express an opinion on these financial  statements based on
my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Ramex Synfuels international,  Inc.
as of January 31,  1997 and  January  31,  1996 and the  results of  operations,
changes in  stockholders'  equity and cash flows for the years ended January 31,
1997,  January  31,  1996 and January  31,  1995 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 shown in the financial  statements,
the Company has no working capital and substantial liabilities. These conditions
raise substantial doubt about the Company's ability to continue in business. The
financial  statements do not include any adjustments  that might result from the
inability to continue in business.



 Terrence J. Dunne
 Certified Public Accountant

 Spokane, Washington
 March 28, 1997

<PAGE>

RAMEX SYNFUELS INTERNATIONAL, INC.         Statement of Financial Position as of
                                           January 31, 1997 and January 31, 1996

                                     ASSETS


                                                     January 31,    January 31,
                                                        1997           1996
                                                     -----------    -----------
CURRENT ASSETS
    Cash                                             $     2,209    $     9,408
                                                     -----------    -----------

TOTAL ASSETS                                         $     2,209    $     9,408
                                                     ===========    ===========


                             LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES
    Accounts Payable                                 $    62,782    $     62,831
    Due to Officers and Directors                         93,221          81,221
                                                     -----------    -----------
        Total Current Liabilities                        156,003         144,052
                                                     -----------    -----------


STOCKHOLDERS' EQUITY
    Common Stock $.01 Par Value; 125,000,000
      Shares Authorized, 13,853,465 Shares Issued
      and outstanding as of January 31, 1996;
      13,853,465 shares issued and outstanding
      as of January 31, 1997                             138,534        138,534
Additional Paid-In Capital                             4,577,237      4,576,937
Accumulated Deficit                                   (4,869,265)    (4,850,115)
                                                     -----------    -----------
        Total Stockholders' Equity                      (153,794)      (134,644)
                                                     -----------    -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY           $     2,209    $     9,408
                                                     ===========    ===========


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



<PAGE>


RAMEX SYNFUELS INTERNATIONAL, INC.   Statement of Operations for the Years Ended
                                     January 31, 1997, 1996 and 1995

<TABLE>
<CAPTION>
                                            January 31,       January 31,         January 31,
                                               1997              1996                1995
                                             --------          ---------           -------- 
<S>                                          <C>               <C>                 <C>     
REVENUE                                      $   -0-           $    -0-            $   -0-
                                             --------          ---------           -------- 

GENERAL AND ADMINISTRATIVE EXPENSES            19,168             21,080             15,622
                                             --------          ---------           -------- 

(Loss) From Operations                        (19,168)           (21,080)           (15,622)

OTHER INCOME
        Interest                                   18
        Forgiveness of debt (Note 3)                              17,692
                                             --------          ---------           -------- 

            Total other income                     18             17,692
                                             --------          ---------           -------- 


NET (LOSS)                                   $(19,150)         $  (3,388)          $(15,622)
                                             ========          =========           ======== 

NET (LOSS) PER SHARE                         $   (NIL)         $    (NIL)          $   (NIL)
                                             ========          =========           ======== 
</TABLE>


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


<PAGE>

RAMEX SYNFUELS INTERNATIONAL, INC.   
                                Statement of Changes in Stockholders' Equity For
                                the Years Ended January 31, 1997, 1996 and 1995


<TABLE>
<CAPTION>
                                                                         Additional
                                         Common Stock                     Paid-In               Accumulated
                                     Shares         Amount                Capital                (Deficit)                 Total
                                   ----------      ---------             ----------             -----------             ----------- 
<S>                               <C>               <C>                  <C>                    <C>                     <C>         
Balances as of
January 31, 1994                  123,984,155       $123,984             $4,562,737             $(4,831,105)            $  (144,384)

Common stock issued for
   services at $..005 per share       550,000            550                  2,200                                           2,750

Reverse split of common
  stock on a 1 for 10 basis
  and increase in par value
  from $.001 per share to
  $.01 per share                 (112,080,690)

Common stock issued for
   cash at $..05 per share            300,000          3,000                 12,000                                          15,000

Net (loss) for the year
   January 31, 1995                                                                                 (15,622)                (15,622)
                                   ----------      ---------             ----------             -----------             ----------- 

Balances as of
January 31, 1995                   12,753,465        127,534              4,576,937              (4,846,727)               (142,256)

Common stock issued for
   cash at $..01 per share          1,100,000         11,000                                                                 11,000

Net (loss) for the year
   January 31, 1996                                                                                  (3,388)                 (3,388)
                                   ----------      ---------             ----------             -----------             ----------- 

Balances as of
January 31, 1996                   13,853,465        138,534              4,576,937              (4,850,115)               (134,644)

Cancellation of 30,000
   shares of common stock             (30,000)          (300)                   300

Net (loss) for the year
   January 31, 1996                                                                                 (19,150)                (19,150)
                                   ----------      ---------             ----------             -----------             ----------- 

Balances as of
   January 31, 1997                13,823,465      $ 138,234             $4,577,237             $(4,869,265)            $  (153,794)
                                   ==========      =========             ==========             ===========             =========== 
</TABLE>


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


<PAGE>


RAMEX SYNFUELS INTERNATIONAL, INC.         Statement of Cash Flows For the Years
                                           Ended January 31, 1997, 1996 and 1995



<TABLE>
<CAPTION>
                                                               January 31,         January 31,         January 31,
                                                                  1996                1995                1996
                                                                --------            --------            --------
<S>                                                             <C>                 <C>                 <C>      
CASH FLOWS FROM
OPERATING ACTIVITIES
    Net (Loss)                                                  $(19,150)           $ (3,388)           $(15,622)
    Adjustments for non-cash expenses:
          Common stock issued for services                                                                 2,750
     Increase (decrease) in accounts payable
          amounts due officer and directors                       11,951               1,545              (2,663)
                                                                --------            --------            --------

            Net cash used from operating activities               (7,199)             (1,843)            (15,535)
                                                                --------            --------            --------

CASH FLOWS FROM
FINANCING ACTIVITIES
    Proceeds from sale of common stock                                                11,000              15,000
                                                                --------            --------            --------

NET INCREASE (DECREASE) IN CASH                                   (7,199)              9,157                (535)

CASH AT BEGINNING OF YEAR                                          9,408                 251                 786
                                                                --------            --------            --------

CASH AT END OF YEAR                                             $  2,209            $  9,408            $    251
                                                                ========            ========            ========
</TABLE>


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


<PAGE>





NOTES TO FINANCIAL STATEMENTS                      Notes to Financial Statements

NOTE I -  ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

          The  history  of the  Company  began when  Cache Oil  Corporation  was
          incorporated in March,  1980,  under the laws of the State of Utah. In
          July,   198O,   Cache  Oil  Corporation   purchased,   in  a  business
          combination,  all of the outstanding common stock of Ramex Horn, Inc.,
          a Wyoming corporation which was subsequently  dissolved.  In December,
          1980,  Cache Oil merged with a wholly owned  subsidiary of Ramex Horn,
          Inc., Ramex Synthetic Fuels  International,  Inc., a Utah corporation,
          with the name of the surviving Utah corporation being changed to Ramex
          Synfuels  International,  Inc. The Company had been in the development
          stage until 1992, when all operations closed.

          In September, 1993, the Company as the general partner in newly formed
          Ramex Research  Partners,  Ltd., a Texas limited  partnership,  raised
          $110,000 for further development of an oil shale gasification process.
          This process is  protected by a patent  (issued on May 29, 1990) owned
          by the Company. In return for this funding, the Company has granted to
          the limited  partners a limited term  royalty  payable from the future
          proceeds,  if  any,  of gas  produced  from  the  application  of this
          process.  This limited term  royalty will  continue  until the limited
          partners have received the greater of (1) payments  aggregating  1.10%
          of the net profits derived from the first 1,000 productive wells using
          this  process,  or (2)  payments  aggregating  ten times  the  limited
          partners'  original  investment.  On December  13,  1993,  the Company
          entered into a contractual agreement with Southwest Research Institute
          of San Antonio,  Texas,  for the first phase  testing of this patented
          gasification process. Ramex Research Partners,  Ltd., has provided the
          funding for this testing.

          Equipment  is  recorded  at cost and  depreciated  over the  estimated
          useful life on straight-line basis.

          Common stock issued for expenses, services, and payment of liabilities
          is accounted for at the  estimated  fair market value as determined by
          the board of directors at the date of issue.

          Intangible  oil and gas  drilling  costs  (extraction  processes)  are
          amortized on a straight-line basis over ten years

          Earnings  (losses) per share are computed on the basis of the weighted
          average number of common outstanding shares during the year.

          The  preparation of financial  statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and assumptions  that affect certain reported amounts and disclosures.
          Accordingly, actual results could differ from those estimates.



<PAGE>

 NOTES TO FINANCIAL STATEMENTS                     Notes to Financial Statements

NOTE 2 -  ACCOUNTS PAYABLE

          For the years  ended  January  31,  1997 and  January  317  1996,  two
          creditors  had  outstanding  judgments  against the  Company  totaling
          $23,525.  Other trade  payables  comprised the  remaining  balances as
          follows:

              January 31,                     Amount
              -----------                     ------

                 1996                        $39,306
                                             -------

                 1997                        $39.257
                                             -------

NOTE 3 -  FORGIVENESS OF DEBT

          A former president of the Company paid a liability of $17,692,  during
          the fiscal  year  ended  January  31,  1996,  and he is not  expecting
          repayment from the Company;  therefore, this results in forgiveness of
          debt to the Company.

NOTE 4 -  DUE TO OFFICERS AND DIRECTORS AND RELATED PARTY TRANSACTIONS

          As of  January  31,  1997,  the  Company  owed the  current  president
          (Maynard  Moe) $57,400 for  consulting  fees,  and owed $10,000 to the
          current  secretary-treasurer  (Kerry  Weger),  and  $25,821 to another
          former president (John Mayer) for advances and expenses paid on behalf
          of the Company.  As of January 31, 1996,  the Company owed the current
          president  (Maynard Moe) $45,400 for consulting fees, and owed $10,000
          to the  current  secretary-treasurer  (Kerry  Weger),  and  $25,821 to
          another former  president  (John Mayer) for advances and expenses paid
          on behalf of the Company.

NOTE 5 -  STOCK OPTION AND COMPENSATION BONUS  PLAN

          The Company  originally  set aside  3,O00,000  shares of common  stock
          which is available for issuance to directors, officers, key employees,
          consultants and advisors who contribute to the success of the Company.
          This stock option plan is  administered  by the hoard of directors and
          the  exercise  price of each  option is not to be less than 76% of the
          fair  market  value  of the  common  stock  on the  date of  grant  or
          issuance.  Upon the  issuance  of a stock  option,  an  option  may be
          exercised for the following maximum amounts: 33% of the amount granted
          any time at least  six  months  subsequent  to the date of  grant,  an
          additional  33% of the  amount  granted  any time at  least 15  months
          subsequent to the date of grant,  and an additional  34% of the amount
          granted any time at least 27 months  subsequent  to the date of grant.
          Options  under  the  plan  may  not be  sold,  pledged,  hypothecated,
          transferred or otherwise  disposed of and are exercisable  only by the
          optionee  or,  upon his  death,  by his  legal  representative.  As of
          January  31,  1997,  there  were  2,333,334  shares  of  common  stock
          available to be issued under this plan.


<PAGE>


NOTES TO FINANCIAL STATEMENTS                      Notes to Financial Statements

NOTE 6 -  INCOME TAXES

          The Company has a net  operating  loss  carryover of $4,830,965 to the
          year ended January 31, 1998.  These loss  carryovers  will commence to
          expire in 1999.  The Company has not recorded a deferred tax asset for
          the possible benefit of these net operating loss carryovers because it
          is uncertain if the Company will have future taxable income.