SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10KSB

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

For the fiscal year ended:  September 30, 1999
Commission File No.:        33-9472-D


                         E'PRIME AEROSPACE CORPORATION
             (Exact name of registrant as specified in its charter)


       Colorado                                          59-2802081
(State of Incorporation)                       IRS Employer Identification No.

                 320 Indian River Avenue, Titusville, FL  32796
                    (Address of principal executive offices)

                                 407-269-0900
              (Registrant's telephone number, including area code)


Securities to be registered pursuant to Section 12(b) of the ACT: None

Securities to be registered pursuant to Section 12(g) of the ACT: Common Stock
- No Par Value

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing for the past 90 days. Yes__No_X_

The aggregate market value of the registrant's voting stock held by
non-affiliates of the registrant as of September 30, 1999 (based on the
average of the high and low bid quotations on that date) was $20,228,298.

As of December 31, 1999, the registrant has outstanding 749,883,407 shares
of common stock and 12,471,800 "B" Stock Purchase Warrants.

Documents incorporated by reference: None


<PAGE>   2
               E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                        (A Development Stage Company)

                     Index to Annual Report On Form 10KSB

                                                                       Page
Part I                                                                 ----
    Item  1 - Business                                                    3

    Item  2 - Properties                                                  4

    Item  3 - Legal Proceedings                                           4

    Item  4 - Submission of Matters to a Vote of Security Holders         4

Part II
    Item  5 - Market for the Registrant's Common Equity and Related
              Stockholder Matters                                         5

    Item  6 - Management's Discussion and Analysis of Financial
              Condition and Results of Operations                         6

    Item  7 - Financial Statements and Supplementary Data                 6

    Item  8 - Changes in and Disagreements with Accountants on
              Accounting and Financial Disclosure                         6

Part III
    Item 9 -  Directors and Executive Officers                            7

    Item 10 - Executive Compensation                                      8

    Item 11 - Security Ownership of Certain Beneficial Owners
              and Management                                              9

    Item 12 - Certain Relationships and Related Transactions              9

Part IV
    Item 13 - Exhibits, Financial Statements, Schedules and
              Reports on Form 8-K                                        10


Index to Financial Statements                                            12





<PAGE>   3
                                     PART I


Item 1. Business

E'Prime Aerospace Corporation and Subsidiaries (EPAC or the Company) was
established in February, 1987, to capitalize on the worldwide demand for
commercial satellite launching services.

In October, 1987, an agreement was signed with the United States Air Force
(USAF) which provided EPAC the use of technology based on the Peacekeeper
solid fuel missile system. As a result of this agreement, EPAC began the
development of the Eagle Series of launch vehicles. Eagle launch vehicles
are based on a modular design of solid propellant booster stages and a
bi-propellant liquid upper stage.

In early 1990, the Peacekeeper first stage motor was included in the
Strategic Arms Reduction Treaty (START) which was signed by both the
governments of the United States and the former Soviet Union. Accordingly,
pursuant to the execution of this treaty, the Company was severely restricted
in producing EPAC's first stage motor. For nine years, EPAC's development
concentrated towards the preservation of the technology developed during
the Peacekeeper program.

In 1998, using Peacekeeper baseline technology, EPAC's improved design
changes, and development of its ESM-9 first stage motor in a 100% commercial
environment, eliminated the ESM-9 from the START Treaty.

EPAC is marketing a range of launch vehicles with payload capabilities from
small communications satellites up to large multipurpose satellites of 20,000
pounds into a geosynchronous earth orbit. Light to medium lift single core
vehicles will be launched from a launch tube which propels the rocket some 200
feet into the air before the first stage is ignited. This "cold launch"
method increases the payload capability by approximately 10% and prevents
costly refurbishment to the launch facility. Flight hardware for the Eagle
Series launch vehicles will be produced by many of the same companies that
were responsible for the manufacture and supply of materials for the
Peacekeeper. By utilizing the experience of these suppliers, the track record
of reliability experienced during the Peacekeeper missile system program will
be carried forward into a commercial application.

EPAC has succeeded in evolving the technology of the Peacekeeper ICBM into
a commercial launch vehicle. Based on developments completed through February,
1999, EPAC is now proceeding with finance and contract negotiations. While
substantial additional capital is needed for the construction of commercial
launch facilities, management is confident in achieving this financial
objective. Although EPAC has met its vehicle objective, a time-frame for the
Company to establish profitable operations cannot be determined at this time.

Over the past several years, other companies have developed a range of
launch vehicles corresponding to the demand for commercial launch services.
The Company currently considers its principal competitors to be Arianespace
(Ariane), Lockheed Martin (Atlas, LLV), Boeing (Delta), Orbital Science
(Taurus), China (Longmarch) and several Russian programs.

As of September 30, 1999, the company had 5 full time employees.


<PAGE>   4
Item 2. Properties

The Company leases its corporate office of approximately 3,000 square feet in
Titusville, FL and occupies approximately 12,000 square feet of warehouse
space in Memphis, TN.

Substantially all of the development of the Company's launch technology as
well as management of overall operations is based in the corporate offices.
The space in Memphis is used primarily to warehouse EPAC launch hardware and
support equipment and will provide support during testing of the Company's
launch vehicle.

During the year ended September 30, 1993, the Company purchased certain
launch and support equipment from an agency of the United States government.
As a result of this purchase, a substantial amount of additional and related
equipment was transferred to EPAC. These acquisitions represent savings
of millions of dollars of non-recurring start-up costs. Most of the equipment
received, which is located at various facilities in the United States,
consists of the following:

     Missile system hardware
     Support equipment including computer hardware, electronic consoles and
          launch vehicle transportation and handling equipment
     Specialized tooling associated with missile system hardware

Most of the equipment acquired was primarily associated with the United
States' government Peacekeeper missile system. EPAC has incorporated the
Peacekeeper technology into the research and development of its launch systems
as more fully discussed in Item 1 of this filing.

The Company is currently negotiating the construction of launch facilities
at Kodiak, Alaska, Kennedy Space Center, Florida and a near equatorial
launch site.


Item 3. Legal Proceedings

The Company has been subject to legal proceedings and claims which have arisen
in the ordinary course of business. These claims have not and are not expected
to have a material effect on the financial position of the Company.


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

None

<PAGE>   5
                                    PART II


Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

The Company's common stock is traded on the over-the-counter market. Market
makers and other dealers provided bid and ask quotations of the Company's
stock and listed such quotations in the National Quotation Bureau, Inc.'s
"Pink Sheets".

The table below presents the range of high and low bid quotations of the
Company's securities. The quotations represent prices between dealers and do
not include retail markup, markdown, or commissions; hence, they do not
represent actual transactions.

                                 Quarter Ended
         ------------------------------------------------------------
         December 31       March 31        June 30       September 30
         ------------    ------------    ------------    ------------
  Year    High   Low      High   Low      High   Low      High   Low
  ----   -----  -----    -----  -----    -----  -----    -----  -----

  1998   .0570  .0250    .0330  .0120    .0320  .0170    .0970  .0260
  1999   .0210  .0200    .0440  .0400    .0260  .0260    .0280  .0260

The number of shareholders of the Company's common stock as of December 31,
1999 was 2,613.



<PAGE>   6
Item 6. Management's Discussion and Analysis of Financial Condition and
        Results of Operations

Liquidity and capital resources
As indicated herein, the Company has expended substantial funds in the
development of its business over the past several years. Sources of capital
during this time have included stock sales, advances from shareholders and
short term funding from Coleman Research Corporation and the Eckler Investor
Group. As of September 30, 1999, the Company has a working capital deficit of
$7,417,750.

In order to complete its development and reach full operational capability
and, in order to satisfy existing liabilities, the Company will need to
obtain substantial additional capital. Management is currently engaged in
negotiations to secure the necessary funds to complete implementation of its
launch technology, repay existing liabilities and fund facility construction. In
addition, the Company is concluding the development of its marketing
strategy (www.eprimeaerospace.com) and establishing a launching schedule.


Results of Operations
Since its inception, the Company has been in the development stage.
 Accordingly, the Company has not generated any revenues from operations
and has not projected significant revenues until its development stage
is completed and financing can be obtained for its operations. Through
the year ended September 30, 1999, the Company has incurred an accumulated
deficit of $7,165,152. Expenditures related to salaries and wages have been
incurred principally in the development of the Company's launch technology
systems.


Item 7. Financial Statements and Supplementary Data

The financial statements are filed as Item 14(a) of this Form 10KSB.


Item 8. Changes In and Disagreements With Accountants On Accounting and
        Financial Disclosure

None


<PAGE>   7
                                    Part III


Item 9.  Directors and Executive Officers

The directors and executive officers of the Company and certain information
regarding them are as follows :

Name                  Age           Office
------------------    ---    ---------------------------------
B. G. Davis            67    President and Director

Betty S. Davis         61    Secretary, Treasurer and Director

Richard L. Elrod       65    Director


Mr. B. G. Davis, President and Director of the company since its inception, has
37 years research, development, design, test and operations experience including
25 years in aerospace. From 1970 through 1987 he was President of E' Prime Labs
(1), a small private product development firm that developed simple devices,
complete chemical and biochemical processes, and complete plans for energy
conversion and recovery. He has some twenty granted or pending patents.

While employed by Boeing Aerospace Corporation, he was a member of the test
team on the Minuteman missile, with responsibilities for conducting and
supervising assembly, checkout and launch operations. He also had
responsibility to coordinate interface problems between research and
development and operational systems.

He was with the Lunar Orbiter program from 1965-1967, inception to
completion. Duties included design, build-up, assembly, test and installation
of all ground tracking and reconstruction equipment located at Goldstone
(California), Woomera (Australia), Madrid (Spain), and Cape Canaveral Air
Force Station (Florida).

On the Saturn program, he was design engineering manager from 1967-1972,
responsible for systems specifications and configurations on all Saturn V
ground support systems. He performed the design liaison for all booster first
state engineering hangs from the factory at Michoud (New Orleans) to Kennedy
Space Center. Mr. Davis retired from Boeing Aerospace Corporation in 1972.

Mr. Davis spends one hundred percent of his time with the Company.

E'Prime Labs, although owned by Mr. B. G. Davis, is unrelated to E'Prime
Aerospace Corporation. No asset transfers were made between the two
entities and no contracts exist between the two or are contemplated. Mr.
Davis does not dedicate any of his time currently to the operation of
E'Prime Labs.


<PAGE>   8
Item 10. Directors and Executive Officers (Continued)

Betty Scott Davis is Secretary, Treasurer and Director of the Company, a
position she has held since its inception. From 1962 to 1963, Mrs. Davis
served in contract administration for Boeing Aerospace Corporation. From
1963 through 1967 she was employed as Technical Editor and Engineering Aid
with Brown Engineering, a private aerospace engineering firm from Huntsville,
Alabama, and from 1973 through 1977 she served as administrative manager for
Watson Engineering and Construction Company, a small private engineering and
construction firm located in Cocoa, Florida.  From 1977 through 1987 she
served as controller and director with E' Prime Labs, a small private product
development laboratory in Titusville, Florida. Mrs. Davis spends one hundred
percent of her time with the Company.Betty Davis is the wife of B. G. Davis.

Richard L. Elrod has been a Director with EPAC since August 1, 1991. Mr.
Elrod worked with IBM Corporation for 26 years in a number of administrative,
marketing and management positions of which his last 8 years were with the
personal computer division. He served as Vice President/Director with Texas
American Group, Inc. and Halter Venture Corporation and one year as
President/Director with Halter Venture before his resignation when the company
was sold.


Item 11. Executive Compensation
                                                                Other
                                                                Compen-
Name                            Year     Salary $    Bonus $    sation
---------------------------  ---------  ---------  ---------  ---------
Salary Paid
-----------
B. G. Davis                     1999            0          0          0
  President                     1998            0          0          0


Betty Davis                     1999       18,461          0          0
  Secretary, Treasurer          1997            0          0          0


Salary Accrued
--------------
B. G. Davis                     1999      300,000          0          0
  President                     1998      300,000          0          0


Betty Davis                     1999      231,538          0          0
  Secretary, Treasurer          1998      250,000          0          0


<PAGE>   9
Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information regarding ownership of the
Company's common stock as of September 30, 1999: (i) each person who is known
by the Company to own beneficially more than five percent (5%) of the
Company's common stock; (ii) each of the Company's directors; and (iii) by
all directors and officers of the Company as a group.

                             Amount and Nature of
Name and Address of           Beneficial Owners      Percent of
 Beneficial Owner                  (Shares)             Class
--------------------------   --------------------    ----------
B. G. Davis                      476,800,000            63.64 %
President, Director
Titusville, Fl 32782

Richard Elrod                      1,023,029              .14 %
Director
Houston, TX 77269

All Directors and Officers       ___________            _______
As a Group                       477,923,029            63.78 %
                                 ===========            =======


Item 12. Certain Relationships and Related Transactions

During the two year period ended September 30, 1999, the president and
principal stockholder and certain employees have made advances to the
Company. The advances are noninterest bearing and were made principally
for working capital purposes. These advances are included in due to related
parties in the accompanying consolidated balance sheet.

Also included in due to related parties were unpaid salaries and wages net
of advances made to directors (officers and principal stockholders) of the
Company.


<PAGE>  10
                                    PART IV


Item 13. Exhibits, Financial Statements, Schedules and Reports on Form 8-K

(a)    (1) Financial Statements:
              The financial statements listed in the accompanying Index to
              Financial Statements are filed as part of this Form 10KSB

       (2) Financial Schedules:
              No financial schedules are filed as part of this Form 10KSB

       (3) Exhibits included herein:
              Articles of Incorporation*
              By-Laws*

(b)    Reports on Form 8-K:
              No reports on form 8-K were filed during the year ended
              September 30, 1999


*Incorporated by reference to the Exhibits to the Company's Registration
Statement No. 33-9472-D, on Form S-18



<PAGE>  11
                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, E' Prime Aerospace Corporation has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized:

                         E' PRIME AEROSPACE CORPORATION

s/B. G. Davis
By: B. G. Davis, President     Date: February 10, 2000



Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed by the following persons on behalf of the Company and
in the capacities and on the dates indicated:



s/B. G. Davis
B. G. Davis, Director          Date: February 10, 2000



s/Betty S. Davis
Betty S. Davis, Director       Date: February 10, 2000







<PAGE>  12
                  E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                           (A Development Stage Company)

                           Index to Financial Statements

                                                                  Page
                                                                  ----
Independent Auditors' Report                                        13

Financial Statements

      Consolidated Balance Sheet                                    14

      Consolidated Statements of Operations                         16

      Consolidated Statements of Stockholders' Deficit              17

      Consolidated Statements of Cash Flows                         18

Notes to Financial Statements                                       20


<PAGE>  13
                          Independent Auditors' Report

The Shareholders and Board of Directors
E'Prime Aerospace Corporation:

We have audited the accompanying consolidated balance sheets of E'Prime
Aerospace Corporation and Subsidiaries (a development stage company) as of
September 30, 1999, and the related consolidated statements of
operations, stockholders' deficit and cash flows for the years ended
September 30, 1999 and 1998 and for the cumulative development stage from
February 20, 1987 (inception) to September 30, 1999. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of E'Prime
Aerospace Corporation and Subsidiaries at September 30, 1999, and the results
of their operations and their cash flows for the years ended September 30,
1999 and 1998, and for the cumulative development stage from February 20,
1987 (inception) to September 30, 1999, in conformity with generally
accepted accounting principles.

The accompanying consolidated financial statements have been prepared
assuming that E'Prime Aerospace Corporation and Subsidiaries will continue
as a going concern. As discussed in notes 1 and 8 to the consolidated financial
statements, the Company's cumulative losses during the development period,
the net capital deficiency and the need to obtain substantial additional
funding to complete its development, raises substantial doubt about the
entity's ability to continue as a going concern. Management's plans and
intentions with regard to these matters are discussed in note 8. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

January 19, 2000

<PAGE>  14
<TABLE>
     E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
              (A Development Stage Company)

               Consolidated Balance Sheet

                   September 30, 1999

<CAPTION>
<S>                                           <C>
           Assets

Current assets:
 Cash and cash equivalents                    $        142
 Prepaid expenses                                    2,400
                                                -----------
     Total current assets                            2,542
                                                -----------
Property and equipment, at cost:
 Computer equipment and software                    34,014
 Office furniture and equipment                     57,432
 Machinery and equipment                           233,654
                                                -----------
                                                   325,100
   Less accumulated depreciation                   (81,838)
                                                -----------
     Property and equipment, net                   243,262
                                                -----------
Deposits                                             9,336
                                                -----------
     Total assets                             $    255,140
                                                ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>  15
<TABLE>
     E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
              (A Development Stage Company)

         Consolidated Balance Sheet (Continued)

                   September 30, 1999

<CAPTION>
<S>                                           <C>
   Liabilities and Stockholders' Deficit

Current liabilities:
 Notes payable                                $  1,486,728
 Due to related parties                          2,033,548
 Accounts payable                                  388,808
 Accrued salaries, wage and payroll taxes        1,995,344
 Accrued consultant fees                           123,866
 Accrued interest payable                        1,391,998
                                               ------------
     Total current liabilities                   7,420,292

Stockholders' deficit:
 Common stock, no par value, 900,000,000
   shares authorized: 749,196,240 issued and
   outstanding                                   7,643,165
 Additional paid-in capital                        212,000
 Deficit accumulated during the development
   period                                      (15,020,317)
                                               ------------
    Total stockholders' deficit                 (7,165,152)
                                               ------------
    Total liabilities and
      stockholders' deficit                    $   255,140
                                               ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>  16
<TABLE>
              E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                       (A Development Stage Company)

                   Consolidated Statements of Operations

<CAPTION>
                                                             Cumulative for
                                                             the period from
                             Year ended      Year ended     February 20, 1987
                            September 30,   September 30,    (inception) to
                                1999            1998        September 30, 1999
                            -------------   -------------   ------------------
<S>                          <C>              <C>             <C>
Revenue:
  Service revenue            $         -               -                5,000
                              -----------     -----------   ------------------
      Total revenue                    -               -                5,000
                              -----------     -----------   ------------------

Expenses:
  General and administrative   1,456,072         896,814           15,025,317
                              -----------     -----------   ------------------
      Total expenses           1,456,072         896,814           15,025,317
                              -----------     -----------   ------------------

      Net loss               $(1,456,072)       (896,814)         (15,020,317)
                              ===========     ===========   ==================

Basic EPS:
  Net loss per common share  $   (0.0020)        (0.0013)
                              ===========     ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>  17
<TABLE>
                                     E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                                              (A Development Stage Company)

                                    Consolidated Statements of Stockholders' Deficit

<CAPTION>
                                                                Common stock - no par
                                                              -------------------------  Additional   Deficit accumulated
                                                                Number of      Common       paid-in    during development
                                                                  shares        stock       capital          period
                                                              ------------   ----------   ---------   -------------------
<S>                                                           <C>            <C>          <C>               <C>
Balances at September 30, 1997                                 693,331,154   $6,526,568     212,000         (12,667,431)
Stock issued for services - $.01 per share                         550,000        5,500           -                   -
Stock issued for services - $.02 per share                       3,678,750       73,575           -                   -
Stock issued for services - $.025 per share                         24,000          600           -                   -
Stock issued for services - $.03 per share                         627,167       18,815           -                   -
Stock issued for services - $.04 per share                          11,250          450           -                   -
Stock issued for services - $.055 per share                         66,273        3,645           -                   -
Stock issued for repayment of debt - $.01 per share                600,000        6,000           -                   -
Stock issued for repayment of debt - $.0114 per share              350,000        4,000           -                   -
Stock issued for repayment of debt - $.015 per share                30,000          450           -                   -
Stock issued for repayment of debt - $.02 per share              2,625,000       52,500           -                   -
Stock issued for repayment of debt - $.025 per share               240,000        6,000           -                   -
Stock issued for repayment of debt - $.03 per share                188,334        5,650           -                   -
Stock issued for repayment of debt - $.04 per share                100,000        4,000           -                   -
Net loss for year ended September 30, 1998                               -            -           -            (896,814)
                                                              ------------     --------   ---------         ------------
Balance at September 30, 1998                                  702,421,928   $6,707,753     212,000         (13,564,245)
Stock issued for services - $.03 per share                       2,392,776       71,783           -                   -
Stock issued for services - $.036 per share                        303,333       35,920           -                   -
Stock issued for services - $.04 per share                         310,000       12,400           -                   -
Stock issued for services - $.05 per share                         170,100        8,505           -                   -
Stock issued for repayment of debt - $.08 per share              5,000,000       40,000           -                   -
Stock issued for repayment of debt - $.02 per share             37,357,983      747,160           -                   -
Stock issued for repayment of debt - $.036 per share             1,240,120       19,644           -                   -
Net loss for year ended September 30, 1999                               -            -           -          (1,456,072)
                                                              ------------   ----------    --------         ------------
Balances at September 30, 1999                                 749,196,240   $7,643,165     212,000         (15,020,317)
                                                              ============   ==========    ========         ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>  18
<TABLE>
                        E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                                (A Development Stage Company)

                            Consolidated Statements of Cash Flows

<CAPTION>
                                                                               Cumulative for
                                                                                the period from
                                                   Year ended    Year ended    February 20, 1987
                                                  September 30, September 30,   (inception) to
                                                      1999          1998      September 30, 1999
                                                  ------------- ------------- ------------------
<S>                                               <C>           <C>           <C>
Cash flows from operating activities:
  Net loss                                        $ (1,456,072)     (896,814)       (15,033,217)
Adjustments to reconcile net loss to cash
 (used in) operating activities:
  Depreciation and amortization                          1,348           716            190,200
  Loss on disposition of vehicles and equipment              -             -             32,683
  Loss on sale of asset held for sale                        -             -             14,000
  Write-off of amount due from affiliate                     -             -             39,021
  Write off of accrued expenses                              -             -           (711,333)
  Write off of note payable                                  -       (35,000)           (35,000)
  Shares issued for services rendered                  128,608       102,585          1,619,048
  Shares issued for interest and finance fee                 -             -          2,028,070
  Shares issued for settlement of litigation                 -             -             75,000
Cash provided by (used for) changes in:
    Other receivables                                    5,527        (1,000)                 -
    Prepaid expenses                                         -        (2,400)            (2,400)
    Deposits                                             3,781             -             (9,336)
    Due to related parties                             251,452       504,474          2,046,448
    Accounts payable                                    39,834        (2,201)           388,808
    Accrued salaries, wages and payroll taxes           62,445        81,347          1,995,344
    Accrued consultant fees                                  -             -            123,866
    Accrued interest payable                           166,471       169,693          1,391,998
    Accrued expenses                                         -             -            783,332
                                                  ------------- -------------       ------------
      Net cash (used in) operating
        activities                                    (796,606)      (78,600)        (5,063,468)
                                                  ------------- -------------       ------------
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>  19
<TABLE>
                               E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                                        (A Development Stage Company)

                              Consolidated Statements of Cash Flows (Continued)

<CAPTION>
                                                                              Cumulative for
                                                                              the period from
                                                   Year ended    Year ended   February 20, 1987
                                                  September 30, September 30,  (inception) to
                                                      1999          1998      September 30, 1999
                                                  ------------- ------------- -------------------
<S>                                               <C>           <C>           <C>
Cash flows from investing activities:
  Equipment acquisitions                   -           (10,610)            -            (493,908)
  Proceeds from disposition of vehicles                      -             -              30,307
  Proceeds from sale of asset held for sale                  -             -              46,000
  Increase in asset held for sale                            -             -             (60,000)
  Advances to affiliate                                      -             -             (39,021)
                                                  ------------- -------------  ------------------
    Net cash (used in) operating
      activities                                       (10,610)            -            (516,622)
                                                  ------------- ------------- -------------------
Cash flows from financing activities:
  Proceeds from issuance of notes payable                    -             -           2,156,683
  Shares issued for repayment of debt                  806,804        78,600           1,025,644
  Repayment of notes payable                                 -             -            (706,954)
  Organization costs                                         -             -              (2,544)
  Proceeds from issuance of common stock                     -             -           2,895,403
  Additional paid-in capital                                 -             -             212,000
                                                  ------------- ------------- -------------------
    Net cash provided by financing
      activities                                       806,804        78,600           5,580,232
                                                  ------------- ------------- -------------------
    Net increase (decrease) in cash                       (412)            -                 142

Cash at beginning of period                                554           544                   -
                                                  ------------- ------------- ------------- -----
Cash at end of period                             $        142           554                 142
                                                  ============= ============= ============= =====
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>  20
                 E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)

                   Notes to Consolidated Financial Statements


(1) Summary of Significant Accounting Policies

(a) Corporate Organization

E'Prime Aerospace Corporation (the Company or EPAC) has been in the
development stage since its incorporation in Florida on February 20,
1987. The Company is engaged in seeking to provide a reliable and
comprehensive payload and satellite launching service to industry and
government, both domestic and foreign.

As noted, the Company is in its development stage and has expended a
substantial amount of funds to date. At September 30, 1999, the Company
has a stockholder's deficit of $ 7,165,152. The Company needs substantial
additional capital to complete its development and to reach an operating
stage.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern, and therefore,
will recover the reported amount of its assets and satisfy its liabilities
on a timely basis in the normal course of its operations. See note 8 to the
consolidated financial statements for a discussion of management's plans and
intentions.

The consolidated financial statements of the Company include the accounts
of EPAC and two inactive subsidiaries.


(b) Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of one
year or less when purchased to be cash equivalents.


(c) Depreciation

Depreciation of property and equipment is computed by the straight-line
method over the estimated useful lives of the assets.


(d) Income Taxes

The Company uses the asset and liability method of accounting for income
taxes. Under the asset and liability method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statements carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period
that includes the enactment date. Deferred tax assets resulting
principally from operating losses have not been recognized.


<PAGE>  21
                 E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)

                   Notes to Consolidated Financial Statements


(e) Loss Per Share

Loss per share amounts are based on the weighted average shares outstanding
of 735,097,083 and 697,968,420 for the years ended September 30, 1999 and
1998 respectively. The B warrants described in note 4 have been excluded
from the computation because they are not dilutive.


(f) Use of Estimates

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


(g) Shares Issued for Services or in Payment of Debt

Shares issued for services or in payment of debt are recorded at the
estimated value of the stock at the date they are issued.


(2) Related Party Transactions

The president and principal stockholder and certain employees have made
advances to the Company. The advances are noninterest bearing and were made
principally for working capital purposes. These advances are included in due
to related parties in the accompanying consolidated balance sheet.

Also included in due to related parties were unpaid salaries and wages, net
of advances made to directors (officers and principal stockholders) of the
Company.


<PAGE>  22
                 E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)

                   Notes to Consolidated Financial Statements


(3) Notes Payable

Notes payable consist of the following at September 30, 1999:

Note payable to Eckler Investor Group (Eckler)    $  644,302

Note payable to the Coleman Research
  Corporation (Coleman) in the amount of
  $500,000 bearing interest at prime plus
  1%, secured by 5,555,555 shares of the
  Company's stock. The note is payable in
  principal installments of $167,000,
  $167,000 and $166,000 when proceeds are
  received from the sale of stock amount
  to $3,000,000, $4,000,000 and $5,000,000,
  respectively, (not including proceeds
  from the exercise of warrants or issuance
  of additional stock to existing stockholders)      500,000

Note payable of $142,500 earning interest at
  30%, collateralized by fixed assets                142,500

Note payable of $101,528 with no stated
  Interest rate, unsecured                           101,528

Note payable of $52,500 bearing interest
  at 15%, collateralized by fixed assets              52,500

Other various notes                                   45,898
                                                 ------------
                                                  $1,486,728
                                                 ============

<PAGE>  23
                 E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)

                   Notes to Consolidated Financial Statements


(3) Notes Payable (Continued)

The note payable to the Eckler Group provides for interest at 10%. Principal
and interest is payable from the proceeds of the conversion of the Series B
warrants (see note 4). Amounts remaining unpaid in connection with this
obligation upon expiration of the Series B warrants will be converted into
common stock of the Company at the rate of $.04 per share.

All notes payable are considered to be current on the accompanying balance
sheet.

(4) Common Stock

At September 30, 1999 the Company has outstanding Series B warrants that
entitles the holder to purchase one share of common stock at $.20 per share
on or at anytime before December 31, 2000. The Company has the right to
redeem the Series B warrants upon 30 days written notice, at $.0002 per
warrant, during the respective periods which the warrants are exercisable.
At September 30, 1999 and 1998, 12,471,800 shares were reserved for that
purpose.


(5) Property and Equipment Purchased

The Company has purchased certain launching and support equipment from an
agency of the U.S. Government for $233,654. As a result of this purchase,
EPAC acquired a substantial amount of related property at no additional cost
to the Company. Most of the equipment acquired was primarily associated with
the U.S. Government's discontinued "Peacekeeper" missile system and is
located at various facilities in the United States.

In connection with the receipt of the additional equipment as described
herein, the Company has not yet obtained clear evidence of title for all of
the equipment nor has it received a full and complete listing of the
property transferred from the U.S. Government. In addition, there is no
readily determinable market value associated with the property, most of
which was built and delivered for very specialized purposes. Since the
equipment is not presently being utilized, the Company has not begun
recording depreciation on these assets.


(6) General and Administrative Expenses

General and administrative expenses include interest expense of $369,289
and $104,453 for the years ended September 30, 1999 and 1998 respectively.


(7) Commitments and Contingencies

The Company maintains its principal offices in Titusville, Florida. The
lease is subject to seven one-year renewal periods at the discretion of the
Company. Currently, the office space is leased on a month-to-month basis.


<PAGE>  24
                 E'PRIME AEROSPACE CORPORATION AND SUBSIDIARIES
                          (A Development Stage Company)

                   Notes to Consolidated Financial Statements


(7) Commitments and Contingencies (Continued)

Total rental expense for the years ended September 30, 1999 and 1998 was
$26,624, and $16,176, respectively.

During the years ended September 30, 1999 and 1998, the Company has been
subject to legal proceedings and claims which have arisen in the ordinary
course of its business which have been settled without having a material
effect on the accompanying consolidated financial statements.


(8) Management Plans and Intentions

Commencing in 1990, the Company was prohibited by certain agencies of the
United States government from using and developing certain technology
originally provided by the United States Air Force (USAF) in connection with
management's plans to provide a comprehensive payload and satellite
launching service. The Company was informed that the prohibition was
associated with provisions of the Strategic Arms Reduction Treaty, (START)
as signed by the United States and the former Soviet Union.

As a result of the circumstances described above, the Company has
encountered difficulties in obtaining the necessary funds to effectively
develop its launching service. However, the Company's development of an
improved version of the "Peacekeeper" first stage motor in a 100% commercial
environment has eliminated it from the START Treaty.

During fiscal year 1998, the Company began the licensing process with the
Federal Aviation Authority and Kennedy Space Center. Based on development
completed through February, 1999, EPAC is proceeding with contract
negotiations.

Management anticipates, through a combination of additional debt but
primarily equity financing, that the Company will successfully complete the
remaining research and development of its launch technology, determine and
implement its overall marketing strategy and establish a viable schedule for
the testing and ultimate launching of commercial payloads.

However, as of September 30, 1999, the success of achieving the objectives
discussed above, as well as the ultimate profitability of the Company's
operations once the development stage has ended, cannot be determined at
this time.


(9) Related Party Transactions

During the year ended September 30, 1999, the Company issued 42,357,983
shares valued at $787,160 to an officer-stockholder as partial payment
on advances made to the Company.

During the year ended September 30, 1999, the Company incurred a $276,031
finance fee payable to an officer-shareholder of the Company relating to
amounts advanced from related parties. The finance fee is included in due
to related parties.


<PAGE>  25