SECURITIES AND EXCHANGE COMMISSION
                           Washington, D. C.  20549


                                  FORM 10-QSB


(MARK ONE)
   [X]         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999


                                      OR

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

               FOR THE TRANSITION PERIOD FROM _________________ TO
               _________________



                       Commission File Number   0-17594


                            USA BIOMASS CORPORATION
      (Exact name of small business issuer as specified in its charter)


               DELAWARE                               33-0329559
   (State or other jurisdiction of                 (I.R.S. Employer
    incorporation or organization)                Identification No.)


      52300 ENTERPRISE WAY, COACHELLA, CALIFORNIA         92236
      (Address of principal executive offices)          (Zip Code)

                                (760) 398-9520
             (Registrant's telephone number, including area code)


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


    The number of shares outstanding of issuer's only class of Common
Stock, $.002 par value, was 7,761,385 on November 15, 1999.


<PAGE>






                    PART I.  FINANCIAL INFORMATION



Item 1. Financial Statements



Introduction

     The consolidated financial statements have been prepared by USA Biomass
Corporation ("Company"), without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission.  Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations.  The Company believes that the disclo-
sures are adequate to make the information presented not misleading when read
in conjunction with the Company's consolidated financial statements for the
four months ended December 31, 1998 and the year ended August 31, 1998.  The
financial information presented reflects all adjustments, consisting only of
normal recurring adjustments, which are, in the opinion of management,
necessary for a fair statement of the results for the periods presented.

<PAGE>






                           USA Biomass Corporation



                Index to the Consolidated Financial Statements
                As of September 30, 1999 and December 31, 1998
      And For the Three and Nine Months Ended September 30, 1999 and 1998






     Consolidated Financial Statements for USA Biomass Corporation:

        Balance Sheets  . . . . . . . . . . . . . . . . . . . . . . F-2

        Statements of Operations  . . . . . . . . . . . . . . . . . F-5

        Statements of Shareholders' Equity    . . . . . . . . . . . F-7

        Statements of Cash Flows   . . . . . . . . . . . . . . . .  F-11

     Notes to the Financial Statements  . . . . . . . . . . . . . . F-14

<PAGE>
<TABLE>







                           USA Biomass Corporation

                         Consolidated Balance Sheets
                   September 30, 1999 and December 31, 1998
                                 (Unaudited)
                            (Amounts in Thousands)

                                    ASSETS

<CAPTION>
                                                   September 30,   December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>            <C>
Current assets:

  Cash and equivalents                                    $341          $801

  Accounts receivable                                    1,219           554

  Income taxes recoverable                                 -             293

  Other current assets                                     384           384

  Net current assets of discontinued
   operations                                            8,259         7,942
                                                    -----------   -----------
     Total current assets                               10,203         9,974

Property and equipment, net                              7,843         8,874

Note receivable, noncurrent                                -           7,650

Other assets                                                54           142

Intangible assets, net                                     400           449

Net noncurrent assets of discontinued
 operations                                              1,027           769
                                                    -----------   -----------
Total assets                                           $19,527       $27,858
                                                    ===========   ===========








<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                    F-2
</FN>


</TABLE>
<PAGE>
<TABLE>






                           USA Biomass Corporation

                         Consolidated Balance Sheets
                   September 30, 1999 and December 31, 1998
                                 (Unaudited)
                            (Amounts in Thousands)



                     LIABILITIES AND SHAREHOLDERS' EQUITY


<CAPTION>
                                                    September 30, December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>            <C>
Current liabilities:
  Accounts payable                                      $1,261        $2,303
  Line of credit                                           640           875
  Notes payable:
    Related parties                                      1,578         2,323
    Other                                                  906           721
  Capitalized lease obligations                            716           765
  Income taxes payable                                     -               6
  Accrued interest                                         567           252
                                                    -----------   -----------
     Total current liabilities                           5,668         7,245

Notes payable, net of current portion:
   Related parties                                       1,196           966
   Officers and directors                                  163           815
   Other                                                 2,234         6,417
Capitalized lease obligations, net of current
 portion                                                 2,878         3,538
Other noncurrent liabilities                                45           973
                                                    -----------   -----------
Total liabilities                                       12,184        19,954

Commitments and contingencies











<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                    F-3
</FN>



</TABLE>
<PAGE>
<TABLE>





                           USA Biomass Corporation

                         Consolidated Balance Sheets
                   September 30, 1999 and December 31, 1998
                                 (Unaudited)
                            (Amounts in Thousands)



               LIABILITIES AND SHAREHOLDERS' EQUITY, CONTINUED


<CAPTION>
                                                   September 30,  December 31,
                                                        1999           1998
                                                    -----------   -----------
<S>                                              <C>            <C>
Shareholders' equity:

  Preferred Stock (2,000,000 shares authorized):

   Series A, 9% Convertible Preferred Stock,
   $0.01 par value; cumulative nonvoting,
   $7,475,000 aggregate liquidation preference;
   812,500 shares authorized, 747,500 shares
   issued and outstanding.                                  $7            $7

   Series B,6% Convertible Preferred Stock,
   $0.01 par value; cumulative nonvoting,
   $4,044,140 aggregate liquidation preference;
   750,000 shares authorized, 404,414 shares
   issued and outstanding.                                   4             4

   Common stock, $0.002 par value; 25,000,000
   shares authorized, 7,761,385 shares issued
   and outstanding at September 30, 1999 and
   December 31, 1998.                                       16            16

   Additional paid-in capital                           21,970        21,970
   Accumulated earnings (deficit)                      (14,536)      (13,975)
   Treasury stock, at cost (24,250 common shares
    at September 30, 1999 and December 31, 1998)          (118)         (118)
                                                    -----------   -----------
      Total shareholders' equity                         7,343         7,904
                                                    -----------   -----------
   Total liabilities and shareholders' equity          $19,527       $27,858
                                                    ===========   ===========










<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                    F-4
</FN>

</TABLE>
<PAGE>
<TABLE>





                           USA Biomass Corporation

                     Consolidated Statements of Operations
            For the Three Months Ended September 30, 1999 and the
                    Three Months Ended September 30, 1998
                                 (Unaudited)

                (Amounts in Thousands, except per share data)


<CAPTION>
                                                   September 30, September 30,
                                                        1999           1998
                                                    -----------   -----------
<S>                                              <C>            <C>
Revenues                                                $1,965          $794

Costs and expenses:
  Cost of revenues                                       1,437         1,331
  General and administrative expenses                      652         1,877
  Loss on impairment of assets                             -           1,971
  Interest expense, net of interest income                 193           355
  (Gain) or loss on sale of assets                        (535)           88
                                                   -----------   -----------
                                                         1,747         5,622
                                                    -----------   -----------
Income or (Loss) from continuing operations
 before income taxes                                       218        (4,828)
(Expense)/benefit from income taxes                        -             208
                                                    -----------   -----------
Income or (loss) from continuing operations                218        (4,620)
                                                    -----------   -----------
Discontinued operations:
 Loss from discontinued operations                        (198)       (5,090)
 Loss from disposal of discontinued operations             -          (2,879)
                                                    -----------   -----------
Net income or (loss)                                       $20      $(12,589)
                                                    ===========   ===========



Loss from continuing operations per common
 share, basic and diluted                                $(0.00)        $(0.62)
                                                         ======         ======
Net loss per common share,
 basic and diluted                                       $(0.03)        $(1.66)
                                                         ======         ======






<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                    F-5
</FN>



</TABLE>
<PAGE>

<TABLE>





                           USA Biomass Corporation

                     Consolidated Statements of Operations
             For the Nine Months Ended September 30, 1999 and the
                    Nine Months Ended September 30, 1998
                                 (Unaudited)

                (Amounts in Thousands, except per share data)


<CAPTION>
                                                   September 30,  September 30,
                                                        1999           1998
                                                    -----------   -----------
<S>                                              <C>            <C>
Revenues                                                $5,869        $1,911

Costs and expenses:
  Cost of revenues                                       4,539         2,410
  General and administrative expenses                    1,512         2,944
  Change in estimated remediation costs                   (400)          -
  Loss on impairment of assets                             -           1,971
  Interest expense, net of interest income               1,104           535
  (Gain) or loss on sales of assets                       (523)          366
                                                    -----------   -----------
                                                         6,232         8,226
                                                    -----------   -----------
Loss from continuing operations
 before income taxes                                      (363)       (6,315)
(Expense)/benefit from income taxes                        -             714
                                                    -----------   -----------
Loss from continuing operations                           (363)       (5,601)
                                                    -----------   -----------
Discontinued operations:
 Loss from discontinued operations                        (198)       (7,080)
 Loss from disposal of discontinued operations             -          (2,879)
                                                    -----------   -----------
Net loss                                                 $(561)      (15,560)
                                                    ===========   ===========



Loss from continuing operations per common
 share, basic and diluted                                $(0.14)       $(0.81)
                                                         ======        ======
Net loss per common share,
 basic and diluted                                       $(0.16)       $(2.10)
                                                         ======        ======






<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                    F-6
</FN>



</TABLE>
<PAGE>

<TABLE>






                           USA Biomass Corporation

              Consolidated Statements of Shareholders' Equity
          For the Nine Months Ended September 30, 1999 and the Four
                Months ended December 31, 1998 (Unaudited)




<CAPTION>
                                    Series A         Series B
                                   Preferred        Preferred      Common
                                     Shares          Shares        Shares
                                    -------        ---------     ----------
<S>                              <C>            <C>           <C>
Balance, August 31, 1998            747,500          404,414      7,761,385

Net loss                              -                -              -
                                    -------        ---------     ----------
Balance, December 31, 1998          747,500          404,414      7,761,385

Net loss                              -                -              -
                                    -------        ---------     ----------
Balance, September 30, 1999         747,500          404,414      7,761,385
                                    =======        =========     ==========























<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                      F-7
</FN>
</TABLE>
<PAGE>
<TABLE>






                           USA Biomass Corporation

         Consolidated Statements of Shareholders' Equity, Continued
          For the Nine Months Ended September 30, 1999 and the Four
                 Months ended December 31, 1998 (Unaudited)



<CAPTION>

                                     Common          Series A     Series B
                                    Treasury        Preferred    Preferred
                                     Shares          Shares        Shares
                                    -------        ---------     ----------
<S>                              <C>            <C>          <C>
                                                     (Amounts in Thousands)

Balance, August 31, 1998            (24,250)          $7             $4

Net loss                              -                -              -
                                    -------        ---------     ----------
Balance, December 31, 1998          (24,250)           7              4

Net loss                              -                -              -
                                    -------        ---------     ----------
Balance, September 30, 1999         (24,250)          $7             $4
                                    =======        =========     ==========
























<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                      F-8
</FN>
</TABLE>
<PAGE>
<TABLE>





                           USA Biomass Corporation

         Consolidated Statements of Shareholders' Equity, Continued
          For the Nine Months Ended September 30, 1999 and the Four
                 Months ended December 31, 1998 (Unaudited)

                            (Amounts in Thousands)



<CAPTION>
                                                    Treasury     Additional
                                     Common          Common       Paid-in
                                     Stock           Stock        Capital
                                    -------        ---------     ----------
<S>                             <C>             <C>           <C>
Balance, August 31, 1998                $16           $(118)        $21,970

Net loss                              -                -              -
                                    -------        ---------     ----------
Balance, December 31, 1998               16            (118)         21,970

Net loss                              -                -              -
                                    -------        ---------     ----------
Balance, June 30, 1999                  $16           $(118)        $21,970
                                    =======        =========     ==========

<FN>





















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

                                      F-9
</FN>
</TABLE>
<PAGE>
<TABLE>







                           USA Biomass Corporation

         Consolidated Statements of Shareholders' Equity, Continued
          For the Nine Months Ended September 30, 1999 and the Four
                 Months ended December 31, 1998 (Unaudited)

                               (Amounts in Thousands)


<CAPTION>
                                                 Accumulated
                                             Earnings(Deficit)      Total
                                                 -----------    -----------
<S>                                        <C>                <C>
Balance, August 31, 1998                            $(13,024)        $8,855

Net loss                                                (951)          (951)
                                                 -----------    -----------
Balance, December 31, 1998                           (13,975)         7,904

Net loss                                                (561)          (561)
                                                 -----------    -----------
Balance, September 30, 1999                         $(14,536)        $7,343
                                                 ===========    ===========



















<FN>

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

                                       F-10
</FN>
</TABLE>
<PAGE>
<TABLE>





                           USA Biomass Corporation
                  Consolidated Statements of Cash Flows

           For the Nine Months Ended September 30, 1999 and 1998
                                (Unaudited)
                           (Amounts in Thousands)



<CAPTION>
                                                   September 30,  September 30,
                                                         1999          1998
                                                    -----------   -----------
<S>                                               <C>           <C>
Cash flows from operating activities:
 Net income (loss)                                        $(561)     $(15,560)
 Add loss from discontinued operations                      198         9,959
                                                    -----------   -----------
 Net loss from continuing operations                       (363)       (5,601)
 Adjustments to reconcile net loss to net cash
  used in operating activities:
   Depreciation and amortization                            759           236
   (Gain) loss on sale of assets                           (523)          366
   Loss on impairment of assets                             -           1,971
   Provision for settlement expense                         -             112
   Change in remediation costs                             (400)          -
 Decrease (increase) in assets:
   Accounts receivable                                     (165)         (251)
   Income taxes recoverable                                 293          (293)
   Other assets                                              88           610
 Increase (decrease) in liabilities:
   Accounts payable                                      (1,042)        1,812
   Income taxes payable                                      (6)          335
   Accrued interest payable                                 315           127
                                                    -----------   -----------
 Net cash provided by (used) in operating
  activities of continuing  operations                   (1,044)         (576)
 Net cash used in operating
  activities of discontinued operations                    (198)       (3,202)
                                                    -----------   -----------
Cash provided by (used) in operating activities          (1,242)       (3,778)
                                                    -----------   -----------












<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                      F-11
</FN>
</TABLE>
<PAGE>
<TABLE>





                           USA Biomass Corporation
                  Consolidated Statements of Cash Flows
             For the Nine Months Ended September 30, 1999 and 1998

                                (Unaudited)
                           (Amounts in Thousands)




<CAPTION>
                                                    September 30, September 30,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>            <C>
Cash flows provided by (used in) investing
activities:
 Purchases of property and equipment                      $(682)        $(143)
 Sales of property and equipment                            102           101
 Other                                                     (194)          -
                                                    -----------   -----------
Net cash provided by (used in) investing
 activities of continuing operations                       (774)          (42)
Net cash used in investing activities of
 discontinued operations                                   (575)        3,654
                                                    -----------   -----------
Cash used in investing activities                        (1,349)        3,612
Cash flows provided by (used in) financing
activities:
 Proceeds from sale of note                               7,500           -
 Proceeds from notes and loans                              365           249
 Repayment of notes, loans, leases                       (5,734)         (197)
 Dividends paid on Series A Preferred Stock                 -            (497)
                                                    -----------   -----------
Net cash provided by (used in) financing
 activities of continuing operations                      2,131          (445)
                                                    -----------   -----------
Net increase (decrease) in cash                            (460)         (611)

Cash and equivalents at beginning of period                 801           640
                                                    -----------   -----------
Cash and equivalents at end of period                      $341           $29
                                                    ===========   ===========









<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                      F-12
</FN>
</TABLE>
<PAGE>
<TABLE>





                           USA Biomass Corporation

                  Consolidated Statements of Cash Flows
          For the Nine Months Ended September 30, 1999 and the Four
                       Months ended December 31, 1998
                                (Unaudited)
                           (Amounts in Thousands)

              Supplemental Disclosures of Cash Flow Information



<CAPTION>
                                                   September 30,   December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>             <C>
Cash paid during the year for:
  Interest:
   Continuing operations                                 $1,088          $305
   Discontinued operations                                  147           450
                                                    -----------   -----------
                                                         $1,235          $755
                                                    ===========   ===========
  Income taxes                                            -             -
                                                    ===========   ===========
</TABLE>


<TABLE>

<CAPTION>
                           Supplemental Schedule of
      Non-Cash Investing and Financing Activities of Continuing Operations


<S>                                               <C>         <C>
Assets offset against liabilities:
  Related party receivables                          (1,131,000)        -
  Related party notes payables                        1,131,000         -





















<FN>
        The accompanying notes are an integral part of the consolidated
                             financial statements.

                                      F-13
</FN>
</TABLE>
<PAGE>


                           USA Biomass Corporation

                Notes to the Consolidated Financial Statements
                 For the Nine Months Ended September 30, 1999
            and the Four Months Ended December 31, 1998 (Unaudited)



1.  Description of the Company's Business

The continuing operations of USA Biomass Corporation (the "Company"), a Delaware
corporation, consist of waste transport, clean green waste processing, and tree
trimming services. In order to focus on expanding its biomass operation and its
waste transport operation, the Company's Board of Directors adopted a plan to
discontinue its agribusiness and real estate activities on December 23, 1998.
As a result, the agribusiness and real estate activities have been presented
as discontinued operations in the consolidated financial statements.

In January, 1999, the Company's Board of Directors elected to change the
Company's year-end to December 31.

2.  Summary of Significant Accounting Policies

    Principles of Consolidation

The consolidated financial statements include the accounts of USA Biomass
Corporation and subsidiaries.  USA Waste Transport, Inc., USA
Biomass-Greenwaste, Inc., AMCOR Financial Corporation, TransPacific
Environmental, Inc. and AMCOR Biomass Farms, LLC (99% owned) are the
Company's continuing operating subsidiaries. Sun Goddess Farms, Inc., AMCOR
Properties, Inc., Las Palomas Country Club Estates, LLC (99% owned) and
AMCOR Builders, LLC (99% owned) are discontinued operations. All significant
intercompany transactions have been eliminated.  Certain reclassifications
have been made to the Consolidated Balance Sheet at December 31, 1998 and the
Statement of Operations for the nine months ended September 30, 1998 to
conform to the 1999 presentation.

On December 23, 1998, the Company adopted a plan to discontinue its
agribusiness and real estate operations and to sell the related assets.
Assets of discontinued operations are recorded at the lower of cost or market
(net realizable value).

    Revenue Recognition

Biomass and waste transportation revenues are recognized on the accrual method
at the time the related services are performed.

    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 amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

    Cash and Equivalents

Cash and equivalents include short-term, highly liquid instruments with original
maturities of three months or less.

                                      F-14
<PAGE>




2.  Summary of Significant Accounting Policies, Continued

    Property and Equipment

Property and equipment are recorded at cost and are depreciated using the
straight-line method over the expected useful lives noted below.

                                                           Estimated Useful
                                                                  Life
                                                           ----------------
     Vehicles and equipment                                    3-10 years
     Office furniture and equipment                            3-10 years
     Buildings                                                   30 years

Leasehold improvements are amortized over the shorter of the life of the assets
or the life of the related lease.

    Intangible Assets

Intangible assets include licenses and agreements, customer lists, and con-
tracts. Intangible assets are amortized using the straight line method over a
period of 5 years. Regularly, the Company assesses the intangible assets for
impairment based on recoverability of the balances from expected future opera-
ting cash flows on an undiscounted basis.

    Long Lived Assets

Long-lived assets held and used by the Company are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable. The estimated undiscounted cash flows
associated with the assets are compared to the carrying amounts to determine if
a writedown to fair value is required.

    Stock Based Compensation

The Company accounts for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees". Compensation cost for stock options,
if any, is measured as the excess of the quoted market price of the Company's
stock at the date of grant over the amount an employee must pay to acquire the
stock.  Compensation cost is recorded over the requisite vesting periods based
on the market value on the date of grant.

Statements of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation," established accounting and disclosure requirements
using a fair-value-based method of accounting for stock-based employee and non-
employee compensation plans. The Company has elected to remain on its current
method of accounting as described above for employee compensation plans, and has
adopted the disclosure requirements of SFAS No. 123.

    Earnings per Common Share

In 1997 the Financial Accounting Standards Board issued SFAS No. 128 - "Earnings
Per Share". This pronouncement replaced the previously reported primary and
fully diluted earnings per share with basic and diluted earnings per share,
respectively. Earnings per share for the three and nine months ended September
30, 1999 and 1998 been calculated in accordance with this pronouncement.

                                      F-15
<PAGE>



2.  Summary of Significant Accounting Policies, Continued

    Earnings per Common Share, Continued

Basic earnings per share is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding for
the year. Diluted earnings per share reflects the potential dilution that could
occur if dilutive securities and other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the Company's earnings.

    Significant Accounting Policies Specific to Discontinued Operations

    Revenue Recognition

Revenues from the Company's discontinued agribusiness and real estate operations
are generated through management service and development fees charged to various
partnerships engaged in agribusiness and real estate. Management service fee
income, primarily due from affiliates, is recognized when contractually due,
which approximates the time that services are performed. Crop sales, other farm
income and real estate sales are recognized by the accrual method at the time
of sale.

    Inventories - Real Estate

All direct and indirect costs of real estate development are accumulated and
valued at the lower of cost or net realizable value.

    Investment

The Company uses the equity method of accounting for its 50% investment interest
in PS III Farms, LLC, an Oregon limited liability company.

3.  Discontinued Operations

On December 23, 1998, the Company adopted a formal plan to discontinue its agri-
business and real estate operations and to sell the related asset in order to
focus on its biomass and waste transportation segments. The Company plans to
dispose of its agribusiness and real estate operations by November 30, 1999.
As a result, the financial statements of the Company reflect the net assets and
operating results of the agribusiness and real estate segments as discontinued
operations.

Selected information for the discontinued agribusiness and real estate
operations is presented below.

<TABLE>

<CAPTION>
                                             As of September 30, 1999
                                        ----------------------------------
                                     Agribusiness    Real Estate        Total
                                     ------------    -----------    -----------
<S>                               <C>             <C>            <C>
  Revenues                               $11,500        $137,625       $149,125
  Interest expense                      (130,435)       (216,723)      (347,158)
                                      ----------      ----------     ----------
  Loss from discontinued operations    $(118,935)       $(79,098)     $(198,033)
                                      ==========      ==========     ==========
</TABLE>


                                       F-16
<PAGE>




3.  Discontinued Operations, Continued


<TABLE>

<CAPTION>
                                             As of September 30, 1998
                                        ----------------------------------
                                     Agribusiness    Real Estate        Total
                                     ------------    -----------    -----------
<S>                               <C>             <C>            <C>
  Revenues                            $6,057,166     $12,292,686    $18,349,852
  Operating and administrative
   costs                              (7,689,412)    (12,194,688)   (19,884,100)
  Writedown of receivables from
   managed limited partnerships              -        (5,306,244)    (5,306,244)
  Other                                 (357,308)        117,731       (239,577)
                                      ----------      ----------     ----------
  Loss from discontinued operations   (1,989,554)     (5,090,515)    (7,080,069)
  Estimated loss on disposal of
   discontinued operations            (1,323,883)     (1,554,930)    (2,878,813)
                                      ----------      ----------     ----------
  Total loss from discontinued
   operations                        $(3,313,437)    $(6,645,445)   $(9,958,882)
                                      ==========      ==========     ==========
</TABLE>


The assets of discontinued agribusiness and real estate segments are summarized
as follows:


<TABLE>

<CAPTION>
                                             As of September 30, 1999
                                        ----------------------------------
                                     Agribusiness    Real Estate        Total
                                     ------------    -----------    -----------
<S>                               <C>             <C>            <C>
 Current assets:
  Accounts receivable                      -           $365,044      $365,044
  Due from managed limited
   partnerships                            -           8,364,641     8,364,641
  Inventory                                -           1,295,640     1,295,640
  Other current assets                     -              66,886        66,886
                                     ------------    -----------    ----------
    Total current assets                   -          10,092,211    10,092,211
                                     ------------    -----------    ----------
 Current liabilities:
  Lines of credit                          -           1,152,198     1,152,198
  Accrued interest payable               $76,841         196,842       273,683
  Notes and capitalized lease
   obligations payable                   279,277           3,845       283,122
  Other current liabilities              124,171             -         124,171
                                    ------------    -----------    -----------
    Total current liabilities            480,289       1,352,885     1,833,174
                                     -----------     -----------    ----------
 Net current assets (liabilities)
  of discontinued operations           $(480,289)     $8,739,326    $8,259,037
                                     ===========     ===========    ==========
</TABLE>



                                      F-17
<PAGE>




3.  Discontinued Operations, Continued




<TABLE>

<CAPTION>
                                             As of September 30, 1999
                                        ----------------------------------
                                     Agribusiness    Real Estate        Total
                                     ------------    -----------    -----------
<S>                               <C>             <C>            <C>
 Noncurrent assets:
  Property and equipment, net         $4,150,486           -        $4,150,486
  Investment                               -          $2,489,199     2,489,199
  Other assets                           150,751           -           150,751
                                     -----------     -----------    ----------
    Total noncurrent assets            4,301,237       2,489,199     6,790,436
                                     -----------     -----------    ----------
 Noncurrent liabilities:
  Notes payable, others,
   net of current portion              1,698,170       4,038,170     5,736,340
  Capitalized lease obligations,
   net of current portion                  -              26,975        26,975
                                    ------------     -----------   -----------
     Total noncurrent liabilities      1,698,170       4,065,145     5,763,315
                                    ------------     -----------   -----------
 Net noncurrent assets (liabilities)
  of discontinued operations          $2,603,067     $(1,575,946)   $1,027,121
                                     ===========     ===========   ===========
</TABLE>









                                       F-18
<PAGE>





3.  Discontinued Operations, Continued




<TABLE>

<CAPTION>
                                               As of December 31, 1998
                                        ----------------------------------
                                     Agribusiness    Real Estate        Total
                                     ------------    -----------    -----------
<S>                               <C>             <C>            <C>
 Current assets:
  Accounts receivable                      -            $336,985      $336,985
  Due from managed limited
   partnerships                         $137,444       8,839,455     8,976,899
  Inventory                                -           2,085,137     2,085,137
  Other current assets                    16,331         143,246       159,577
                                     ------------    -----------    -----------
    Total current assets                 153,775      11,404,823    11,558,598
                                     ------------    -----------    -----------
 Current liabilities:
  Accounts payable                       254,001         230,668       484,669
  Lines of credit                          -           1,322,000     1,322,000
  Due to managed limited
   partnerships                          874,984         540,052     1,415,036
  Notes and capitalized lease
   obligations payable                   392,406           -           392,406
  Other current liabilities                -               1,823         1,823
                                     ------------    -----------    -----------
    Total current liabilities          1,521,391       2,094,543     3,615,934
                                     ------------    -----------    -----------
 Net current assets (liabilities)
  of discontinued operations         $(1,799,616)     $9,310,280    $7,942,664
                                     ============    ===========    ===========
 Noncurrent assets:
  Property and equipment, net         $4,150,486           -        $4,150,486
  Investment                               -          $2,489,199     2,489,199
  Other noncurrent assets                162,999           -           162,999
                                     ------------    -----------    -----------
    Total noncurrent assets            4,313,485       2,489,199     6,802,684
                                     ------------    -----------    -----------
 Noncurrent liabilities:
  Notes payable, others,
   net of current portion              4,790,151       1,221,018     6,011,169
  Capital lease obligations,
   net of current portion                 22,036           -            22,036
                                     ------------    -----------    -----------
    Total noncurrent liabilities       4,812,187       1,221,018     6,033,205
                                     ------------    -----------    -----------
 Net noncurrent assets (liabilities)
  of discontinued operations           $(498,702)     $1,268,181      $769,479
                                     ============    ===========    ===========





</TABLE>
                                      F-19
<PAGE>







4.  Note Receivable

Note receivable arising from the sale of undeveloped real estate in Riverside
County, California consists of the following:


<TABLE>
                                                   September 30,   December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>           <C>
Noninterest-bearing note receivable collateralized
by a deed of trust on real property; face amount
of $10,000,000 due in August 2000, discounted to
yield a representative market effective interest
rate of 17.4%.  The note provides that the
maturity date may be extended until August, 2001.
In December 1998, the Company obtained a
$4,000,000 loan, collateralized by this note
receivable.  The loan terms provide, among other
things, that the Company may not sell, encumber,
or dispose of the note without the written consent
of the lender.  In March, 1999, the Company
obtained an additional loan of $1,025,000 from
the same lender under substantially the same
terms.  In September, 1999, the Company sold the
note on a non-recourse basis for $7,500,000.  The
sale provides that an additional $500,000 will be
paid to the Company if the note is paid on the
original due date, with a deminishing amount
payable after the original due date.                       $-      $7,649,880
                                                     ==========    ==========



</TABLE>



















                                      F-20
<PAGE>




5.  Notes Payable

    Notes payable consist of the following:

      Continuing Operations

 Notes payable to related parties:

  Uncollateralized
<TABLE>
<CAPTION>
                                                   September 30,  December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>           <C>
 Notes payable with interest ranging from 6.0% to
 17.0% per annum, principal amounts of $1,294,416,
 $15,713 and $810,153 plus accrued interest due
 July 31, 1999, December 31, 1999, and 2001,
 respectively. Notes with aggregate principal
 amounts of $1,294,416 are payable to share-
 holders of the Company who are investors in
 limited partnerships managed by the Company.
 As of September 30, 1999, these notes are in
 default. The $15,713 and the $810,153 notes
 payable are due to affiliated real estate
 limited partnerships managed by the Company.        $2,120,282    $2,495,285

 Note payable to estate of former shareholder
 who was an officer of the Company, with interest
 at 10% per annum and is currently due and
 payable.                                               283,389       283,389

                                                    -----------   -----------
     Total due to related parties                     2,403,671     2,778,674
       Less:  current portion                        (1,577,805)   (1,952,808)
                                                    -----------   -----------
     Total noncurrent due to related parties           $825,866      $825,866
                                                    ===========   ===========
 Note payable to an employee:

 Note payable to an employee, with interest at
 8.0% per annum, principal and interest due in
 December 2000.                                        $370,189      $370,189
                                                    -----------   -----------
     Total due to an employee                           370,189       370,189
       Less:  current portion                               -        (370,189)
                                                    -----------   -----------
     Total noncurrent due to an employee                370,189         -
                                                    ===========   ===========





</TABLE>
                                      F-21
<PAGE>


5.  Notes Payable, Continued

 Notes payable to third parties:
  Uncollateralized
<TABLE>

<CAPTION>
                                                   September 30,  December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>            <C>
 Note payable with interest at 8.0% per annum,
 with monthly payments of $11,182, due in
 March 1999.                                                -         $45,474


  Collateralized

 Notes payable to individuals, collateralized by
 the Company's interest in PS III Farms LLC with
 a carrying amount of approximately $2,490,000,
 interest at 5% per annum, due in December, 1997.
 The notes are in default.                             $296,164       206,164

 Notes payable collateralized by equipment, with
 interest ranging from 8.0% to 18.7% per annum,
 monthly principal and interest payments ranging
 from $381 to $8,272, which aggregate $51,355.
 Maturity dates range from December 1998 to
 March 2003.                                          1,242,990     1,142,619

 Note payable collaterialized by note receivable
 (Note 4) bearing interest at 12.25% per annum,
 principal and accrued interest due August 21,
 2000.                                                      -       4,000,000

 Note payable to bank, collateralized by real
 property with a net carrying amount of
 $1,001,053 with interest at 8.75% per annum,
 monthly principal and interest payment of
 $8,098, due in December, 2003 with a balloon
 payment of $634,901.                                   781,413       800,000

 Notes payable collateralized by transportation
 equipment with a net carrying amount of
 $860,081, with interest of 8.75% per annum,
 monthly principal and interest payments of
 $19,872, due in October and November, 2003.            551,565       943,293

 Note payable to bank, collateralized by assets
 of the company with interest at prime plus 2%,
 due in June, 2002 with monthly principal
 payment of $4,167 plus interest.                       237,109           -

 Note payable collateralized by a vehicle, with
 interest of 9.5% per annum, monthly principal
 and interest payments of $784.                          30,818           -
                                                    -----------   -----------
    Total due to third parties                        3,140,059     7,137,550
      Less: current portion                            (906,550)     (720,550)
                                                    -----------   -----------
    Total noncurrent due to third parties            $2,233,509    $6,417,000
                                                    ===========   ===========
</TABLE>

                                      F-22
<PAGE>


5.  Notes Payable, Continued

 Discontinued Operations

  Agribusiness:
<TABLE>
<CAPTION>
                                                   September 30,   December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>           <C>
 Notes payable collateralized by equipment, with
 interest ranging from 10.4%  to 10.5% per annum,
 principal of $22,735 plus accrued interest
 payable annually with the final payment due in
 August 1999.                                           $47,479       $47,479

 Note payable to an insurance company,
 collateralized by real and personal property,
 with interest at 7.75% per annum. Semi-annual
 payments of principal and interest of $188,005,
 due on October 1 and April 1 of each year, with
 final payment due in April 2011. The interest
 rate will be reviewed in April 2006 and adjusted
 per the terms of the loan.                           1,929,967     2,039,324
                                                    -----------   -----------
    Total agribusiness notes payable due to
     third parties                                    1,977,446     2,086,803
      Less: current portion                            (279,276)     (268,855)
                                                    -----------   -----------
    Total noncurrent due to third parties            $1,698,170    $1,817,948
                                                    ===========   ===========

  Real estate operations:

 Note payable collateralized by real property, with
 interest at 9.25% per annum, principal and interest
 of $806 payable monthly. The final payment is
 due in March 2000.                                         -         $84,731


 Note payable to a bank, collateralized by real
 property, guaranteed by two shareholders who
 are officers of the Company, with interest at
 prime (8.25% at August 31, 1998) plus 1.75%,
 interest payable monthly. Installments of $12,000
 due upon the sale of each residential lot from the
 Texas development project.  All unpaid principal
 and interest due in January 2000.                     $956,620     1,138,110

 Note payable to a bank, collateralized by real
 property in Texas, with interest at 8.75% per
 annum. Monthly payments of interest only until
 May 31, 1998; thereafter, monthly payments of
 principal and interest of $31,727, with final
 payment due June 1, 2003.                            3,085,395     3,087,333
                                                    -----------   -----------
    Total real estate notes payable due to
     third parties                                    4,042,015     4,310,174
      Less: current portion                              (3,845)     (127,755)
                                                    -----------   -----------
    Total noncurrent due to third parties            $4,038,170    $4,182,419
                                                    ===========   ===========

</TABLE>
                                      F-23
<PAGE>




5.  Notes Payable, Continued


<TABLE>
<CAPTION>
                                                   September 30,  December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>            <C>
    Total discontinued operations notes payable      $6,019,461    $6,396,977
      Less: current portion                            (283,121)     (396,610)
                                                    -----------   -----------
    Total noncurrent portion                         $5,736,340    $6,000,367
                                                    ===========   ===========

</TABLE>

Maturities of Notes Payable for the quarter ending September 30, 1999:

   Continuing operations

               2000                                  $2,484,355
               2001                                   1,231,089
               2002                                     735,341
               2003                                     807,075
               2004 and thereafter                      820,095

   Discontinued operations

     While the Company's plan to discontinue the agribusiness and
   real estate operations contemplates the retirement of these
   obligations during 1999, the contractually required payments at
   September 30, 1999, are as follows:

               2000                                    $283,122
               2001                                   1,572,660
               2002                                     380,989
               2003                                     412,798
               2004 and thereafter                    3,369,892

6.  Capital Leases

The Company leases vehicles and equipment under long-term noncancellable capital
leases.  Obligations under capital leases consist of the following:

 Continuing Operations

<TABLE>
<CAPTION>
                                                   September 30,  December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                              <C>           <C>
 Capital leases with effective interest rates of
 9.50% and 9.75% per annum, with aggregate monthly
 principal and interest payments of $3,545 through
 December 1998.                                             -          $3,482

 Capital lease with an effective interest rate of
 8.50% per annum, with monthly principal and
 interest payments of $1,525 through September
 2002.                                                  $53,442        49,960



                                          F-24
<PAGE>





6.  Capital Leases, Continued


 Continuing Operations

                                                   September 30,  December 31,
                                                         1999          1998
                                                    -----------   -----------
 Capital leases with interest ranging from 7.8% to
 17% per annum, with monthly principal and interest
 payments ranging from $1,000 to $6,691, which
 aggregate $25,358. Maturity dates range from
 August 2001 to March 2003.                             612,653     1,133,648

 Capital leases with effective interest rates of
 7.07% to 7.50% with monthly principal and interest
 payments of $59,024 through November, 2003           2,928,219     3,116,122
                                                    -----------   -----------
    Total obligations under capital leases -
     continuing operations                           $3,594,317    $4,303,212
                                                    ===========   ===========

Future minimum lease payments under capital leases at September 30, 1999 are as
follows:

          2000                                         $936,179
          2001                                        1,045,776
          2002                                          671,746
          2003                                          671,746
          2004                                          738,991
                                                      ---------
          Total minimum lease payments                4,064,438
          Less:  amount representing interest
            at the incremental borrowing rate          (470,121)
                                                      ---------
          Present value of minimum lease payments     3,594,317
          Less:  current maturities                    (716,313)
                                                      ---------
          Obligations under capital leases -
            long-term                                $2,878,004
                                                      =========
</TABLE>










                                      F-25
<PAGE>





7.  Deferred Income Taxes



The components of the provision for income taxes are as follows:

                                                    (Amounts in Thousands)

<TABLE>
<CAPTION>
                                                   September 30,    December 31,
                                                         1999          1998
                                                    -----------   -----------
<S>                                             <C>             <C>
 Current tax expense (benefit):
   Federal                                                  -              -
   State                                                    -             $3
                                                    -----------   -----------
                                                            -              3
                                                    -----------   -----------
 Deferred tax expense (benefit):
   Federal                                                  -              -
   State                                                    -              -
                                                    -----------   -----------
                                                            -              -
                                                    -----------   -----------
 Total provision (benefit)                                  -             $3
                                                    ===========   ===========





Reconciliation of the effective tax rate to the U.S. federal statutory income
tax rate is as follows:


                                                    September 30,    December 31,
                                                         1999          1998
                                                    -----------   -----------
 U.S. federal statutory income tax rate                   (34.0)%       (34.0)%
 State tax provision                                        0.3           0.3
 Change in valuation allowance                             33.7          34.0
                                                    -----------   -----------
   Effective income tax rate                                0.0           0.3%
                                                    ===========   ===========


</TABLE>








                                      F-26
<PAGE>



7.  Deferred Income Taxes, Continued


The Company has a state tax credit carryforward of $250,462 that expires in
2010. The Company also has federal and state net operating loss carryforwards
of $4,795,963 and $3,861,346 respectively. The federal and state net operating
losses begin to expire in 2018 and 2003, respectively.


8.  Stock Based Compensation Plans


A summary of the activity relating to the Company's stock option plans as of
September 30, 1999 and December 31, 1998, and changes during the years then
ended is presented below:


<TABLE>
<CAPTION>
                                      September 30, 1999     December 31, 1998
                                     --------------------   -------------------
                                                 Weighted              Weighted
                                                  Average               Average
                                                 Exercise              Exercise
                                       Shares      Price      Shares     Price
                                      -------    ---------   -------   --------
<S>                              <C>           <C>       <C>         <C>
 Outstanding at beginning of year   1,012,883       $2.43  1,012,883     $2.43
 Exercised                              -            -         -          -
 Granted                               15,000        2.09      -          -
 Returned/repriced                   (150,000)       4.04      -          -
 Forfeited                              -            -         -          -
                                    ---------    ---------   -------   --------
 Outstanding at end of year           877,883        2.15  1,012,883      2.43
                                    =========    =========   =======   ========


</TABLE>

The following table summarizes information about stock options outstanding at
September 30, 1999:

<TABLE>
<CAPTION>
                                         Weighted Average
    Range of       Outstanding at      Remaining contractual   Exercisable at
 Exercise Prices September 30, 1999        Life (in Years)   September 30, 1999
 ---------------  ---------------      ---------------------   ---------------
<C>             <C>                <C>                      <C>
     $1.30             87,500                     6                  87,500
      1.60            454,133                     2                 454,133
      2.00             71,250                     9                  24,602
      3.00            255,000                    10                  85,000
      4.00             10,000                     9                   7,500
                  -----------                                     ---------
  1.30 to 4.10        877,833                                       658,735
                  ===========                                     =========




</TABLE>


                                      F-27
<PAGE>


8.  Stock Based Compensation Plans, Continued

The Company continues to account for stock-based compensation using the intrin-
sic value method prescribed by the Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees". Therefore, under the principles of
APB Opinion No. 25, the Company does not recognize compensation expense asso-
ciated with the granting of stock options. SFAS No. 123, "Accounting for
Stock-Based Compensation", requires the use of option valuation models to prov-
ide supplemental information regarding options granted after 1994.  Pro forma
information regarding net income and earnings per share shown below was deter-
mined as if the Company had accounted for its employee stock options under the
fair value method of that statement.

The fair value of each option granted was estimated at the date of grant using
the Black-Scholes option pricing model (the "BSOPM") with the following weight-
ed average assumptions used for grants in 1999 and 1998, respectively: dividend
yield of 0% for both years, expected volatility of 0.946 for both years,
risk-free interest rate at 4.99% to 5.05%, and expected contractual life of 10
years for both years. The weighted average fair value of options granted during
1999 and 1998 was $1.47 and $2.50, respectively.

The BSOPM was developed for use in estimating the fair value of traded options.
The Company's employee stock options have characteristics significantly differ-
ent from those of traded options such as vesting restrictions and extremely
limited transferability.  In addition, the assumptions used in option valua-
tion models are highly subjective, particularly the expected stock price vol-
atility of the underlying stock.  Because changes in these subjective input
assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not provide a reliable single measure of the
fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized over the options' vesting periods.  The pro forma effect on net
income for 1999 and 1998 is not representative of the pro forma effect on net
income in future years because it does not take into consideration pro forma
compensation expense related to grants made prior to 1994.  Pro forma informa-
tion in future years will reflect the amortization of a larger number of stock
options granted in several succeeding years.  The Company's pro forma informa-
tion is as follows:


                                                 9 Months Ended September 30,
                                                         1999          1998
                                                    -----------   -----------
 Net income (loss), as reported                       $(561,000) $(15,560,000)
 Net income (loss), pro forma                         $(607,750) $(15,656,750)
 Basic earnings (loss) per share, as reported            $(0.16)       $(2.10)
 Basic earnings (loss) per share, pro forma              $(0.17)       $(2.10)


                                                  3 Months Ended September 30,
                                                         1999          1998
                                                    -----------   -----------
 Net income (loss), as reported                         $20,000  $(12,589,000)
 Net income (loss), pro forma                          $(53,751) $(12,630,618)
 Basic earnings (loss) per share, as reported            $(0.03)       $(1.66)
 Basic earnings (loss) per share, pro forma              $(0.04)       $(1.66)



                                      F-28
<PAGE>






8.  Stock Based Compensation Plans, Continued



A summary of the activity relating to common stock warrants as of September
30, 1999 and December 31, 1998 and changes during the periods then ended is
presented below:


<TABLE>
                                     September 30, 1999     December 31, 1998
                                     and 9 Months Ended     and 4 Months Ended
                                     September 30, 1999     December 31, 1998
                                    ---------------------  --------------------
                                                 Weighted              Weighted
                                                  Average               Average
                                                 Exercise              Exercise
                                     Warrants      Price    Warrants     Price
                                     --------    ---------  --------   --------
<S>                               <C>          <C>        <C>        <C>
 Outstanding at beginning of year     427,500      $2.88     427,500     $2.88
 Granted                                -           -          -          -
                                     --------    ---------  --------   --------
 Outstanding at end of year           427,500       2.88     427,500      2.88
                                     ========    =========  ========   ========


</TABLE>
The range of exercise prices of warrants outstanding at September 30, 1999 was
$2.00 to $6.67.

The following table summarizes information about warrants outstanding at
September 30, 1999:


                                                                      Estimated
                              Volatility    Dividend     Risk Free      Lives
Warrant Grants                  Factor       Yield    Interest Rates  (In Years)
-----------------------       ----------    --------  --------------  ----------
September 30, 1999                 1.032         0%        5.20%           5
December 31, 1998                  1.032         0%        5.20%           5












                                      F-29
<PAGE>

9. Income (loss) Per Common Share

   Basic earnings per share are computed by dividing earnings available to
   common stockholders by the weighted average number of common shares out-
   standing during the period.  Diluted earnings per share reflect per share
   amounts that would have resulted if dilutive potential common stock had
   been converted to common stock.  The following reconciles amounts reported
   in the financial statements:

                                For the Nine Months Ended September 30, 1999
                                 ------------------------------------------
                                 Income            Shares        Per-Share
                               (Numerator)      (Denominator)     Amount
                               -----------      -------------    ---------
     Loss from continuing
       operations               ($363,000)
     Less preferred stock
       dividends                 (686,549)
                                ---------
     (Loss) to common
       shareholders            (1,049,549)       7,761,385         $(0.14)
     (Loss) from discontinued
       operations                (198,000)       7,761,385          (0.02)
     (Loss) available to
       common stockholders
       - basic earnings per    ----------                        ---------
         share                 (1,247,549)       7,761,385         $(0.16)
                                                                 =========
     Effect of dilutive
       securities:

       Options                        -                -
                                ---------       ----------
     (Loss) available to
       common stockholders
       - diluted earnings
         per share            $(1,247,549)       7,761,385         $(0.16)
                                =========       ==========       =========


                                For the Nine Months Ended September 30, 1998
                                 ------------------------------------------
                                 Income            Shares        Per-Share
                               (Numerator)      (Denominator)     Amount
                               -----------      -------------    ---------
    (Loss) from continuing
       operations             $(5,601,000)
     Less preferred stock
       dividends                 (686,549)
                                ---------
    (Loss) to common
       shareholders            (6,287,549)        7,735,731        $(0.81)
    (Loss) from discontinued
       operations              (9,959,000)        7,735,731         (1.29)
                                ---------                           -----
     (Loss) available to
       common stockholders
       - basic earnings per
         share                (16,246,549)        7,735,731        $(2.10)
                                                                  =========
     Effect of dilutive
       securities:

       Options                        -              -
                                ---------       ----------
     (Loss) available to
       common stockholders
       - diluted earnings
         per share           $(16,246,549)       7,735,731         $(2.10)
                                =========       ==========       =========


                                      F-30
<PAGE>
9. Income (loss) Per Common Share, Continued

                               For the Three Months Ended September 30, 1999
                                 ------------------------------------------
                                 Income            Shares        Per-Share
                               (Numerator)      (Denominator)     Amount
                               -----------      -------------    ---------
     Income from continuing
       operations                $218,000
     Less preferred stock
       dividends                 (228,850)
                                ---------
     (Loss) to common
       shareholders               (10,250)        7,761,385        $0.00
     (Loss) from discontinued
       operations                (198,000)        7,761,385        (0.03)
                                ---------                          -----
     (Loss) available to
       common stockholders
       - basic earnings per
         share                   (208,850)        7,761,385       $(0.03)
                                                                 =========
     Effect of dilutive
       securities:

       Options                        -                -
                                ---------        ----------
     (Loss) available to
       common stockholders
       - diluted earnings
         per share              $(208,850)        7,761,385        $(0.03)
                                =========        ==========      =========


                               For the Three Months Ended September 30, 1998
                                 ------------------------------------------
                                 Income            Shares        Per-Share
                               (Numerator)      (Denominator)     Amount
                               -----------      -------------    ---------
     Loss from continuing
       operations             $(4,620,000)
     Less preferred stock
       dividends                 (228,850)
                                ---------
     (Loss) to common
       shareholders            (4,848,850)        7,733,299       $(0.63)
     (Loss) from discontinued
       operations              (7,969,000)        7,733,299        (1.03)
                                ---------                           ----
     (Loss) available to
       common stockholders
       - basic earnings per
         share                (12,817,850)       7,761,385        $(1.66)
                                                                 =========
     Effect of dilutive
       securities:

       Options                        -              -
                                ---------       ----------
     (Loss) available to
       common stockholders
       - diluted earnings
         per share           $(12,817,850)       7,761,385        $(1.66)
                                =========       ==========       =========

   During 1999, the Company had 747,500 shares of Series A convertible
   preferred stock (entitled to a 9% per share cumulative dividend) and
   404,414 shares of Series B convertible preferred stock outstanding.  Each
   share of preferred stock is convertible into one share of common stock.
   The convertible preferred stock was not included in the computation of
   diluted earnings per share because the effect of conversion would be
   antidilutive.  The Series A and Series B convertible preferred stock were
   still outstanding at September 30, 1999.

                                      F-31
<PAGE>


Item 2.	Management's Discussion and Analysis of Financial
Condition and Results of Operations.

                            Overview

Following the Company's acquisition of TransPacific Environmental,
Inc. ("TPE") in November 1997, the Company's focus shifted from
agribusiness and land planning to biomass.  Subsequently, in
September 1998, the Company broadened its new focus to include
solid waste transportation and developed a strategic alliance with
Waste Management of California, Inc. ("Waste Management").  In
light of the Company's strategic alliance with Waste Management
and related actual and potential biomass and solid waste
transportation opportunities, the Company's Board of Directors
determined that the Company's shift in focus from agribusiness and
land planning/development to solid waste transportation and
biomass should be complete and permanent.  Consequently the Board
of Directors approved the Company's name change effective August
31, 1998, and subsequently, on December 22, 1998, adopted the Plan
of Discontinued Operations (the "Plan"), pursuant to which the
Company intends to discontinue its agribusiness and land
planning/development activities by November 30, 1999, and focus on
its solid waste transportation and biomass activities.

Implementation of the Plan is in process and has had a material
impact on the presentation of the Company's financial statements.
The operations, cash flows and net assets of these operations for
both fiscal 1999 and fiscal 1998 have been reclassified as
discontinued operations, and the assets of these operations were
reduced to the lower of cost or net realizable value.  The
Company's agribusiness and land planning/development operations
have been accounted for as discontinued operations and the results
thereof have been excluded from continuing operations in the
Company's consolidated financial statements.  The Company had no
biomass activities prior to fiscal 1997.

                     Results of Operations

The Company's continuing operations consists of solid waste
transportation and biomass activities, which include green waste
processing.  The Company sold its unprofitable municipal tree
maintenance operations in March 1999.  The Company's discontinued
operations consist of agribusiness and land planning/development.
A discussion of the material factors that affected the Company's
results of continuing operations and, where applicable, the
results of its discontinued operations, are presented separately
below.

               Results of Continuing Operations

Revenues:

The Company's revenues from continuing operations for the nine-
months ended September 30, 1999, reflect principally its biomass
activities and waste transport revenue, while revenues for the
nine-months ended September 30, 1998, reflect only biomass
activities as the waste transport contract did not commence until
October 1998.
<PAGE>



Revenues for the three-months ended September 30, 1999, were
$1,965,000 up 147% from $794,000 for the comparable three-month
period ended September 30, 1998, resulting in net income from
continuing operations of $218,000 compared to a loss of $4,620,000
for the comparable prior three-month period. Overall, revenues for
the nine-months ended September 30, 1999, of $5,869,000 were up
substantially (207%) from $1,911,000 for the nine-months ended
September 30, 1998. This resulted in a net loss from continuing
operations of $363,000 for the nine-months ended September 30,
1999, as compared to a net loss of $5,601,000 the comparable prior
nine-month period.

The Company expects revenues to continue to increase during the
remainder of 1999, and margins to improve as the transportation
division grows both internally, as new contracts are phased in,
and as the Company expands its biomass processing operations. Due
to the Company's considerable investment in plant, equipment and
management personnel, significant additional volume can be
accommodated with minimal incremental fixed cost.  Overall, fiscal
1999 revenues will be considerably higher than fiscal 1998.

Cost of Revenues:

Cost of revenues for the three-months ended September 30, 1999,
were $1,437,000, compared to $1,331,000 for the comparable three-
months ended September 30,1998. This resulted in a gross profit
from operations for the three-months ended September 30, 1999, of
$528,000, compared to a $537,000 loss the comparable prior three-
month period ended September 30, 1998. Cost of revenues of
$4,539,000 for the nine-month ended September 30, 1999, were up
$2,129,000(88%) from the comparable nine-months period ending
September 30, 1998, mainly due to the implementation of the waste
transport agreement, which was not in effect in the prior periods,
and from internal growth in biomass activities. This resulted in a
gross profit from operations of $1,330,000 for the nine-months
ended September 30, 1999, compared to a loss of $499,000 for the
nine-months ended September 30, 1998.

General and Administrative Expenses:

For the three-month period ending September 30, 1999, total
general and administrative expenses were $652,000 down 65% from
$1,877,000 for the comparable three-month period ending September
30, 1998. For the nine-months ended September 30, 1999, total
general and administrative expenses of $1,512,000 were down
$1,432,000 (48%) from the comparable nine-month period ending
September 30, 1998. The decrease is primarily due to additional
cost reduction related to the Company's plan of discontinued
operations.

Change in Estimated Remediation Costs:

During the quarter ended June 30, 1999, independent experts
determined that the Company's contingent liability for remediation
costs, related to real estate sold in 1998, was excessive and
accordingly a $400,000 adjustment was recorded.
<PAGE>





Interest Expense, Net of Interest Income:

For the three-months ended September 30, 1999, interest expense,
net of interest income, was $193,000 as compared to $355,000 for
the comparable three-months ending September 30, 1998, the
decrease attributed to the sale of the Company's non-interest
bearing $10 million note and the retirement of over $5 million of
debt during the third quarter. For the nine-months ended September
30, 1999, interest expense, net of interest income of $1,104,000
increased $569,000 (106%) from the comparable nine-month period
ending September 30, 1998, due to the additional accrual of
interest related to a $5,025,000 note payable, and the Company's
election not to accrue $300,000 of imputed interest income for the
second and third quarters, 1999, on its $10 million promissory
note, due to the sale of that note in the third quarter.

Gain or Loss on Sales of Assets:

For three-months ended September 30, 1999, the company realized a
net gain from the sale of assets of $535,000, primarily as a
result of the sale of its $10 million note receivable, compared to
a loss of $88,000 for the three-months ended September 30, 1998.
For the nine-months ended September 30, 1999, the net gain is
$523,000 compared to a $366,000 net loss for the comparable prior
period, the prior period loss related to the liquidation of non-
core assets pursuant to the Company's plan of discontinued
operations.

Income <Loss> from Continuing Operations:

For the three-months ended September 30, 1999, income from
continuing operations was $218,000 as compared to a loss of
$4,620,000 for the comparable three-months ending September 30,
1998, and for the nine-months ended September 30, 1999, the loss
from continuing operations of $363,000 as compared to a loss of
$5,601,000 for the comparable nine-month period ending September
30, 1998. The disparity between the respective 1999-1998 periods
is almost exclusively related to charges incurred in 1998 related
to the Company's plan of discontinued operations.

          Results of Discontinued Operations:

For the three and nine-months ended September 30, 1999 results
from discontinued operations reflected a loss of $198,000,
primarily from ongoing carrying costs that exceeded the original
estimate, as compared to a loss of $7,969,000 and $9,959,000 for
the comparable three and nine-month periods ending September 30,
1998, mainly due to the accrual in 1998, of operating losses for
discontinued operations and losses related to the disposal of
operations related thereto
<PAGE>



            Liquidity and Capital Resources:

The Company's overall financial condition as of September 30,
1999, as compared to December 31, 1998, has improved considerably,
principally due to the sale of an $10 million, non-interest
bearing note receivable (carried on the financial statements at $8
million), which retired over $5 million of long-term debt and
improved working capital. Moreover, management believes that with
the continued growth of waste transportation and biomass, financed
by the continued liquidation of assets from discontinued
operations, the Company's condition is likely to improve further
during 1999.  Total assets have decreased 30% to $19.5 million,
due principally to the sale of TPE's tree maintenance operations
in March for $885,000 and the sale of the $10 million note which
had the effect of reducing total liabilities 39% to $12.2 million.
The net effect, overall, resulted in shareholders' equity
decreasing 7.1% to $7.3 million.

The Company's current ratio improved to 1.73 at September 30,
1999, from 1.38 at December 31, 1998, primarily due to the
reduction of current debt due to the $10 million note sale.
Despite the loss for the nine-months ending September 30, 1999,
liquidity is improved from December 31, 1998, and is expected to
continue to improve as a result of the following:  (i) management
of cash flow; (ii) the Company has had adequate lines of credit in
the past from various financing sources to fund its capital
equipment requirements, and expects its credit lines to be
sufficient to meet the requirement of existing and future
contracts. Additional equipment financing has been arranged for
pending new transport contracts expected to commence in December
1999; (iii) in September the Company entered into an agreement to
sell it's remaining 560-acre vineyard property for $4.0 million.
The transaction, expected to close in December, will retire $2.0
million debt with the remaining proceeds flowing to the Company;
and (iv) during the fourth quarter, the Company expect to finalize
an agreement to spin-off its remaining discontinued operations to
a third-party, the objective being to eliminate those non-core
assets, which is consistent with the Company's plan of
discontinued operations.

The Company believes that the combination of the completed and
pending $12.0 million of asset liquidations, and the financing for
equipment that will be needed for additional growth, are
sufficient to meet its liquidity requirements for fiscal 1999.

                 Year 2000 Compliance:

Management of the Company believes that its computerized
information systems currently in use and expected to be in use
prior to the year 2000 are year 2000 compliant.  It has formed a
task force to assess the effect, if any, the Company may encounter
in dealing with vendors and outside service entities who may have
year 2000 exposure.  Management does not expect that the financial
impact of required modifications to its systems, if any, will be
material to the Company's financial position, cash flows or
results of operations in any given year.

<PAGE>


Part II - Other Information
---------------------------

Item 1.  Legal Proceedings

On January 22, 1999, Gus Franklin and Susan Franklin filed a Superior Court
lawsuit in Orange County, Central Justice Center, Case No. 804714, seeking
damages for breach of employment contract, breach of covenant of good faith
and fair dealing, fraud and wrongful termination of employment in violation
of public policy in connection with the termination by the Company of the
Franklins' employment agreements with the Company.  The plaintiffs are seeking
damages, according to proof, including lost salaries, cash and stock bonuses,
stock options and other wages and employment benefits, together with other
expenses and losses.  In addition, the plaintiffs are seeking punitive and
exemplary damages in connection with certain of the causes of action.  The
Company has filed an answer denying any wrongdoing.  However, no assurances
can be given with respect to the outcome of this proceeding.  The Company
believes that the allegations are without merit, and that the outcome of this
lawsuit will not have a material adverse effect on its earnings, cash flow,
or financial position.

The Company is not involved in any other pending legal proceedings other than
legal proceedings occurring in the ordinary course of business.  Such other
legal proceedings in the aggregate are believed by management to be immaterial.

Item 2.  Change in Securities

None.

Item 3.  Defaults Upon Senior Securities

As of the date of filing this report, the Company is in arrears as to quarterly
dividends on its Series A 9% Convertible Preferred Stock and on its Series B
Preferred Stock.  The total amount of dividend arrearages on the Series A 9%
Preferred Stock and on the Series B Preferred Stock was $840,938 and $511,517,
respectively.

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

Not Applicable.

Item 5.  Other Information

Not Applicable.

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits.

          2      Plan of Discontinued Operations (1)

          3.1    Certificate of Incorporation of the Company filed with the
                 Secretary of State of Delaware on March 10, 1988 (2)

          3.2    Certificate of Amendment of Certificate of Incorporation of
                 the Company filed with the Secretary of State of Delaware on
                 December 21, 1988 (2)

          3.3    Certificate of Amendment of Certificate of Incorporation of
                 the Company filed with the Secretary of State of Delaware on
                 March 21, 1989 (2)
<PAGE>



          3.4    Certificate of Designations, Preferences and Relative
                 Rights, Qualifications and Restrictions of the Series A
                 Convertible Preferred Stock of the Company filed with the
                 Secretary of State of Delaware on May 13, 1994 (3)

          3.5    Certificate of Amendment of Certificate of Incorporation of
                 the Company filed with the Secretary of State of Delaware on
                 February 24, 1997 (4)

          3.6    Amended Certificate of Designations, Preferences and
                 Relative Rights, Qualifications and Restrictions of the
                 Series A 9% Convertible Preferred Stock of the Company filed
                 with the Secretary of State of Delaware on November 13, 1997
                 (5)

          3.7    Bylaws of the Company, as amended (4)

          4.1    Trust Indenture between the Company and First City Bank of
                 Dallas (2)

         10.6    Stock Option Agreement dated July 2, 1990 between the
                 Company and Fred H. Behrens (6)

         10.7    Stock Option Agreement dated July 2, 1990 between the
                 Company and Robert A. Wright (6)

         10.8    Stock Option Agreement dated July 2, 1990 between the
                 Company and Marlene A. Tapie (6)

         10.28   Stock Acquisition Agreement dated as of November 25, 1997 by
                 and among Gus Franklin and Susan K. Franklin, the Company
                 and TPE (1)

         10.29   Agreement Regarding Transportation Services dated as of June
                 8, 1998 by and between USA Waste of California, Inc., the
                 Company and AMCOR Biomass, Inc. (1)

         10.30   Commercial Lease dated effective as of November 1, 1998 by
                 and between Desert Mist Cooling and the Company

         21      Subsidiaries of the Company (7)

         27      Financial Data Schedule



-----------------
(1)  Filed as an exhibit to the Company's Form 10-KSB for the fiscal year ended
     August 31, 1998 and incorporated herein by reference.
(2)  Filed as an exhibit to the Company's Form 10-K for the fiscal year ended
     November 30, 1988 and incorporated herein by reference.
(3)  Filed as Exhibit 4.2 to the Company's Form 10-QSB for the quarterly period
     ended May 31, 1994, and incorporated herein by reference.
(4)  Amended Bylaws filed as an exhibit to the Company's Form 10-KSB for the
     fiscal year ended August 31, 1997 as filed with the Commission on December
     5, 1997 and incorporated herein by reference. Additional amendment to
     Bylaws filed as an exhibit to the Company's Form 10-QSB for the quarterly
     period ended February 28, 1998 as filed with the Commission on April 15,
     1998 and incorporated herein by reference.
<PAGE>




(5)  Form of which was filed as an exhibit to Amendment No. 3 to the Company's
     Registration Statement on Form S-2 as filed with the Commission on
     September 22, 1997 (Registration No. 333-28373) and incorporated herein by
     reference.
(6)  Filed as an exhibit to the Company's Form 10-K for the fiscal years ended
     November 30, 1992, 1991, and 1990 as filed with the Commission on March
     15, 1991 and incorporated herein by reference.
(7)  Filed as an exhibit to the Company's Form 10-KSB for the fiscal year ended
     August 31, 1997 as filed with the Commission on December 5, 1997 and
     incorporated herein by reference.
------------------


      (b) Reports on Form 8-K
          Form 8-K, dated January 12, 1999, as filed with the Commission on
          January 27, 1999, reporting on Item 8, Change in Fiscal Year, in
          connection with the Company's Board of Directors' decision to change
          the Company's fiscal year from August 31 to December 31, commencing
          with the calendar year/fiscal year ended December 31, 1998.

<PAGE>






                                  SIGNATURES



Pursuant to the requirement 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.


Date:  November 15, 1999                        USA Biomass Corporation
       ------------------                       -----------------------

                                                /s/Eugene W. Tidgewell
                                                -----------------------
                                                Eugene W. Tidgewell
                                                Chief Financial Officer
                                                (Principal Financial and
                                                Accounting Officer)
<PAGE>





                                EXHIBIT INDEX



     Exhibit No.       Description
     -----------       -------------------------------------------------------

     10.30             Commercial Lease dated effective as of November 1,
                       1998 by and between Desert Mist Cooling and the Company

     27                Financial Data Schedule
<PAGE>