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 ENDING March 31, 2000

                                       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.)



7314 SCOUT AVENUE, BELL GARDENS, CALIFORNIA                    90201
(Address of principal executive offices)                    (Zip Code)


                                 (562) 928-9900
              (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 11,088,666 on May 12, 1999.


<PAGE>


                          PART I. FINANCIAL INFORMATION


Item 1.  Financial Statements

Introduction

     USA Biomass Corporation ("Company") has prepared the consolidated financial
statements,  without  audit,  pursuant  to  the  rules  and  regulations  of the
Securities and Exchange  Commission.  Certain formation and footnote disclosures
normally included in financial  statements prepared in accordance with generally
accepted  accounting  principals have been condensed or omitted pursuant to such
rules and regulations. The Company believes that the disclosures are adequate to
make the information  presented not misleading when read in conjunction with the
Company's  consolidated  financial  statements  for the year ended  December 31,
1999. 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 March 31, 2000 and December 31, 1999
             And For the Three Months ended March 31, 2000 and 1999





Consolidated Financial Statements for USA Biomass Corporation

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

         Statements of Operations .................................  F-3

         Statements of Shareholder's Equity .......................  F-4

         Statement of Cash Flows ..................................  F-6

Notes to the Financial Statements .................................  F-9


<PAGE>



                             USA Biomass Corporation

                           Consolidated Balance Sheets
                       March 31, 2000 to December 31, 1999
                                  (unaudited)
--------------------------------------------------------------------------------


                                     ASSETS


<TABLE>
<CAPTION>
                                                               2000          1999
                                                            -----------   -----------

<S>                                                         <C>           <C>
Current assets:

  Cash and equivalents                                      $ 1,487,000   $ 1,362,000
  Accounts  receivable, net of allowance for doubtful         1,873,000       862,000
  Receivable from affiliates                                    180,000        26,000
  Other current assets                                          979,000       129,000
  Net current assets of discontinued operations               1,349,000     1,249,000
                                                            -----------   -----------
     Total current assets                                     5,868,000     3,628,000
  Property and equipment, net of accumulated depreciation    15,091,000     7,584,000
  Other assets                                                   24,000        32,000
  Intangible assets, net of accumulated amortization          1,415,000       392,000
                                                            -----------   -----------
  Total assets                                              $22,398,000   $11,636,000
                                                            ===========   ===========
</TABLE>


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


                                      F-2

<PAGE>



                             USA Biomass Corporation

                           Consolidated Balance Sheets
                      March 31, 2000 and December 31, 1999
                                   (Unaudited)
--------------------------------------------------------------------------------

                      LIABILITIES AND SHAREHOLDERS' EQUITY



<TABLE>
<CAPTION>
                                                             2000            1999
                                                        ------------    ------------

<S>                                                     <C>             <C>
Current liabilities:

      Accounts payable                                  $  2,271,000    $  1,747,000
      Accrued liabilities                                  1,308,000       1,355,000
      Lines of credit                                        908,000         640,000
      Notes payable:
         Affiliates                                          140,000         191,000
         Other                                             2,152,000         728,000
      Capitalized lease obligations                        1,088,000         810,000
                                                        ------------    ------------
           Total current liabilities                       7,837,000       5,471,000
Notes payable, net of current portion:
      Affiliates                                             633,000       1,021,000
      Other                                                5,213,000       2,333,000
Capitalized lease obligations, net of current portion      2,835,000       2,552,000
                                                        ------------    ------------

Total liabilities                                         16,518,000      11,377,000
                                                        ------------    ------------
Commitments and contingencies

Shareholders' equity:

      Preferred Stock:
           Series A, 9% Convertible Preferred Stock            6,000           7,000
           Series C, 6% Convertible Preferred Stock            1,000            --
      Common stock                                            22,000          19,000
      Additional paid-in capital                          31,451,000      25,235,000
      Accumulated deficit                                (25,329,000)    (24,782,000)
      Notes receivable on common stock                      (153,000)       (103,000)
      Treasury stock                                        (118,000)       (118,000)
                                                        ------------    ------------

Total shareholders' equity                                 5,880,000         259,000
                                                        ------------    ------------

Total liabilities and shareholders' equity              $ 22,398,000    $ 11,636,000
                                                        ============    ============
</TABLE>


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


                                       F-3


<PAGE>

                             USA Biomass Corporation

                      Consolidated Statements of Operations
            For the Three Month Periods Ended March 31, 2000 and 1999
                                   (Unaudited)
--------------------------------------------------------------------------------



<TABLE>
<CAPTION>
                                                     For the Three Month Period Ended March 31,
                                                     ------------------------------------------
                                                               2000           1999
                                                           -----------    -----------
<S>                                                          <C>            <C>
Revenues                                                   $ 2,899,000    $ 2,067,000
Cost of revenues, less depreciation                          2,160,000      1,755,000
                                                           -----------    -----------

      Gross margin                                             739,000        312,000
General and administrative expenses                            488,000        596,000
Depreciation                                                   400,000        277,000
Settlement gain                                               (159,000)          --
                                                           -----------    -----------
      Operating income (loss) from continuing operations        10,000       (561,000)
Interest expense, net                                          141,000        212,000
                                                           -----------    -----------

Loss from continuing operations and net loss               $   131,000    $   773,000
                                                           ===========    ===========



Net loss per common share, basic and diluted               $      0.11    $       .14
                                                           ===========    ===========
</TABLE>

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


                                       F-4

<PAGE>


                             USA Biomass Corporation

                 Consolidated Statements of Shareholders' Equity
            For the Three Month Periods Ended March 31, 2000 and 1999
                                   (Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                         Series A        Series B                         Shares        Series A
                                                        Preferred       Preferred        Common           Held in      Preferred
                                                         Shares           Shares         Shares          Treasury         Stock
                                                       ------------    ------------    ------------   ------------    ------------
<S>                                                        <C>             <C>           <C>              <C>               <C>
Balance, December 31, 1998                                 747,500         394,414       7,761,385        (24,000)          7,475
   Net loss                                                   --              --             --              --              --
                                                      ------------    ------------    ------------   ------------    ------------
Balance, March 31, 1999                                    747,500         394,414       7,761,385        (24,000)   $      7,422
                                                      ============    ============    ============   ============    ============
</TABLE>


<TABLE>
<CAPTION>
                                                                                      Common                          Retained
                                                        Series B                       Stock        Additional        Earnings
                                                       Preferred        Common         Held in        Paid-in       (Accumulated
                                                         Stock          Stock         Treasury        Capital          Deficit)
                                                      ------------    ------------   ------------    ------------ ---------------
<S>                                                          <C>      <C>            <C>             <C>           <C>
Balance, December 31, 1998                                   4,000          16,000   $   (118,339)   $ 21,970,000  $ (15,057,000)
   Net loss                                                   --              --             --              --         (773,000)
                                                      ------------    ------------   ------------    ------------   ------------
Balance, March    31, 1999                                   4,000    $     16,000   $   (118,339)   $ 21,970,000   $(15,830,000)
                                                      ============    ============   ============    ============   ============
</TABLE>



                                                               Common
                                           Total
                                        ----------

Balance, December 31, 1998              $6,822,081
   Net loss                              (773,000)
                                         ---------
Balance, March 31, 1999                 $6,049,000
                                         =========


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

                                       F-5

<PAGE>


                             USA Biomass Corporation

                 Consolidated Statements of Shareholders' Equity
            For the Three Month Periods Ended March 31, 2000 and 1999
                                   (Unaudited)
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                         Series A        Series C                         Shares         Series A
                                                        Preferred       Preferred        Common           Held in        Preferred
                                                         Shares           Shares         Shares          Treasury          Stock
                                                       ------------    ------------    ------------   ------------    ------------
<S>                                                        <C>             <C>          <C>              <C>        <C>
Balance, December 31, 1999                                 742,200          --          9,509,856        (24,250)   $      7,000
   Conversion of Series A Convertible Preferred
     Stock to common stock                                (126,700)         --            228,060           --            (1,000)
   Common stock issued on exercise of stock options           --            --            350,750           --              --
   Issuance of Series C Preferred stock                       --           3,000             --             --              --
   Shares issued in acquisition                               --            --          1,000,000           --              --
   Payment of Series A Dividends                              --            --               --             --              --
   Net loss                                                   --            --               --             --              --
                                                      ------------    ----------      -----------    -----------     -----------
Balance, March 31, 2000                                    615,500         3,000       11,088,666        (24,250)   $      6,000
                                                      ============    ==========      ===========    ===========     ===========
</TABLE>

<TABLE>
<CAPTION>
                                                                                       Common                          Retained
                                                        Series C                       Stock        Additional        Earnings
                                                       Preferred        Common         Held in        Paid-in       (Accumulated
                                                         Stock          Stock         Treasury        Capital          Deficit)
                                                      ------------    ------------   ------------    ------------ --------------
<S>                                                       <C>        <C>             <C>             <C>           <C>
Balance, December 31, 1999                                   --      $     19,000    $  (118,000)    $25,235,000   $(24,782,000)
   Conversion of Series A Convertible Preferred
     Stock to common stock                                   --              --             --             1,000           --
   Common stock issued on exercise of stock options          --             1,000           --           738,000           --
   Issuance of Series C Preferred stock                   $1,000             --             --         2,832,000           --
   Shares issued in acquisition                              --             2,000           --         2,645,000           --
   Payment of Series A Dividends                             --              --             --              --         (416,000)
   Net loss                                                  --              --             --              --         (131,000)
                                                      ----------      -----------    -----------     -----------    -----------
Balance, March 31, 2000 (Unaudited)                       $1,000     $     22,000   $   (118,000)   $ 31,451,000   $(25,329,000)
                                                      ==========      ===========    ===========     ===========    ===========
</TABLE>

                                                         Notes
                                                     Receivable on
                                                        Common
                                                         Stock        Total
                                                      ----------   ------------
Balance, December 31, 1999                            $(103,000)   $    258,000
   Conversion of Series A Convertible Preferred
     Stock to common stock                                  --             --
   Common stock issued on exercise of stock options     (50,000)        689,000
   Issuance of Series C Preferred stock                     --        2,833,000
   Shares issued in acquisition                             --        2,647,000
   Payment of Series A Dividends                            --         (416,000)
   Net loss                                                 --         (131,000)
                                                       ---------   ------------
Balance, March 31, 2000 (Unaudited)                    $(153,000)  $  5,880,000
                                                       =========   ============

                                       F-6


<PAGE>

                             USA Biomass Corporation

                      Consolidated Statements of Cash Flows
            For the Three Month Periods Ended March 31, 2000 and 1999
                                   (Unaudited)
--------------------------------------------------------------------------------

                                                   March 31,       March 31,
                                                      2000           1999
                                                  -----------    -----------

Cash flows from operating activities:
  Net income (loss)                               $  (131,000)   $  (773,000)
                                                  -----------    -----------
Net loss from continuing operations                  (131,000)      (773,000)
Adjustments to reconcile net loss to net cash
   used in operating activities:
    Depreciation and amortization                     400,000        277,000
    Loss on sale of assets                               --           12,000
Decrease (increase) in assets:
    Accounts Receivable                              (411,000)      (595,000)
    Other current assets                             (734,000)      (392,000)
    Other assets                                         --         (156,000)
    Notes receivable                                     --         (309,000)
Increase (decrease) in liabilities:
    Accounts payable                                 (193,000)     1,022,000
    Accrued liabilities                              (233,000)        94,000
                                                  -----------    -----------
Net cash provided by (used) in operating
 activities of continuing operations               (1,302,000)           (36)
Net cash used in operating
 activities of discontinued activities               (252,000)           (68)
                                                  -----------    -----------
Cash provided by (used) in operating activities    (1,554,000)      (538,000)
                                                  -----------    -----------



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


                                       F-7

<PAGE>


                            USA Biomass Corporation
                     Consolidated Statements of Cash Flows
               For the Three Month Periods Ended March 31, 2000 and 1999
                                    (Unaudited)
--------------------------------------------------------------------------------

Consolidated Statements of Cash Flows (continued)

<TABLE>
<CAPTION>
                                                        March 31,    March 31,
                                                          2000          1999
                                                         -------      -------

<S>                                                  <C>            <C>
Cash flows provided by (used in) investing
 Activities:
   Purchase of property and equipment                   (778,000)          (985)

   Acquisition of AWT                                   (228,000)          --
                                                     -----------    -----------

Net cash provided by (used in) investing
 Activities of continuing operations                  (1,006,000)          (985)
                                                     -----------    -----------


Cash flows provided by (used in) financing
 activities:
   Proceeds from line of credit                      $   128,000    $      --
   Proceeds from notes and loans                         174,000            250
   Repayment of notes, loans, leases                    (973,000)          (158)
   Proceeds from sale of Preferred Stock               2,833,000
   Proceeds from exercise of options                     689,000
   Payment of dividends                                 (416,000)
                                                     -----------    -----------
                                                       2,435,000

Net cash provided by (used in) financing
 activities of continuing operations                   2,435,000             92
Net cash provided by (used in) financing
 activities of discontinued operations                      --            1,689
                                                     -----------    -----------
Cash provided by (used in) financing activities        2,435,000          1,781
                                                     -----------    -----------
Net increase (decrease) in cash                          125,000           (250)

Cash and equivalent at beginning of period             1,362,000            640
                                                     -----------    -----------
Cash and equivalents at end of period                  1,487,000            390
                                                     ===========    ===========

Cash paid during the period for:
  Interest:
   Continuing operations                                 126,000            305
   Discontinued operations                               111,000            450
                                                     -----------    -----------
                                                     $   237,000    $       755
                                                     ===========    ===========

Fair value of asses acquired                         $ 8,229,000
Liabilities assumed                                    5,354,000
                                                     -----------
                                                       2,875,000
                                                     ===========

Consideration paid:
Cash                                                     228,000
Stock                                                  2,647,000
                                                     -----------
                                                     $ 2,875,000
                                                     ===========
</TABLE>


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


                                      F-8


<PAGE>



                             USA Biomass Corporation
                 Notes to the Consolidated Financial Statements

                              As of March 31, 2000
            For the Three Month Periods Ended March 31, 2000 and 1999
--------------------------------------------------------------------------------

1.   Discontinued Operations

     On  December  22,  1998,  the  Company  adopted  a plan to  dispose  of its
     agribusiness  and real  estate  operations.  In October  1999,  the Company
     transferred  substantially  all of its  remaining  real  estate  assets and
     related  liabilities to AMCOR Financial Corp.  ("AFC"), a then wholly owned
     subsidiary.  In January  2000,  the Company  distributed  to its common and
     preferred  shareholders  all of its AFC  common  shares.  The  Company  has
     disputes with AFC regarding the nature and amount of assets and liabilities
     transferred to AFC. Further, all the regulatory requirements related to the
     distribution of the AFC shares to the Company's  shareholders  may not have
     been satisfied. As a result, the Company continues to record its investment
     related  to  these  real  estate  assets  as  net  assets  of  discontinued
     operations in the consolidated balance sheets.

     At March 31, 2000, the remaining assets of the discontinued  operations are
     the Company's  receivable from a partnership  that owned a golf course sold
     in foreclosure in February 2000, certain housing development land in Texas,
     and a 50%  interest  in PS III Farms,  LLC,  which owns 6,490 acres that it
     leases  to a limited  liability  company  owned by the  other  50%  venture
     partner.  The real estate  assets have been pledged as  collateral on notes
     payable on which the Company is primarily  liable  totaling $3,439 at March
     31, 2000,  which is included in the net assets of discontinued  operations.
     The lender that  foreclosed  upon the golf  course  property  notified  the
     Company that a deficiency of $1,600,000 exists after the foreclosure and in
     April 2000 filed a related lawsuit.

2.   Loss per Common Share

     Basic and diluted loss per common share have been  computed by dividing the
     loss available to common  stockholders  by the  weighted-average  number of
     common shares for the period.  Loss available to common stockholders is the
     loss after adding to the loss any preferred  stock  dividend  requirements.
     The  additional  common  shares  that would be  issuable  for  options  and
     warrants  outstanding are ignored, as to include them in the calculation of
     diluted loss per share would be antidilutive.

     The computations of basic and diluted loss per common share are as follows:

                                              Three month period Ended March 31,
                                              ----------------------------------
                                                      2000          1999
                                                  -----------   -----------

     Loss from continuing operations              $   131,000   $   773,000
          Add: dividends on preferred
            shares-declared                           416,000          --
          Add: dividends on preferred shares
             - cumulative, not declared               554,000       277,000
                                                  -----------   -----------
      Net loss available to common
       shareholders                               $ 1,101,000   $ 1,050,000
                                                  ===========   ===========
       Weighted average shares - basic and
          diluted                                  10,299,261     7,761,385
                                                  ===========   ===========
       Net loss per share available to
         Common shareholders - basic and
         diluted                                  $       .11   $      0.14
                                                  ===========   ===========
                                   F-9


<PAGE>



                             USA Biomass Corporation
                 Notes to the Consolidated Financial Statements

                              As of March 31, 2000
            For the Three Month Periods Ended March 31, 2000 and 1999
--------------------------------------------------------------------------------

2.   Loss per Common Share, Continued

     The effect of the  potentially  dilutive  securities  listed below were not
     included in the computation of diluted  earnings per share because to do so
     would have been antidilutive for the periods presented.

                                              Three month period Ended March 31,
                                              ----------------------------------
                                                        2000         1999
                                                     ---------    ---------


     Shares of common stock issuable under:
        Employee stock options                         256,100      982,883
        Warrants                                       239,500      479,500
        Series A Convertible Preferred Stock         1,107,000    1,345,500
        Series B Convertible Preferred Stock              --        591,621
        Series C Convertible Preferred Stock           340,000         --

3.   Business Segments

     SFAS No.  131,  Disclosure  about  Segments  of an  Enterprise  and Related
     Information,   establishes   standards  for  reporting   information  about
     operating  segments in annual  financial  statements and requires  selected
     information about operating segments in interim financial reports issued to
     stockholders. Operating segments are defined as components of an enterprise
     about which separate  financial  information is available that is evaluated
     regularly by the chief operating decision maker in deciding how to allocate
     resources and in assessing performance.

     Each of these operating  segments is considered a reportable  segment.  The
     Company  evaluates the performance of its segments and allocates  resources
     to them based on revenue and EBITDA. The Company defines EBITDA as earnings
     before interest,  income taxes,  depreciation and  amortization,  and other
     nonoperating income and expense.

     Certain financial information is presented below:

<TABLE>
<CAPTION>
                                             Green Waste         Waste
                                              Recycling        Transport        Other           Total
                                             ------------    ------------   -------------    -----------
<S>                                          <C>             <C>            <C>             <C>
     Three months ended March 31, 2000:
        Revenue                              $    636,000   $  2,263,000           --      $  2,899,000
        EBITDA                                    165,000        318,000   $    (73,000)        410,000
        Assets                                  2,206,000     15,696,000      4,496,000      22,398,000
        Depreciation and amortization              85,000        315,000           --           400,000
        Interest, net                              23,000        117,000          2,000         142,000

     Three months ended December 31, 1999:
        Revenue                                   797,000      1,270,000           --         2,067,000
        EBITDA                                     107,00        321,000       (498,000)       (284,000)
        Assets                                  1,975,000      5,850,000      3,811,000      11,636,000
        Depreciation and amortization             127,000        150,000           --           277,000
        Interest, net                             112,000        109,000        (10,000)        212,000
</TABLE>


                                      F-10


<PAGE>



                             USA Biomass Corporation
                 Notes to the Consolidated Financial Statements

                              As of March 31, 2000
            For the Three Month Periods Ended March 31, 2000 and 1999
--------------------------------------------------------------------------------

4.   Acquisition of American Waste Transport

     In March 2000, the Company  acquired  substantially  all of the outstanding
     shares  of  American  Waste  Transport  ("AWT")  for cash in the  amount of
     $750,000  and up to one  million  shares  of the  Company's  common  stock,
     subject to resolution of certain  contingencies.  This business combination
     is to be accounted for using the purchase method.

     The following  unaudited pro forma  consolidated  results of operations are
     presented as if the  acquisition  of AWT had taken place at January 1, 2000
     and 1999.

                                              Three month period Ended March 31,
                                              ----------------------------------
                                                     2000           1999
                                                  ----------     ----------
     Revenue                                      $5,052,000     $5,610,000
                                                  ==========     ==========
     Net loss from continuing operations          $  103,000     $  371,000
                                                  ==========     ==========
     Net loss                                     $  103,000     $  371,000
                                                  ==========     ==========

     The assets and  liabilities  of AWT  included in the  consolidated  balance
     sheet at March 31, 2000 follows:

        Current assets:
             Cash                                               $   299,000
             Accounts receivable                                    896,000
             Due from related party                                 135,000
             Other current assets                                   392,000

                                                                -----------
                  Total current assets                            1,722,000
        Property and equipment                                    7,479,000
        Goodwill                                                  1,036,000

                                                                -----------
        Total assets                                            $10,237,000
                                                                ===========

        Current liabilities:
             Accounts payable                                   $ 1,007,000
             Line of credit                                         892,000
             Capitalized leases and notes payable
                                                                  1,889,000
             Other current liabilities                              475,000

                                                                -----------
                  Total current liabilities                       4,263,000
        Capitalized leases and notes payable                      2,319,000

                                                                -----------
                                                                  6,582,000
        Equity                                                    3,655,000

                                                                -----------
        Total liabilities and shareholders' equity              $10,237,000
                                                                ===========


                                      F-11


<PAGE>


                             USA Biomass Corporation
                 Notes to the Consolidated Financial Statements

                              As of March 31, 2000
            For the Three Month Periods Ended March 31, 2000 and 1999
--------------------------------------------------------------------------------

5.   Sale of Series C Convertible Preferred Stock

     In March 2000,  the Company issued 3,000 shares of its Series C Convertible
     Preferred stock at $1,000 per share. In conjunction with the offering,  the
     Company issued warrants to purchase  100,000 shares of the Company's common
     stock at $4.65 per share.  The  warrants may be exercised at any time until
     they expire on March 31, 2005.

     The Series C Convertible  Preferred  shares may be converted at any time at
     $4.65 per share and provide for a 6% annual dividend rate. In addition, the
     Company is precluded from payment of dividends on or purchase of its common
     stock.

     A portion of the proceeds of this offering was used for the AWT acquisition
     described  above  and  for  the  payment  of  dividends  on  the  Series  A
     Convertible  Preferred stock. The remaining  proceeds of this offering will
     be used for working capital.


                                      F-12



<PAGE>



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

Overview

The  Company's  operations at March 31, 2000  included:  (i) "clean green" waste
processing and recycling ("biomass") and (ii) contract waste transport services.
During  1997,   the  Company's   focus  shifted  from   agribusiness   and  land
planning/development  to  biomass.  Subsequently,  in  June  1998,  the  Company
broadened  its new focus to include solid waste  transportation  and developed a
strategic  alliance with Waste  Management,  Inc.,  formerly USA Waste  Services
("Waste Management").  During the second half of 1998, in light of the Company's
strategic  alliance  with Waste  Management  and related  existing 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 a Plan of  Discontinued  Operations  (the  "Plan")  pursuant to
which   the   Company   will    discontinue    its    agribusiness    and   land
planning/development activities and will focus on its solid waste transportation
and biomass activities. In addition, on January 12, 1999, the Board of Directors
approved a change in the Company's fiscal year end to December 31.

Implementation  of the Plan has had a material impact on the presentation of the
Company's financial statements. All business activity, cash flows and net assets
of these  operations  for the year ended  December 31,  1999,  and for the three
months ended March 31, 2000 have been classified as discontinued operations, and
the  assets of these  operations  have been  reduced to the lower of cost or net
realizable value.

Results of Operations

The Company's  continuing  operations consist of solid waste  transportation and
biomass  activities,  which include green waste recycling.  The Company has 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 three months ended
March 31, 2000,  reflect  exclusively its biomass activities and waste transport
revenue,  whereas  revenues  for the three  months  ended March 31,  1999,  also
reflect  $363,000 of revenues from tree  maintenance  operations which were sold
late in the first quarter,  1999.  Revenues for the three months ended March 31,
2000 were $2,899,000,  which included  $982,000 of revenues from the acquisition
of American Waste  Transport  ("AWT") in March 2000,  and were up  significantly
(40%) from  $2,067,000  for the three months  ended March 31, 1999.  The Company
expects  revenues to  continue to increase in fiscal 2000 as the  transportation
division revenues grow both internally and as new contracts are phased in as the
Company expands its biomass operations, and from acquisitions, such as AWT.

Cost of Revenues:

Cost of revenues  (excluding  $400,000 of  depreciation)  of $2,160,000  for the
three months ended March 31, 2000,  were up $378,000  (21%) from the  comparable
three  months  period  ending  March 31, 1999,  mainly from  internal  growth in
biomass  activities,  and  from  the  acquisition  of AWT  which  was  completed
effective March 1, 2000, and contributed 34% of the first quarter revenues.

Gross  profit  from  operations  (excluding  depreciation)  was  $739,000  (25%)
compared to $285,000  (14%) for the prior  three  month  period,  due largely to
higher  volume  in  2000  and the  related  economies  of  scale.  However,  the
1999-quarter also included tree maintenance  operations,  which generated a loss
of $146,000, thereby adversely impacting the prior period's gross profit.

<PAGE>


General and Administrative Expenses:

For the three  months  ended March 31, 2000,  total  general and  administrative
expenses of $488,000  were down $81,000  (14%) from the  comparable  three month
period  ending March 31, 1999,  mainly due to the phasing down of the  Company's
discontinued  agribusiness and land planning/development  activities,  and other
cost cutting by management pursuant to the Plan of Discontinued Operations.

Settlement Gain:

During the three months ended March 31, 2000, the Company  realized a settlement
gain of $159,000 based on proceeds  received from the settlement of a lawsuit in
late 1999. There was no such gain in the comparable three month period in 1999.

Interest Expense, Net of Interest Income:

For the three  months ended March 31, 2000,  interest  expense,  net of interest
income was $141,000, a decrease of $71,000 (33%) from the comparable three month
period ending March 31, 1999, mainly due to the Company's debt being reduced 42%
in 1999 from the sale of discontinued operations,  which was partially offset by
$26,000 of interest incurred by AWT.

Results from Continuing Operations:

For the three months ended March 31, the Company reported a loss from continuing
operations  of $131,000  compared to a net loss of $773,000  for the  comparable
three  month  period  ending  March 31,  1999,  the  improvement  due  mainly to
increased  margins from  transportation  and biomass,  and the absence of losses
from tree maintenance operations which were $220,000 for the quarter ended March
31, 1999.

Results of Discontinued Operations:

For the three months ended March 31, 2000, results from discontinued  operations
were zero, the same as the comparable  three month period ending March 31, 1999,
mainly due to the  previous  accrual of all  operating  losses for  discontinued
operations.

Liquidity and Capital Resources:

The Company's overall  financial  condition as of March 31, 2000, as compared to
December  31,  1999,  has  improved   considerably  with  shareholders'   equity
increasing  over  2,100% to  $5,880,000,  due  primarily  to the  issuance of $3
million  of new  preferred  stock  and  from  the  acquisition  of  AWT --  both
transactions  occurring in March 2000.  During  1999,  total debt was reduced by
$8.3 million  (42%) to $11.4  million,  which has yielded  significant  interest
savings for the first quarter. (The acquisition of AWT did, however, cause total
debt to increase to $16.5 million.) In addition, revenues from expanding biomass
operations increased 70% over the comparable quarter (excluding $363,000 of tree
maintenance  revenues) and are expected to exceed all of 1999's revenues by June
30, 2000.  This increase is largely due to the  acquisition  of AWT which,  when
consolidated  with the Company,  should generate  revenues at the annual rate of
$25 million -- an increase of 227% over 1999, and with improving margins, should
generate adequate funds for operations. For example, for the quarter ended March
31,  2000,   EBITDA  (Earnings  Before  Interest,   Taxes,   Depreciation,   and
Amortization) was $410,000 (positive) compared to a negative $284,000 EBITDA the
comparable prior three month period. Moreover, USA Biomass now has a contractual
backlog in place of more than $350  million  with terms  generally  exceeding 10
years or longer, ensuring consistent revenue for future periods.

The Company's  current ratio, at .75,  improved  marginally from .66 at December
31,  1999.  This is primarily  due to over $1.4  million of term notes  becoming
current in the first  quarter,  which the Company  intends to  refinance  during
2000.  However,  liquidity is expected to improve during 2000 as a result of the
following:  (i) the  intense  management  of cash  flow;  (ii) the  Company  has
adequate lines of credit in place and has plans to moderately expand both senior
and  subordinated  debt to fund working  capital  related to the Company's large
contract  backlog;  (iii) during 2000 the Company  expects to liquidate all or a
part of its $2.6 million agricultural property investment,  (iv) the Company has
tax-loss  carry-forwards  exceeding  $22 million which can be applied to shelter
future earnings thereby


<PAGE>


enhancing cash flow,  and (v) the Company  intends to, where  appropriate,  make
acquisitions  using its common  stock for the  generation  of earnings  and cash
flow.  It is for the  foregoing  reasons  that  the  Company  believes  that its
liquidity needs for the year 2000 will be sufficiently satisfied. Moreover, with
its  discontinued   operations  now  partially   liquidated,   the  Company  has
strategically  positioned  itself  to  profitably  capitalize  on  the  numerous
opportunities now available in the biomass industry.

Year 2000 Compliance

To date management of the Company believes that its software packages  currently
in use are Year 2000  compliant.  Management  does not expect that the financial
impact of required  modification  to such software,  if any, will be material to
the  Company's  financial  position,  cash flows or results of operations in any
given year.

                            PART II OTHER INFORMATION

Item 1. Legal Proceedings

In December  1997,  a judgment  was  entered  against the Company and two of its
officers,  who are also  shareholders.  The  Company has filed an appeal of this
judgment.

On April 5,  2000,  a bank  filed a lawsuit  against  the  Company  related to a
deficiency  pertaining  to real property the bank  foreclosed  on in Texas.  The
Company  intends to vigorously  defend against this lawsuit and believes that it
has recorded its  liability  related  thereto in its  financial  statement.  The
Company does not expect that this matter will have a material  adverse effect on
the Company's financial condition or results of operations.

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.  The total amount of
dividend arrearages was $553,959.

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.

          1    Not applicable

          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)

          3.4  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 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)

          3.7  Bylaws of the Company, as amended (4)

          4.1  Certificate of  Designations,  Preferences  and Relative  Rights,
               Qualifications  and  Restrictions  of the Series C 6% Convertible
               Preferred  Stock of the Company filed with the Secretary of State
               of Delaware on April 13, 2000

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

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

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

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

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



<PAGE>



          10.5 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)

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

          10.7 Securities Purchase Agreement dated March 14, 2000 by and between
               Siete Investors LLC, a Delaware limited  liability  company,  and
               the Company,  including  Registration Rights Agreement as exhibit
               thereto(8)

          10.8 Agreement  and Plan of Merger  dated March 1, 2000 by and between
               Fred  Alexander,  Linda  Alexander,  AWT Acquisition  Corp.,  AGI
               Acquisition  Corp.,  American Waste Transport,  Inc. and American
               Green Waste, Inc.

          11.  Statement re: Computation of Per Share Earnings (Loss)(5)

          21   Subsidiaries of the Company (7)

          27   Financial Data Schedule

          (b)  Reports on Form 8-K

     Form 8-K,  for event dated  January 12, 1999,  incorporated  herein by this
reference 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.

     Form 8-K,  for  event  dated  March 1,  2000,  incorporated  herein by this
reference as filed with the  Commission on March 15, 2000,  reporting on Item 2,
Acquisition of Assets,  in connection with the acquisition of 100% of the common
stock  of  American  Waste  Transport,  Inc.  from  Fred  and  Linda  Alexander,
non-affiliates of the Company.

     Form 8-K,  for  event  dated  April 8,  2000,  incorporated  herein by this
reference as filed with the  Commission on April 17, 2000,  reporting on Item 5,
Other Events,  in  connection  with the grant of a leave of absence to Robert A.
Wright from the service of the Company as president of the Company.

     Form 8-K,  for event  dated  April 19,  2000,  incorporated  herein by this
reference as filed with the  Commission on April 20, 2000,  reporting on Item 5,
Other  Events,  in  connection  with the filing of a pro forma  balance sheet at
February  29,  2000,  to exhibit the  Company's  compliance  with the NASDAQ net
tangible  equity  requirement  for continued  listing on the Small Cap Quotation
Service.


<PAGE>

----------
(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.

(5)  Included in Financial Statements

(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.

(8)  Filed as an exhibit to the Company's  Form 10-KSB filed with the Commission
     on April 14, 2000, and incorporated herein by reference.


                                   SIGNATURES

Pursuant  to the  requirements  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,  in the City of Long  Beach,  State of
California.

Date: May 15, 2000

                                        USABiomass, Inc.,
                                        a Delaware corporation

                                        By:
                                             ----------------------------------
                                             Fred Behrens

                                        Its: Chief Executive Officer