INTERNATIONAL FUEL SOLUTIONS INC, 10KSB, 1998-10-13

INTERNATIONAL FUEL SOLUTIONS INC
10KSB, 1998-10-13
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB

(Mark One)
[x] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

[ ] Transitional Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the Fiscal Year Ended June 30, 1998

Commission File No. 0-23485

INTERNATIONAL FUEL SOLUTIONS, INC.
----------------------------------
(Name of small business issuer in its charter)

LBF CORPORATION
---------------
(Former Name of Issuer)

Nevada 98-0177646
------ ----------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)

Suite 106, 1460 Pandosy St.
Kelowna, British Columbia
Canada V14 1P3
(250) 868-8445
--------------
(Address, including zip code and telephone number, including area
code, of registrant's executive offices)

Securities registered under Section 12(b) of the Exchange Act:
none

Securities registered under to Section 12(g) of the Exchange Act:
Common Stock
------------
(Title of class)

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 preceding 12 months (or for such shorter period that the
Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
--- ---

Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this
Form 10-KSB. X
---
(Continued on Following Page)

<PAGE>
Issuer's revenues for its most recent fiscal year: $ -0-

State the aggregate market value of the voting stock held by non-
affiliates, computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as of
a specified date within the past 60 days: As of September 30, 1998:
$-0-.

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: As of
September 30, 1998 there were 17,500,000 shares of the Company's
common stock issued and outstanding.

Documents Incorporated by Reference: Form 8-K dated June 5, 1998,
June 12, 1998 and June 25, 1998, which are incorporated into this
Form 10-KSB by reference thereto.

This Form 10-KSB consists of 37 pages.
Exhibit Index is Located at Page 34.

<PAGE>
TABLE OF CONTENTS

FORM 10-KSB ANNUAL REPORT

INTERNATIONAL FUEL SOLUTIONS, INC., f/k/a LBF CORPORATION

PAGE

Facing Page
Index
PART I
Item 1. Description of Business..................... 4
Item 2. Description of Property..................... 10
Item 3. Legal Proceedings........................... 10
Item 4. Submission of Matters to a Vote of
Security Holders........................ 10

PART II
Item 5. Market for the Registrant's Common Equity
and Related Stockholder Matters......... 11
Item 6. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.............................. 11
Item 7. Financial Statements........................ 14
Item 8. Changes in and Disagreements With
Accountants on Accounting
and Financial Disclosure................ 27

PART III
Item 9. Directors, Executive Officers, Promoters
and Control Persons; Compliance with
Section 16(a) of the Exchange Act....... 27
Item 10. Executive Compensation...................... 29
Item 11. Security Ownership of Certain Beneficial
Owners and Management................... 30
Item 12. Certain Relationships and Related
Transactions............................ 31

PART IV
Item 13. Exhibits and Reports of Form 8-K............ 32

SIGNATURES............................................. 33

EXHIBIT INDEX ......................................... 34

<PAGE>
PART I

ITEM 1. DESCRIPTION OF BUSINESS.

International Fuel Solutions, Inc. (the "Company"), f/k/a LBF
Corporation, was incorporated on February 17, 1993 under the laws
of the State of Nevada to engage in any lawful corporate purpose.
Until June 1998, other than issuing shares to its shareholders, the
Company never commenced any other operational activities.
Effective June 25, 1998, the Company accomplished its initial
business plan as outlined in its Form 10-SB Registration Statement
filed with the SEC in December 1997, wherein it acquired certain
patent application rights (the "FES Assets") from FES Innovations,
Inc., a British Columbia, Canada corporation ("FES"). The relevant
terms of the transaction provided for the Company to (i) undertake
a "forward split" of its common stock, whereby 10 shares of common
stock were issued in exchange for each share of common stock then
issued and outstanding, in order to establish the number of issued
and outstanding common shares of the Company at Closing to be
5,000,000 shares; and (ii) issue to FES and its assigns an
aggregate of 12,500,000 "restricted" common shares (post split),
representing approximately 71.4% of the Company's outstanding
common stock.

The patent rights acquired in the FES Assets consists of a
patent application for a fuel heating apparatus which is integrated
into the fuel line of an internal combustion engine. The apparatus
is composed of heat conductive material having a passageway and an
embedded heating element near the passageway which, by use of a
temperature sensor which senses the temperature of the fuel at the
output of the passageway, heats fuel flowing in the passageway to
an optimum burning temperature for the engine intended to maximize
fuel efficiency and engine performance of internal combustion
engines as well as reduce pollutants. To the extent that the
patent application includes applications to diesel engines, such
applications are excluded from the patent rights acquired by the
Company.

In the immediate future, the Company intends to raise a
sufficient amount of equity capital in order to perform additional
research and development activities on the apparatus to insure
commercial viability and thereafter, it is expected that additional
equity capital will be required to enter into the sale and
marketing aspect of the Company's business. See "Part II, Item 6,
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - Plan of Operation." There can be no
assurances that the Company will be able to generate sufficient
equity or debt capital in which to fully implement its business
plan.

In addition to its research and development activities, as of
the date of this report the Company has filed or been assigned

<PAGE>
patent applications in over 140 countries, receiving approval of
the same in a majority of these jurisdictions. A working prototype
has been developed in order to undertake field tests with three
separate fuel burning systems (carburation, fuel injection and a
combination of the two). The results obtained from these tests
were sufficiently encouraging for the Company to retain independent
entities to conduct tests of the prototypes, including OceanAir
Environmental Systems, Santa Barbara, California, who is
undertaking US testing, and the Ministry of Environment in Ottowa,
for Canadian testing. This testing will include testing for
hydrocarbons, nitric oxide and other nitrogen based gases, carbon
monoxide, carbon dioxide and other emissions which are detrimental
to the environment.

Based upon the results of these tests, the Company plans on
raising additional equity capital to exploit the technology and
address marketing and distribution strategies, as well as the
continuation of research and development of the system for
additional applications in other sectors and industries, with an
emphasis focusing on strategic alliances and/or joint venture
partners in order to effectively achieve market penetration.

To date, research and development operations have been
conducted within the business facilities of FES in Kelowna, B.C.
While the Company owns the patent application rights to the "Fuel
Solution," FES has been contracted with the Company to continue all
research and development requirements that will enable the "Fuel
Solution" to become a viable product. As a result, FES has focused
the Company's resources on a single specific market - the
automobile. Analytical testing and continued product enhancements
have been the primary focus of the Company, while management
speculates that in the near future research and development efforts
will then concentrate on two distinct areas - enhancements to the
gasoline engine product in response to independent test data and/or
customer requirements and the development of additional
applications of the key technology.

The technology controls the temperature of a liquid as it
passes uninterrupted through the heat exchange unit. The unit
senses the temperature of the liquid in-line and its electronic
temperature control apparatus manages the heating of the fluid so
that it is warmed and then held stable at the desired temperature.
Use of the device is expected to improve the efficiency and
performance of internal combustion engines and potentially allows
the engine to operate more economically by minimizing fuel
consumption as well as limiting harmful exhaust and resulting air
pollution while also allowing for cleaner engine oil and less build
up of varnish on cylinder walls.

- Unit Installation: The heating unit is integrated into
the fuel line of the vehicle. It is then secured firmly
in place much like installing an in-line fuel pump. Once

<PAGE>
connected to an electrical source, the product is pre-set
to heat the fuel as it passes through the unit on its
path to the engine. Installation requires a reasonable
level of familiarity with automotive mechanics. It does
not, however, require a significant degree of specialized
training or technological know how.

- Design: Through several revisions, a prototype was
designed with a stainless steel casing surrounding all
components. The final production model will feature a
molded polyabide nylon casing which will be more
conducive to the unit's efficiency of heat retardation.
This design was also tested for "off road" use by four
wheel drive vehicles to ensure the stabilization of the
unit's electronic component structure. Future designs
will include those intended for RV, agriculture and
marine applications.

- Field Test Results: Field testing was performed using
actual driving conditions. Vehicles were driven to a
predetermined destination (typically 250 kms. return
trip) while fuel consumption records were maintained
before and after the introduction of the heat exchange
unit. Three vehicles were tested including an older
model carburetor style engine and two recently
manufactured fuel injection models. A variety of road
conditions and vehicle load ratios were analyzed. Each
test situation displayed a significant increase in fuel
efficiency.

Independent testing of the "Fuel Solution" is the next
phase of the project. Testing will involve the
assessment of fuel displacement in test vehicles and the
measurement of emissions and pollutant particles. Tests
will be conducted by two widely recognized testing
facilities: OceanAir Environmental Systems, Inc. of
Santa Barbara, California, and the Ministry of
Environment in Ottawa, Canada.

Management believes that the primary benefits of the heat
exchange unit is to (a) increase fuel efficiencies and economy for
the retail consumer with no additional cost during the life of the
unit, and (b) decrease harmful exhaust emissions and particle
pollutants while conforming to increasing environmental emissions
restrictions. For the average automobile owner, the obvious
influential factor to purchase the "Fuel Solution" would be the
increased savings achieved through increased fuel efficiency.
Price per unit may be a consideration, but given the relatively
short payback period and the minimal cost of installation,
management does not feel this to be a detrimental factor when
considering potential sales of the unit.

<PAGE>
Environmental concerns regarding emissions and pollutants is
a global consideration of the systems benefits. At the present
time, few areas in North America have imposed emission laws
limiting the emissions of vehicles. However, legislators in both
the U.S. and Canada are currently under pressure to conform to
United Nations concerns of emissions contributing to global warming
and the "Green House" effect. This policy is most notable in the
United States in areas such as California and internationally in
cities such as Mexico City and Tokyo.

Management believes that there are several markets that
present themselves to the Company that would in turn benefit from
utilizing the heat exchange system. These applications may require
modifications to the unit's component design or structure, but
management is confident these modifications are viable and
economically feasible.

- Automotive: The market with the most immediate
requirements for a preliminary design with over
200,000,000 vehicles in use in North America. To date,
testing has provided management with a basis to realize
the potential of the "Fuel Solution's" capabilities.
Upon completion of independent laboratory testing, the
Company will then be prepared to consider a joint venture
partner to take the unit to the next phase of
development.

- Marine: The majority of pleasure crafts under 25 feet
are typically gasoline engines which consume large
quantities of fuel in the course of their operation due
to the resistance of water compared to the resistance of
air for automobiles. With an average use of 300 engine
hours per year, the market for the "Fuel Solution" within
the pleasure craft market appears to be substantial.

- Agriculture: Although the use of gasoline engines in the
agriculture market is smaller than that of the diesel
engine, there is still a significant market with regards
to landscaping equipment, farming equipment, and other
small engine applications such as motorcycles, all
terrain vehicles, snowmobiles, etc.

- Recreational Vehicles: There are literally millions of
recreational vehicles in use today in North America. The
majority of RV's are gasoline powered with higher end
models utilizing diesel fuel. The consumption of
gasoline is extremely high due to the load ratio of the
vehicle. For example, a 28 foot motor home will achieve
an approximate seven to ten miles per gallon when using
a 454 cubic inch engine. A larger vehicle, or larger
load ratio, would consume even more fuel, lowering the
fuel efficiency even further. Given the vast distances

<PAGE>
driven by RV owners, the savings would be exponentially
beneficial.

- Commercial Vehicles: The commercial vehicle, or fleet
vehicle sector, would demonstrate the superlative
benefits from a monetary perspective by the use of the
"Fuel Solution." Firstly, due to the high fuel
consumption for shipping, courier and sales companies,
these benefits would be demonstrated in their balance
sheets. Secondly, most courier and shipping companies
utilizing fleets of vehicles consume massive amounts of
fuel and produce high quantities of emissions. Reducing
the consumption of fuel will thereby reduce the amount of
emissions released into the atmosphere which will in turn
enhance and project any company's public relations image
as an environmentally concerned business.

Further, the patented technology may also be relevant in a
range of instances in which controlling the line temperature of a
liquid in motion would be seen as an enhancement.

The market potential for the Company's heat exchange system is
diverse with significant opportunities in a number of sectors with
a variety of applications. With automotive, marine, commercial
vehicle, agriculture and recreational vehicle applications as
potential markets, management believes that the Company must look
at the global requirements in these markets in order to realize the
opportunities that may present themselves to the Company.

Vehicle exhaust emissions are responsible for more than half
of the hydrocarbons and greater than a third of the nitrous oxide
and carbon monoxide present in the air in the United States. These
compounds are directly responsible for acid rain, a majority of the
air born contracted cancers and various respiratory illnesses. In
addition, the introduction of hydrocarbons into the atmosphere
results in the production of ozone which has direct influence on
the scope of global warming.

Current worldwide oil consumption is projected to increase in
the range of 1% to 2% per year through the year 2010. These
figures are based on the anticipated increased fuel demands of the
developing nations in Asia and the return of consumers in the West
to larger, less fuel efficient vehicles. Crude oil prices are
anticipated to remain stable or increase slightly over the same
period. Current known fuel reserves of OPEC and non-OPEC nations
combined represent over 100 years of annual fuel consumption
allowing for projected worldwide rates of growth in fuel
consumption.

The United States represents the single largest market sector
in the world with over 200,000,000 vehicles currently on the road.
The automotive industry is the single largest market sector in the

<PAGE>
U.S. economy representing over one trillion dollars in annual sales
of vehicles and related products.

In addition to the sheer size of potential markets worldwide,
governmental and private agencies are giving increased emphasis to
finding solutions to the environmental impact of gasoline vehicle
exhaust emissions. Countries such as Mexico and China are
introducing strict legislation directing at limiting exhaust
emissions and providing funding to finance potential solutions.

It is anticipated that governmental agencies and the private
sector will be approached to support continued research and
development initiatives that have to date been financed through the
Company via private financings.

Industry Analysis

The cost and environmental impact of operating a motor vehicle
is of rapidly growing concern to consumers, agencies and
governments worldwide. Inflated gasoline prices, uncertain oil
reserves and the wide-ranging impact of exhaust emission on the
world ecosystem all provide ample motivation for industry to
produce a product that addresses these concerns. To date, however,
potential solutions have been too impractical or costly to garner
wide market acceptance. Consequently, the industry remains
practically open to new efforts and products that address the
growing market demand that now exists.

Employees

The Company presently has two (2) employees, including its
President, Devinder Randhawa and Vice President, Scott Mundell.
See "Part III, Item 9, DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS" below. The Company intends to employ additional
persons on an "as needed" basis, once the Company is able to raise
sufficient capital, of which there is no assurance. Management
believes that its relationship with the Company's employees is
good. No employee is a member of any union.

Competition

The Company's competitors can be categorized into two distinct
groups, the most immediate of which are those that produce directly
related products. A variety of companies presently manufacture and
distribute products that alter the combustion characteristics of
gasoline. Through introducing an electric charge or chemical
compound into the fuel itself, these products purport to influence
fuel efficiency and exhaust emissions. The Company's patent search
has found no product, however, that directly controls the
combustion process through the management of fuel temperature.
Current market structure in this area is made up of a number of

<PAGE>
small to medium size companies, none of which control a significant
portion of the market.

A secondary sector of competition are those companies that
produce alternative fuel technologies. These range from relatively
widely accepted methods such as propane and natural gas to more
innovative and untried technologies such as the hydrogen water cell
engine developed by Ballard Power of Richmond, Canada. Some have
gained a significant level of acceptance, especially in the fleet
vehicle area of the market, but due to the cost of refitting and
relatively limited channels of fuel distribution, the vehicle
market as a whole remains gasoline dependent and will likely remain
so for the foreseeable future.

Trademarks

Patent application approval was granted from the United States
Patent Office in May of 1998 (Application No. 08/798,164, filed
February 10, 1997). That, with ancillary agreements with other
countries, effectively establishes patent rights in most countries
worldwide. Additional patents have been individually applied for
in the remaining countries totaling eventual patent approval in
over 140 countries.

Government Regulations

The Company is not subject to any extraordinary governmental
regulations as of the date of this report.

ITEM 2. DESCRIPTION OF PROPERTY

Facilities. The Company's principal place of business located
at 1460 Pandosy Street, Suite 106, Kelowna, British Columbia,
Canada V1Y 1P3, which consists of 300 square feet of executive
office space. It pays a monthly rent of $500 (CDN). This space is
provided to the Company by Devinder Randhawa, an officer, director
and shareholder of the Company pursuant to an oral sublease
arrangement. The Company's principal offices telephone number is
(250) 868-8445 and facsimile number is (250) 868-8493.

ITEM 3. LEGAL PROCEEDINGS

There are no material legal proceedings which are pending or
have been threatened against the Company of which management is
aware.

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

On June 30, 1998, the shareholders approved, by consent of a
majority of the issued and outstanding stock, an amendment to the
Articles of Incorporation of the Company to change the name of the
Company to its present name.

<PAGE>
PART II

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

(a) Market Information. There is presently no trading market
for any of the Company's securities. Management does intend to
file an application to list the Company's common stock for trading
on the OTC Bulletin Board operated by the National Association of
Securities Dealers in the immediate future. However, there can be
no assurances that the Company will do so, or if it does, that the
Company's application will be approved.

(b) Holders. There are 16 holders of the Company's Common
Stock.

(c) Dividends. The Company has not paid any dividends on its
Common Stock since its inception. The Company does not foresee that
the Company will have the ability to pay a dividend on its Common
Stock in the fiscal year ended June 30, 1999.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with
the Financial Statements and notes thereto included herein. In
connection with, and because it desires to take advantage of, the
"safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, the Company cautions readers regarding certain
forward looking statements in the following discussion and
elsewhere in this report and in any other statement made by, or on
the behalf of the Company, whether or not in future filings with
the Securities and Exchange Commission. Forward looking statements
are statements not based on historical information and which relate
to future operations, strategies, financial results or other
developments. Forward looking statements are necessarily based
upon estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are beyond the Company's control and
many of which, with respect to future business decisions, are
subject to change. These uncertainties and contingencies can
affect actual results and could cause actual results to differ
materially from those expressed in any forward looking statements
made by, or on behalf of, the Company. The Company disclaims any
obligation to update forward looking statements.

Overview

The Company was incorporated on February 17, 1993 under the
name "LBF Corporation" pursuant to the laws of the State of Nevada
to engage in any lawful corporate purpose. In December 1997, the
Company filed a registration statement with the US Securities and

<PAGE>
Exchange Commission on Form 10-SB, registering its common stock
under the Securities Exchange Act of 1934, as amended (the "34
Act"). The Company's intention at that time was to seek to acquire
assets or shares of an entity actively engaged in business which
generated revenues or provided a business opportunity, in exchange
for its securities. In effect, this filing caused the Company to
be a full "reporting company" under the 34 Act.

Effective June 19, 1998, the Company acquired certain patent
application rights (the "Assets") from FES Innovations, Inc., a
British Columbia, Canada corporation ("FES"). The relevant terms
of the transaction provided for the Company to (i) undertake a
"forward split" of its common stock, whereby 10 shares of common
stock were issued in exchange for each share of common stock issued
and outstanding, in order to establish the number of issued and
outstanding common shares of the Company at Closing to be 5,000,000
shares; and (ii) issue to FES and its assigns an aggregate of
12,500,000 "restricted" common shares (post split), representing
approximately 71.4% of the Company's outstanding common stock. As
of the date of this report, the Company has not yet generated any
revenues and is in the process of raising equity capital in order
to commence implementation of its business plan described
hereinbelow and elsewhere in this report.

Plan of Operation

The Company is currently moving from the research and
development stage to producing an effective prototype for field
tests. The prototype was designed in conjunction with Delta
Manufacturing, Inc., a privately owned company based in Tulsa,
Oklahoma. Delta Manufacturing, Inc. manufactures ceramic coils for
heat distribution. With over 100 employees and 25 years in
business, Delta has a proven reputation as a qualified manufacturer
and supplier of ceramic coils.

Upon completion of independent testing, the Company
anticipates a joint venture alliances which will provide the
necessary factors to enable the Company to present itself with a
strategic industry alliance and address production and distribution
issues. Possible joint venture partners may include one or more of
the following: environmental governmental agencies, automotive
manufacturers, automotive parts manufacturers, energy research and
development companies and environmental organizations.

A more complete description of the intentions of the Company
in the immediate future applicable to its plan of operation is
included in "Part I, Item 1, DESCRIPTION OF BUSINESS" above and is
incorporated herein as if set forth.

<PAGE>
Liquidity and Capital Resources

The Company's audited financial statements included in this
report have been prepared on a going concern basis, which
contemplates the maintenance of the Company's net capital
requirements and the realization of assets and liquidation of
liabilities in the normal course of business. The Company has
incurred recurring losses and has limited working capital. The
continuation of the Company as a going concern is dependent upon
achieving and maintaining profitable operations, maintaining its
net capital requirements and raising capital, if required.

In order to allow the Company to commence implementation of
the business plan described in this report, management has
recognized that additional capital must be obtained, either debt or
equity. In response thereto, the Company anticipates that it will
commence a private equity offering in October 1998, wherein it will
attempt to sell up to 2,000,000 shares of the Company's common
stock at a price of $.50 per share, in order to raise up to
$1,000,000. These funds are expected to be utilized to fund the
initial plans of preparing the Company's apparatus for commercial
viability. No underwriter has been retained by the Company in
relation to this private offering and there can be no assurances
that the Company will raise a sufficient amount of equity capital
in which to implement this initial stage of the Company's
development. Failure of the Company to raise sufficient funds in
the aforesaid offering will have a significant negative impact on
the proposed business of the Company.

The Company's cash requirements have been and will continue to
be significant in order to finance its new business plan. The
Company will consider borrowing additional funds or selling
additional stock if the cash requirements exceed cash reserves.
However, there can be no assurances that the Company will be able
to successfully borrow such additional funds on terms beneficial to
the Company, or at all. Additionally, there are no assurances that
the Company will be able to generate any funds from sale of its
securities. Management has had preliminary discussions with
various investment bankers concerning this issue, but as of the
date of this report no commitments to raise additional funds have
been provided to the Company. While management is optimistic of
the Company's ability to implement its business plan included
herein as discussed, there can be no assurances that the Company
will be successful in this regard in the future, as there can be no
assurances that the Company will be successful in obtaining the
necessary financing with which to effect this expansion.

To date, the Company has been financed by private loans in the
amount of $25,000 and $20,388. The latter was provided by an
officer and director of the Company. These loans accrue interest
at the rate of prime plus 1%, are not collateralized and are due
upon demand. It is not anticipated that the holder of these notes

<PAGE>
will make demand on the Company in the near future, or that any of
the proceeds which may be derived from the proposed private
offering of securities will be utilized to repay these obligations.

Inflation

Although management expects that the operations of the Company
will be influenced by general economic conditions once the Company
commences generating revenues, the Company does not believe that
inflation had a material effect on the results of operations during
the fiscal year ended June 30, 1998.

Year 2000 Disclosure

Many existing computer programs use only two digits to
identify a year in the date field. These programs were designed
and developed without considering the impact of the upcoming change
in the century. If not corrected, many computer applications could
fail or create erroneous results by or at the Year 2000. As a
result, many companies will be required to undertake major projects
to address the Year 2000 issue. The Company presently owns less
than $5,000 worth of computers. It utilizes outside contractors
for the bulk of its computer work. These consultants have advised
the Company that they have made all necessary revisions to their
software to avoid any potential problems arising in the year 2000.
Relevant to the Company's computers, management is in the process
of retaining outside computer consultants to assist the Company in
insuring that its computers will not fail in 2000. However, as of
the date of this report, the Company does not have available a
definitive cost applicable to any service to be undertaken on its
computer software to avoid any problems in this regard. While no
assurances can be provided, management believes that such cost will
not be material to the Company.

ITEM 7. FINANCIAL STATEMENTS

<PAGE>

INTERNATIONAL FUEL SOLUTIONS, INC.
(fka LBF Corporation)

Audited Financial Statements

For the Fiscal Years Ended June 30, 1998 and 1997
and the Period February 17, 1993 (Inception)
through June 30, 1998

<PAGE>
International Fuel Solutions, Inc.
(fka LBF Corporation)

TABLE OF CONTENTS

Page
----

Independent Auditors' Report 1

Financial Statements

Balance Sheet 2

Statement of Operations 3

Statement of Cash Flows 4

Statement of Shareholders' Equity 5

Notes to the Financial Statements 6 to 10

<PAGE>
Kish, Leake & Associates P.C.
Certified Public Accountants
J.D.Kish, C.P.A., M.B.A. 7901 E Belleview Ave - Suite 220
James D. Leake, C.P.A., M.T. Englewood, Colorado 80111
--------------------- Telephone (303) 779-5006
Arleen R. Brogan, C.P.A. Facsimile (303) 779-5724

Independent Auditors' Report
----------------------------

We have audited the accompanying balance sheet of International Fuel
Solutions, Inc. (fka LBF Corporation) (a Developmental Stage Company), as of
June 30, 1998 and the related statements of income, shareholders' equity, and
cash flows for the fiscal years ended June 30, 1998 and 1997 and the period
February 17, 1993 (Inception) through June 30, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of International Fuel Solutions,
Inc. (fka LBF Corporation) at June 30, 1998 and the results of its operations
and its cash flows for the fiscal years ended June 30, 1998 and 1997 and the
period February 17, 1993 (Inception) through June 30, 1998 in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5, the
Company is in the development stage and has no operations as of June 30, 1998.
The deficiency in working capital as of June 30, 1998 raises substantial doubt
about its ability to continue as a going concern. Management's plans
concerning these matters are described in Note 5. The financial statements
do not include any adjustments that might result from the outcome of these
uncertainties.

s/Kish, Leake & Associates, P.C.

Kish, Leake & Associates, P.C.
Certified Public Accountants
Englewood, Colorado
September 10, 1998

-1-

<PAGE>
<TABLE>
International Fuel Solutions, Inc.
(fka LBF Corporation)
(A Development Stage Company)
Balance Sheet
______________________________________________________________________________

<CAPTION>
June
30, 1998
--------
<S> <C>
ASSETS

Current Assets - Cash $ 20,150

Other Assets - Patent Application Costs 10,130
--------

TOTAL ASSETS $ 30,280
========
LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES

Current Liabilities

Current Portion - Note Payable $ 25,000
Current Portion - Note Payable Related Party 20,338
Accounts Payable Trade 10,705
--------

Total Current Liabilities 56,043

SHAREHOLDERS' EQUITY

Preferred Stock, $.001 Par Value
Authorized 25,000,000 Shares; Issued
And Outstanding -0- Shares 0

Common Stock, $.001 Par Value
Authorized 50,000,000 Shares; Issued
And Outstanding 17,500,000 Shares 17,500

Additional Paid In Capital 44,654

Deficit Accumulated During The Development Stage (87,917)
--------

TOTAL SHAREHOLDERS' EQUITY (25,763)
--------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 30,280
========

<FN>
The Accompanying Notes Are An Integral Part Of These Financial Statements.

</TABLE>
2

<PAGE>
<TABLE>
International Fuel Solutions, Inc.
(fka LBF Corporation)
(A Development Stage Company)
Statement Of Operations
______________________________________________________________________________

<CAPTION>
February
17, 1993
(Inception)
Year Ended Year Ended Through
June June June
30, 1998 30, 1997 30, 1998
--------- --------- ---------
<S> <C> <C> <C>

Revenue $ 0 $ 0 $ 0
--------- --------- ---------
Expenses:

Consulting 3,013 0 3,013
Legal and Accounting 25,311 0 35,311
Office 252 0 762
Research & Development 44,714 0 44,714
Telephone 166 0 166
Travel 3,951 0 3,951
--------- --------- ---------

Total 77,407 0 87,917
--------- --------- ---------

Net (Loss) ($ 77,407) $ 0 ($ 87,917)
========= ========= =========

Basic (Loss) Per Common Share ($ 0.01) $ 0.00 ($ 0.02)
========= ========= =========

Common Shares Outstanding 5,376,712 5,000,000 5,376,712
========= ========= =========

<FN>
The Accompanying Notes Are An Integral Part Of These Financial Statements.

</TABLE>
3

<PAGE>
<TABLE>
International Fuel Solutions, Inc.
(fka LBF Corporation)
(A Development Stage Company)
Statement Of Cash Flows
______________________________________________________________________________

<CAPTION>
February
17, 1993
(Inception)
Year Ended Year Ended Through
June June June
30, 1998 30, 1997 30, 1998
-------- -------- --------
<S> <C> <C> <C>
Net (Loss) Accumulated During
The Development Stage ($ 77,407) $ 0 ($ 87,917)

Items Not Affecting Cash Flow:

Expenses Paid By Shareholder 20,338 30,338
Issuance Of Common Stock For Services 51,644 0 52,154

Increase in Accounts Payable 10,705 0 10,705
-------- -------- --------
Cash Flows From Operations 5,280 0 5,280
-------- -------- --------

Cash Flows From Investing Activities:

Purchase of Patent (10,130) 0 (10,130)
-------- -------- --------
Net Cash Flows From Investing Activities (10,130) 0 (10,130)
-------- -------- --------

Cash Flows From Financing Activities:

Monies Received from Loan Advances 25,000 0 25,000
-------- -------- --------
Net Cash Flows From Financing Activities 25,000 0 25,000
-------- -------- --------

Net Increase In Cash 20,150 0 20,150
Cash At Beginning Of Period 0 0 0
-------- -------- --------
Cash At End Of Period $ 20,150 $ 0 $ 20,150
======== ======== ========

Non - Cash Activities:

Stock Issued For Cash Advances & Services $ 0 $ 0 $ 510
======== ======== ========

Expenses Paid By Shareholder On Behalf
Of the Company $ 20,338 $ 0 $ 30,338
======== ======== ========

Stock Issued for Acquisition of Patent and
Related Costs $ 52,144 $ 0 $ 52,144
======== ======== ========

<FN>
The Accompanying Notes Are An Integral Part Of These Financial Statements.

</TABLE>
4

<PAGE>
<TABLE>
International Fuel Solutions, Inc.
(fka LBF Corporation)
(A Development Stage Company)
Statement Of Shareholders' Equity
- -------------------------------------------------------------------------------------------

<CAPTION>
Deficit
Capital Accumulated
Number Of Paid In During The
Common Common Excess Of Development
Shares Stock Par Value Stage Total
---------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Balance At February 17, 1993 0 $ 0 $ 0 $ 0 $ 0

Issuance Of Common Stock:
May 1993 for Cash Advances Made
on Behalf of the Company &
Services at $.0002 Per Share * 1,500,000 1,500 (1,200) 300

Net (Loss) (300) (300)
---------- ------- ------- -------- --------
Balance At June 30, 1993 and 1994 1,500,000 1,500 (1,200) (300) 0

Issuance Of Common Stock:
October 1995 for Cash Advances
Made on Behalf of the Company &
Services at $.00006 Per Share * 3,500,000 3,500 (3,290) 0 210

Net (Loss) (210) (210)
---------- ------- ------- -------- --------
Balance At June 30, 1995 5,000,000 $ 5,000 $(4,490) $ (510) $ 0

Expenses Paid By Shareholder's on
Behalf of the Company 10,000 10,000

Net (Loss) (10,000) (10,000)
---------- ------- ------- -------- --------
Balance At June 30, 1997 5,000,000 5,000 5,510 (10,510) 0

Stock Issued for Patent and
Related Costs at $.004 Per Share 12,500,000 12,500 39,144 51,644

Net (Loss) (77,407) (77,407)
---------- ------- ------- -------- --------
Balance At June 30, 1998 17,500,000 $17,500 $44,654 $(87,917) $(25,763)
========== ======= ======= ======== ========

* - Restated See Note 2

<FN>
The Accompanying Notes Are An Integral Part Of These Financial Statements.

</TABLE>
5

<PAGE>
International Fuel Solutions, Inc.
(fka LBF Corporation)
(A Development Stage Company)
Notes to Financial Statements
For The Fiscal Years Ended June 30, 1998 and 1997
- -------------------------------------------------

Note 1 - Organization and Summary of Significant Accounting Policies
- --------------------------------------------------------------------

Organization:

On February 17, 1993, International Fuel Systems, Inc. (fka LBF Corporation)
(the Company) was incorporated under the laws of Nevada to engage in any
lawful business allowed by the State of Nevada. In July 1998 the Company filed
amended articles of incorporation and changed its name to International Fuel
Solutions, Inc.

Development Stage:

The company entered the development stage in accordance with SFAS No. 7 on
February 17, 1993. Its purpose is to evaluate, structure and complete a
merger with, or acquisition of a privately owned corporation or its assets.

Statement of Cash Flows:

For the purpose of the statement of cash flows, the company considers demand
deposits and highly liquid-debt instruments purchased with a maturity of three
months or less to be cash equivalents.

Cash paid for interest in fiscal year ended June 30, 1998 and 1997 was $-0-.
Cash paid for income taxes in fiscal year ended June 30, 1998 and 1997 was
$-0-.

Basic (Loss) per Common Share:

Basic (Loss) per common share is computed by dividing the net loss for the
period by the weighted average number of shares outstanding at June 30, 1998
and 1997.

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. Actual results could differ from those
estimates.

Note 2 - Capital Stock and Capital in Excess of Par Value
- ---------------------------------------------------------

The Company initially authorized 2,500 shares of no par value common stock.
In May 1993, the company issued 300 shares of common stock valued at $300 or
$1.00 per share for services and cash advances paid on behalf of the Company.
In October 1995 the company issued 700 shares of common stock valued at $210
or $.30 per share for services and cash advances paid on behalf of the
Company.

In August 1996 the Company's board of directors and shareholder's authorized
an increase in the Company's authorized stock to 50,000,000 shares of $.001
par value common stock and 25,000,000 shares of $.001 par value preferred
stock with preferences to be determined by the board of directors at the time
of issuance. The Secretary of State of the State of Nevada issued a
Certificate of Amendment to the Articles of Incorporation in September 1997
relative to the increase in the authorized shares of stock.

In August 1997 the board of directors of the Company approved a 500 to 1
forward split making the outstanding common stock equal to 500,000 shares.

On June 19, 1998 the board of directors of the Company approved a 10 to 1
forward split making the outstanding common stock equal to 5,000,000 shares.

On June 19, 1998 the Company purchased the rights to a patent for a "Heat
Exchanger and Fuel Preheater" from an unrelated party in exchange for
12,500,000 shares of its common stock. The transaction was valued at
predecessor cost of $51,644 or $.004 per share.

Note 3 - Related Party Events
- -----------------------------

The Company maintains a mailing address at a shareholder's place of business.
This address is located at Suite 106, 1460 Pandosy Street, Kelowna, British
Columbia V1Y 1P3. At this time the Company has no need for an office other
than to maintain a mailing address. Management has incurred a minimal amount
of time and expense on behalf of the Company.

Certain shareholders of the Company loan money to the Company at various
times during the year when cash is needed. At June 30, 1998 the amount due to
shareholders from advances of expenses paid on behalf of the Company was
$20,338 (See Note 6).

Note 4 - Income Taxes
- ---------------------

The Company follows Financial Accounting Standards Board Statement No. 109,
"Accounting for Income Taxes" (SFAS #109), which requires, among other things,
an asset and liability approach to calculating deferred income taxes. As of
June 30, 1998, the Company has a deferred tax asset of $17,490 primarily for
its net operating loss carryforward which has been fully reserved through a
valuation allowance.

The components of the net deferred tax asset recognized in the accompanying
balance sheet are as follows:

Deferred tax asset $ 17,490
Valuation allowance (17,490)
--------

$ -0-
========

The net change in the valuation allowance for the year ended June 30, 1998 is
$15,388.

The types of temporary differences between the tax basis of assets and their
financial reporting amounts that give rise to a significant portion of the
deferred tax asset are as follows:

Temporary Tax
Difference Effect
---------- -------

Net operating loss carry forward $ 87,450 $17,490
========== =======

The Company's NOL carryforward of approximately $87,450 at June 30, 1998,
which management expects will be fully utilized, will expire in various
amounts between 2006 and 2012.

Note 5 -Patent Application Costs
- --------------------------------

On June 19, 1998 the Company acquired the rights to a Heat Exchanger and Fuel
Preheater invention. All rights to the US Patent application #08/927,108, the
cost incurred through June 19, 1998 for research and development expenditures
of $41,514 and the actual patent fees paid of $10,130 for a total of $51,644.
Research and development expenditures of $44,714 were charged to expense
during the fiscal year ended June 30, 1998. Patent application costs of
$10,130 were capitalized. Patent application fees will continue being
capitalized until the patent is approved and then amortized over a 17 year
period. If the patent is not approved the application costs will be expensed
at that time.

Note 6 - Notes Payable
- ----------------------

Notes Payable consisted of the following:

Note Accrued
Amount Interest
------- --------

L. Smith
Dated: June 25, 1998
Interest at US Prime Plus 1%
Uncollateralized, Due Upon Demand $25,000 $ -0-
======= ========

RD Capital, Inc.
Dated: June 30, 1998
Interest at US Prime Plus 1%
Uncollateralized, Due Upon Demand $20,388 $ -0-
======= ========

Note 7 - Basis of Presentation
- ------------------------------

In the course of its development activities the Company has sustained
continuing losses and expects such losses to continue for the foreseeable
future. The Company's management plans on advancing funds on an as needed
basis and in the longer term, revenues from the operations of a merger
candidate, if found. The Company's ability to continue as a going concern is
dependent on these additional management advances, and, ultimately, upon
achieving profitable operations through the recent asset acquisition.

Note 8 - Subsequent Events
- --------------------------

On July 21, 1998, the Company filed amended articles of incorporation with the
Nevada Secretary of State changing its name to International Fuel Solutions,
Inc.

In October 1998 the Company plans on offering 2,000,000 shares of common stock
for $.50 per share, or $1,000,000 in a private offering under Rule 505 and 506
of Regulation D as well as Regulation S each promulgated under the Securities
Act of 1933 as amended.

<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

None

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

Directors are elected for one-year terms or until the next
annual meeting of shareholders and until their successors are duly
elected and qualified. Officers continue in office at the pleasure
of the Board of Directors.

The Directors and Officers of the Company as of the date of
this report are as follows:

Name Age Position
_______________ ___ _____________________

Devinder Randhawa 38 Chief Executive Officer,
President, Secretary and
Director

Daniel J. Newbold 49 Director

Scott M. Mundell 35 Vice President of
Corporate Development

All Directors of the Company will hold office until the next
annual meeting of the shareholders and until successors have been
elected and qualified. Officers of the Company are elected by the
Board of Directors and hold office until their death or until they
resign or are removed from office.

There are no family relationships among the officers and
directors. There is no arrangement or understanding between the
Company (or any of its directors or officers) and any other person
pursuant to which such person was or is to be selected as a
director or officer.

(b) Resumes:

Devinder Randhawa was appointed as President, Secretary and a
director of the Company in June 1998. In addition to his positions
with the Company, since October 1994, Mr. Randhawa has been
President and principal shareholder of RD Capital, Inc., Kelowna,
British Columbia, Canada, a corporation engaged in corporate
finance activities. Prior, from November 1990 through June 1993,
Mr. Randhawa was employed by Canaccord Capital, Inc., a stock
brokerage company located in Vancouver, British Columbia, where his

<PAGE>
principal responsibilities included providing investment advice.
Mr. Randhawa received a Bachelor of Arts degree with honors from
Trinity Western University in 1983 and also received a Masters
degree in Business Administration from the University of British
Columbia in 1985. He devotes approximately 30 hours per week to
the business of the Company.

Daniel J. Newbold was appointed as a director of the Company
in June 1998. Since 1979, Mr. Newbold has also been President and
general manager of Competition Glass Co., Ltd., Kelowna, British
Columbia, Canada, a glass and glazing business, which he started.
Mr. Newbold devotes only such time as necessary to the business of
the Company.

Scott M. Mundell was appointed as the Company's Vice President
of Corporate Development in June 1998. In addition to his position
with the Company, since October 1994 Mr. Mundell has been owner and
a principal of Halston Communications, inc., Kelowna, British
Columbia, Canada, a company engaged in various businesses including
investor relations and public relations, corporate finance and
management of hospitality and tourism establishments. Prior, from
September 1993 through October 1994, Mr. Mundell was director of
corporate sales for Paradox Distributors, Inc., Kelowna, British
Columbia, Canada, where his responsibilities included public
relations, marketing and sales for telecommunications products and
software. Mr. Mundell received a marketing degree from C.I.T.
Technical Institute in 1983. He devotes approximately 40 hours per
week to the business of the Company.

ITEM 9B. COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers, directors and person who own more than 10%
of the Company's Common Stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission.
All of the aforesaid persons are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they
file.

Based solely on review of the copies of such forms furnished
to the Company, the Company believes that the Form 5 annual reports
of the Company's officers, directors and holders of 10% or more of
the outstanding shares of the Company, which are required to be
filed within 45 days after the end of the Company's fiscal year,
were not timely filed, but were filed late. However, these reports
reflected no changes in the securities holdings of any person.

<PAGE>
ITEM 10. EXECUTIVE COMPENSATION.

Remuneration

The following table reflects all forms of compensation for
services to the Company for the fiscal years ended June 30, 1997
and 1998 of the Chief Executive Officer of the Company.

<TABLE>
SUMMARY COMPENSATION TABLE

<CAPTION>
Long Term Compensation
____________________________

Annual Compensation Awards Payouts
_____________________ ____________________ _______
Securities
Other Under- All
Name Annual Restricted lying Other
and Compen- Stock Options/ LTIP Compen-
Principal Salary Bonus sation Award(s) SARs Payouts sation
Position Year ($) ($) ($) ($) (#) ($) ($)
__________ ____ ______ _____ ______ ________ _______ _______ ______
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David Ward 1997 $ 0 $ 0 $ 0 $ 0 0 $ 0 $ 0
President &
Director(1)

Devinder(1)
Randhawa,
President 1998 $ 0 $ 0 $ 0 $ 0 0 $ 0 $ 0
_________________________

<FN>
(1) None of the Company's officers and/or directors receive any
compensation for their respective services rendered unto the
Company, nor have they received such compensation in the past.
They all have agreed to act without compensation until authorized
by the Board of Directors, which is not expected to occur until the
Company has generated revenues from operations

</TABLE>

The Company maintains a policy whereby the directors of the
Company may be compensated for out of pocket expenses incurred by
each of them in the performance of their relevant duties. The
Company did not reimburse ant director for out of pocket expenses
during the fiscal years ended June 30, 1997 and 1998.

In addition to the cash compensation set forth above, the
Company intends to reimburse each executive officer for expenses
incurred on behalf of the Company on an out of pocket basis. The
Company cannot determine, without undue expense, the exact amount
of such expense reimbursement. However, the Company believes that

<PAGE>
such reimbursements did not exceed, in the aggregate, $10,000
during the fiscal years ended June 30, 1997 and 1998.

None of the Company's officers or directors serves pursuant to
any employment agreement and it is not anticipated that the Company
will offer such an agreement to any present officer or director in
the immediate future.

Stock Plan

There are no bonus or incentive plans in effect, nor are there
any understandings in place concerning additional compensation to
the Company's officers and/or directors.

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

(a) and (b) Security Ownership of Certain Beneficial Owners
and Management.

The table below lists the beneficial ownership of the
Company's voting securities by each person known by the Company to
be the beneficial owner of more than 5% of such securities, as well
as by all directors and officers of the Company. Unless otherwise
indicated, the shareholders listed possess sole voting and
investment power with respect to the shares shown.

Name and Amount and
Address of Nature of
Title of Beneficial Beneficial Percent of
Class Owner Ownership Class

Common FES Innovations, Inc. 10,500,000 60.0%
303-478 Bernard Avenue
Kelowna, B.C. V1Y 6N5

Common Devinder Randhawa(1)(2) 1,925,000 11.0%
106-1460 Pandosy Street
Kelowna, B.C. V1Y 1P3

Common Robert Hemmerling 1,520,000 8.7%
106-1460 Pandosy Street
Kelowna, B.C. V1Y 1P3

Common David Ward 1,520,000 8.7%
4531 Granville Avenue
Richmond, B.C.

Common All Officers & 1,925,000 11.0%
Directors as a Group
(1 person)

<PAGE>
____________________

(1) Officer and director of the Company as of the date of this
report.

(2) These shares are held under the name of RD Capital, Inc., a
British Columbia corporation. Mr. Randhawa is the principal
owner of RD Capital. The information relating to beneficial
ownership of the Company's Common Stock by its nominees and
other directors is based on information furnished by them
using the definition of "beneficial ownership" set forth in
rules promulgated by the Securities and Exchange Commission
under Section 13(d) of the Securities Exchange Act of 1934.
Except where there may be special relationships with other
persons, including shares voting or investment power, the
directors and nominees possess sole voting and investment
power with respect to the shares set forth beside their names.

The balance of the Company's outstanding Common Shares are
held by 12 persons, not including those persons who hold their
shares in "street name."

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Effective June 19, 1998, the Company acquired certain patent
application rights from FES Innovations, Inc., a British Columbia,
Canada corporation ("FES"), who became a principal shareholder of
the Company as a result of the aforesaid transaction. The relevant
terms of the transaction provided, among other things, for the
Company to issue to FES and its assigns an aggregate of 12,500,000
"restricted" common shares (post split), representing approximately
71.4% of the Company's outstanding common stock. The terms of this
transaction were negotiated on an "arms length" basis between
management and FES.

Additionally since inception of the Company, RD Capital, Inc.,
a corporation owned and controlled by Devinder Randhawa, President,
Secretary and a director of the Company, has loaned monies to the
Company in order to allow the Company to pay its accounts. As of
the date of this report, the Company owes an aggregate of $20,388
applicable thereto. These loans were made pursuant to verbal
agreements between the Company and Mr. Randhawa and are due upon
demand. Interest on these loans accrues at the rate of prime plus
1% per annum. The Company believes that the terms of these loans
are more favorable to the Company than would have been available to
the Company through more established financial institutions.

<PAGE>
PART IV

Item 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits

3.3 Certificate of Amendment of Articles of
Incorporation

27 Financial Data Schedule

The following Exhibits were filed with the Securities and
Exchange Commission in the Exhibits to Form 10-SB, filed on
December 2, 1997 and are incorporated by reference herein:

3.1 Certificate and Articles of Incorporation and Amendments
thereto.

3.2 Bylaws

The following exhibits were filed with the SEC in the Exhibits
to the Company's Form 8-K dated June 25, 1998 and are incorporated
by reference herein:

2.0 Purchase and Sale Agreement Between the Company and FES
Innovations, Inc.

(b) Reports on Form 8-K

The Company filed three reports on Form 8-K with the SEC
during the last fiscal quarter ending June 30, 1998, including (i)
a report dated June 5, 1998, and amendment thereto dated June 12,
1998, advising of the execution of a letter of intent and an
amendment thereto between the Company and FES; and (ii) a report
dated June 25, 1998, advising of the execution of various documents
relating to the acquisition of the Assets.

<PAGE>
SIGNATURES

In accordance with Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on
October 13, 1998.

INTERNATIONAL FUEL SOLUTIONS, INC.
(Registrant)

By: s/Devinder Randhawa
--------------------------------
Devinder Randhawa,
President and Secretary

In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant
and in the capacities indicated on October 13, 1998.

s/Devinder Randhawa
- -------------------------------
Devinder Randhawa, President,
Secretary & Director

s/Dan Newbold
- -------------------------------
Dan Newbold, Director

<PAGE>
INTERNATIONAL FUEL SOLUTIONS, INC.

Exhibit Index to Annual Report on Form 10-KSB
For the Fiscal Year Ended June 30, 1998

EXHIBITS Page No.

EX-3.3 Certificate of Amendment of Articles
of Incorporation . . . . . . . . . . . . . 35

EX-27 Financial Data Schedule . . . . . . . . . . 37

<PAGE>
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
FILED (After Issuance of Stock)
In the Office of the
Secretary of State of the
STATE OF NEVADA
JUL 12 1998
No. C1569-93
--------------
Dean Heller, Secretary of State
LBF CORPORATION
---------------------------------------------

We, the undersigned David Ward and
-------------------------------------------------
Robert Hemmerling of LBF Corporation
- --------------------------------------- ------------------------------------
Name of Corporation
do hereby certify:

That the Board of Directors of said corporation at a meeting duly

convened, held on the 30th day of June 19 98 , adopted a resolution
-------- ----------- ----
to amend the original articles as follows:

Article I is hereby amended to read as follows:
----
The name of the corporation is:

International Fuel Solutions, Inc.

The number of shares of the corporation outstanding and entitled to vote
on an amendment to the Articles of Incorporation is 17,500,000 ; that the said
-----------
change(s) and amendment have been consented to and approved by a majority vote
of the stockholders holding at least a majority of each class of stock
outstanding and entitled to vote thereon.

LBF CORPORATION

s/David Ward
------------------------------------
President or Vice President
David Ward
s/Robert Hemmerling
------------------------------------
Secretary or Assistant Secretary
Robert Hemmerling
xxxxxx Province of British )
-------------------- )
Columbia, Canada : ss.
xxxxxx City of Vancouver )
--------------------
On July 16, 1998 , personally appeared before me, a Notary
---------------------------
Public, David Ward , who acknowledged
---------------------------------------------------
that they executed the above instrument.

s/Fred Ngan
------------------------------------
Signature of Notary
FRED NGAN
Notary Public
(Notary Stamp or Seal) #22 - 5729 West Boulevard
Vancouver, B.C. V6M 3W8
Tel: (604) 264-8899
(As to the signature of David Ward only)

<PAGE>
PROVINCE OF BRITISH COLUMBIA )
: ss.
CITY OF Kelowna )
---------------------
On July 06, 1998 , personally appeared before me, a Notary
---------------------------
Public/Commissioner of Oaths, Robert Hemmerling , who acknowledged
-------------------------------
that they executed the above instrument.

s/Joe Gordon
------------------------------------
Notary Public or Commissioner of Oaths
(Notary Stamp or Seal)

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 1998, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 20,150
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 30,280
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 30,280
<CURRENT-LIABILITIES> 56,043
<BONDS> 0
0
0
<COMMON> 17,500
<OTHER-SE> (43,263)
<TOTAL-LIABILITY-AND-EQUITY> 30,280
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 77,407
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (77,407)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (77,407)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> 0

</TABLE>