GROWTEX INC, S-1/A, 1999-09-22

GROWTEX INC
S-1/A, 1999-09-22
AGRICULTURAL PROD-LIVESTOCK & ANIMAL SPECIALTIES

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As filed with the Securities and Exchange Commission on September 22, 1999

Registration no. 333-82633
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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Amendment No. 1

To
FORM S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933

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GROWTEX INC.
(Exact name of registrant as specified in its charter)

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<TABLE>
<S> <C> <C>
Nevada 0273 76-0602955
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
1177 West Hastings, Suite 2110
Vancouver, British Columbia V6E 2K3, CANADA
(604) 687-2199
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

<TABLE>
<S> <C>
Agent for Service: With a Copy to:
MICHAEL KIRSH, President JAMES L. VANDEBERG
Growtex Inc. Vandeberg Johnson & Gandara
1177 West Hastings, Suite 2110 600 University Street, Suite 2424
Vancouver, British Columbia V6E 2K3, CANADA Seattle, Washington 98101
(604) 687-2199 (206) 386-8080
</TABLE>
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]__________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]__________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]__________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
Proposed Proposed
Amount maximum maximum
Title of each class of to be offering price aggregate Amount of
securities to be registered registered per unit offering price registration fee
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<S> <C> <C> <C> <C>
Common stock.................... 2,500,000 shares $0.05 per share(1) $125,000.00 $34.75(2)
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</TABLE>
(1) No exchange or over-the-counter market exists for Growtex's common stock.
The most recent sale of Growtex's common stock from one investor to
another occurred on May 11, 1999 at a price of $0.047 per share. Growtex
believes this transaction supports a bona fide estimate of $0.05 per share
as the maximum offering price solely for the purpose of calculating the
amount of the registration fee pursuant to Rule 457(a) under the
Securities Act of 1933.
(2) Previously paid.
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The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to such section 8(a), may determine.

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<PAGE>

SUBJECT TO COMPLETION--September 22, 1999

PROSPECTUS

, 1999

GROWTEX INC.

1177 West Hastings, Suite 2110
Vancouver, British Columbia V6E 2K3, CANADA
(604) 687-2199

2,500,000 Shares of Common Stock
to be sold by current shareholders

This is the initial public offering of common stock of Growtex Inc., and no
public market currently exists for shares of Growtex's common stock. This
prospectus is part of a registration statement that permits selling
shareholders to sell their shares on a continuous or delayed basis in the
future. Selling shareholders will determine the price for the stock as the
market develops. The most recent sale of Growtex's common stock from one
investor to another occurred on May 11, 1999 at a price of $0.047 per share.
Growtex has no revenues to date and there may not be a market for the only
product it plans to sell.

This is not an underwritten offering, and Growtex's stock is not listed on
any national securities exchange or the Nasdaq Stock Market. Growtex intends to
apply to have its shares traded on the OTC bulletin board under the symbol:

"GWTX"

THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 1.

Neither the SEC nor any state securities commission has approved or
disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.

We will amend and complete the information in this prospectus. The information
in this prospectus is not complete and may be changed. We may not sell these
securities until the registration statement filed with the Securities and
Exchange Commission is effective. This prospectus is not an a offer to sell
these securities and it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.
<PAGE>

You should rely only on the information contained in this document. Growtex
has not authorized anyone to provide you with information that is different.
This document may only be used where it is legal to sell these securities. The
information in this document may only be accurate on the date of this document.

TABLE OF CONTENTS

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Page
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<S> <C>
Risk Factors.......................................................... 1
Use of Proceeds....................................................... 7
Determination of Offering Price....................................... 7
Dilution.............................................................. 7
Selling Shareholders.................................................. 7
Plan of Distribution.................................................. 8
Description of Capital Stock.......................................... 8
Interests of Named Experts and Counsel................................ 8
Description of Business............................................... 9
Description of Property............................................... 12
Legal Proceedings..................................................... 12
Market Price of and Dividends on Capital Stock and Related Stockholder
Matters.............................................................. 13
Selected Financial Data............................................... 13
Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................ 14
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure................................................. 15
Directors and Executive Officers...................................... 16
Executive Compensation................................................ 16
Security Ownership of Certain Beneficial Owners and Management........ 17
Certain Relationships and Related Transactions........................ 18
Disclosure of Commission Position on Indemnification for Securities
Act Liabilities...................................................... 18
Index to Financial Statements......................................... F-1
</TABLE>

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RISK FACTORS

You should carefully consider the following risk factors and all other
information contained in this prospectus before purchasing the common stock of
Growtex Inc. ("Growtex"). Investing in Growtex's common stock involves a high
degree of risk. Any of the following risks could adversely affect Growtex's
business, financial condition and results of operations and could result in a
complete loss of your investment.

Application of Biocatalyst Technology to Fish Farming and Aquarium Uses May
Not Be Feasible

Growtex was formed in April of 1999 for the purpose of exploiting a new
technology into an unproven practical and viable business in aquatic systems.
In a license agreement with David R. Mortenson & Associates ("Mortenson"),
Growtex acquired the rights to distribute and produce Biocatalyst, an oxygen-
enriched water product, for fish farming and aquarium uses. Any failure to
establish the technical and economic feasibility of the fish farming or
aquarium applications would prevent Growtex from implementing its business
plan, and could cause its stock to be worthless.

Growtex anticipates that Biocatalyst would be supplied to the fish farming
and aquarium systems using an on-site generator or generators. No generator
has been successfully installed and operated at any fish farming system (or at
any large aquarium), even on a test basis. No credible scientific study has
been undertaken to document and quantify the benefits of bottled Biocatalyst
to small private aquarium displays. The initial step that Growtex plans to
take in conjunction with Mortenson and other licensees is to identify a fish
farming system proprietor interested in participating in a trial. Growtex may
not be successful in locating a fish farming system proprietor willing to test
the technology. Growtex may be unable to reach an agreement with other
licensees regarding collaboration and sharing of expenses. Even if a trial is
conducted, adapting Biocatalyst to fish farming and aquarium uses may not
prove to be either technically or economically feasible.

Growtex May Lose Its Biocatalyst License If It Fails to Meet Its Minimum
Purchase Requirements

Growtex currently does not have funds to meet the minimum purchase
requirements under its license with Mortenson and may be unable to meet the
minimum purchase requirements by their respective deadlines. Growtex has the
exclusive right to distribute and market Biocatalyst under a private label in
Mexico for a period of three years, expiring April 5, 2002. Growtex is
required to purchase $125,000 of Biocatalyst by April 5, 2000, and a further
$175,000 by April 5, 2001, to retain its license. The current price for
Biocatalyst is $2.00 per gallon; Mortenson may change the price on 10 days'
notice. Growtex currently has no prospective purchasers lined up, and does not
yet know if adapting Biocatalyst to fish farming and aquarium uses will even
be feasible. Growtex does not intend to meet its minimum purchase requirement
simply by stockpiling an inventory of Biocatalyst. If Growtex does not meet
its minimum purchase requirement and does not exercise its right to become a
producer of Biocatalyst, Growtex may be deemed to be in default under its
license agreement with Mortenson. Mortenson would then be able to terminate
Growtex's license rights to Biocatalyst. Loss of its license could prevent
Growtex from implementing its business plan, and could cause its stock to be
worthless.

Growtex May Lose Its Biocatalyst License If It Does Not Exercise Its Right to
Become a Producer

If Growtex meets certain requirements, it has the right to become a producer
of Biocatalyst. However, it may not be feasible for Growtex to obtain a
producer license, and failure to obtain a producer license may limit Growtex's
ability to implement its business plan to distribute Biocatalyst, and could
cause its stock to be worthless. Should the Biocatalyst application prove
feasible, it is imperative that Growtex become a producer. Without a producer
license, Growtex must continue to purchase Biocatalyst from Mortenson at
marked up distribution rates. In order to produce Biocatalyst itself, Growtex
must have access to Biomas, a product necessary to producing Biocatalyst,
which requires a producer license and a generator. With a producer license,
Growtex can produce Biocatalyst on clients' premises with the installation of
a generator. To become a producer, Growtex either would have to purchase a
minimum of 5,000 gallons of Biocatalyst per month for a minimum
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period of six consecutive months (which is highly unlikely), or it would have
to demonstrate its financial capability, pay Mortenson a one-time fee of
$25,000, an additional one-time payment of $10,000 to reimburse unspecified
expenses, and pay minimum annual royalties of $20,000. Growtex's business plan
will likely require it to become a producer, because any fish farming client
would probably need a Biocatalyst generator installed on its premises. There
is no guarantee that fish farming system proprietors, the primary target
market, will conclude that Biocatalyst's health, size and growth rate benefits
are worth the price Growtex would have to charge to make money producing and
selling Biocatalyst. Even if Growtex obtains a producer license, it may be
unable make the minimum royalty payments. Although the final terms of the
right to produce are subject to future negotiation, presumably the failure to
pay minimum royalties would be a default that would allow Mortenson to
terminate the production license. Any termination of a producer license would
severely limit Growtex's ability to implement its license, and could cause its
stock to be worthless.

Growtex May Lose Its Biocatalyst License If Mortenson Defaults Under Its
Agreement with N.W. Technologies

Mortenson granted the Biocatalyst license to Growtex based on an agreement
Mortenson has with N.W. Technologies, Inc., the owner of the Biocatalyst
technology. If Mortenson defaults under its agreement with N.W. Technologies,
it could lose its Biocatalyst rights, and the rights Mortenson has granted
Growtex would become meaningless. Similarly, any dispute between Mortenson and
N.W. Technologies (or their successors) could impair Growtex's ability to
fully exploit its license rights. Any termination or impairment of Growtex's
license rights due to circumstances under the control of Mortenson, N.W.
Technologies or others with an interest in the Biocatalyst technology could
prevent Growtex from implementing its business plan, thereby limiting its
profitably and decreasing the value of its stock.

Increases in Biocatalyst Prices Could Destroy Growtex's Profitability

There can be no guarantee that Growtex ever will be profitable. If Growtex
does become profitable, Mortenson has the right to increase Biocatalyst prices
on 10 days notice by revising its published pricing schedule. If Growtex
becomes a producer of Biocatalyst, the final terms governing pricing of raw
materials will be subject to future negotiation. Assuming Mortenson retains
the right to set prices for Biocatalyst and the raw materials necessary to
produce Biocatalyst, Mortenson could raise prices to its licensees. Any
material price increases could decrease or eliminate Growtex's profitability.

Competitors Could Develop Alternative and More Cost-Effective Products to
Permit the Release of Additional Oxygen into Fish Farming and Aquarium
Systems

It is possible that an unknown competitor may have or develop a product that
could achieve results similar to or better than Biocatalyst. Any development
of a competing product could limit the marketability of Biocatalyst, thereby
limiting or eliminating the profitability of Growtex's business. Growtex is
aware that pumping systems currently exist for injecting oxygen into fish
farming systems, and that aquariums generally have a filtration system that
includes an oxygen pump to inject oxygen into the aquarium. Another company
could develop a product similar to Biocatalyst that would permit the release
of additional oxygen into fish farming and aquarium systems. Growtex may have
to compete with such companies in the future if it succeeds in establishing
the feasibility of adapting Biocatalyst to fish farming and aquarium uses.

Government Regulation Could Adversely Affect Viability of Biocatalyst
Application

Fish farming and large public aquarium systems may be subject to regulation
by Mexico's local, state and federal environmental agencies. Due to its
inexperience in Mexico, Growtex does not know whether there are any such
regulations which may affect its ability to market its product for certain
applications or in certain geographic areas. There can be no assurance that
such regulations or licensing do not exist or will not be adopted in the
future. Any such regulations or licensing could prove to be burdensome, and
impose significant additional

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costs on Growtex's business or subject Growtex to additional liabilities,
affecting the profitability and perhaps the viability of Growtex's business
plan.

Heavy Dependence on One Individual Who Will Not Devote His Full Time and
Attention to Growtex's Affairs Could Result in Delays or Business Failure

Michael Kirsh is serving as Growtex's sole officer and director. Loss of Mr.
Kirsh's services may hamper Growtex's ability to implement its business plan,
and could cause its stock to be worthless. Mr. Kirsh devotes approximately 25
hours per week to Growtex's business. He also operates an investment company,
and is the sole officer and director of Gentry Resources, Inc., a company
which distributes Biocatalyst for waste remediation applications but which
does not compete with Growtex. Growtex will be heavily dependent upon Mr.
Kirsh's entrepreneurial skills and experience to implement its business plan
and may, from time to time, find that his inability to devote full time and
attention to Growtex's affairs will result in delay(s) in progress towards the
implementation of its business plan or in a failure to implement its business
plan. Moreover, Growtex does not have an employment agreement with Mr. Kirsh
and as a result, there is no assurance that he will continue to manage
Growtex's affairs in the future. If Growtex loses the services of Mr. Kirsh,
or if he should decide to join a competitor or otherwise compete directly or
indirectly with Growtex, this could have a significant adverse effect on
Growtex's business and could cause the price of its stock to be worthless. The
services of Mr. Kirsh would be difficult to replace. Because investors will
not necessarily be able to evaluate the merits of Growtex's business
decisions, they should carefully and critically assess Mr. Kirsh's background.
See "Directors and Executive Officers".

Growtex Has No Experience Conducting Business in Mexico

Mr. Kirsh has no experience conducting business in Mexico. Growtex may face
unknown legal, cultural and administrative obstacles unique to Mexico. As a
result, Growtex will likely need to rely on others, including local
professionals, who understand how to conduct business in Mexico. Because of
its lack of experience in operating in a foreign market, Growtex may
overestimate the marketability of Biocatalyst and it may underestimate the
costs and difficulties associated with doing business in Mexico. Any
unanticipated costs or difficulties arising out of the unique circumstances
posed by operating in Mexico could prevent Growtex from implementing its
business plan, thereby limiting its profitability and decreasing the value of
its stock.

Year 2000 Issues Could Result in Sales or Inventory Difficulties

There is also risk due to Year 2000 issues. These issues arise because many
computerized systems use two digits rather than four digits to identify a
year. Date-sensitive systems may recognize the year 2000 as 1900 or some other
date, resulting in errors when information using the year 2000 date is
processed. In addition, similar problems may arise in some systems which use
certain dates in 1999 to represent something other than a date. The effects of
the Year 2000 issue may be experienced before, on, or after January 1, 2000,
and, if not addressed, the impact on operations and financial reporting may
range from minor errors to significant systems failure which could affect an
entity's ability to conduct normal business operations. It is not possible to
be certain that all aspects of the Year 2000 Issue affecting Growtex,
including those related to the efforts of customers, suppliers, or other third
parties, will be fully resolved. It is possible that one of Growtex's
suppliers, such as a utility or the producer of Biocatalyst or Biomas, or one
of Growtex's clients may become inoperative, and cause Growtex to incur heavy
expenses or losses. At present, due to Growtex's developmental stage, it has
no critical systems that it must test for Year 2000 compliance. However,
Growtex cannot be certain that it will not experience unanticipated negative
consequences from Year 2000 problems, or that it will be able to make any such
modifications as may become necessary in a timely, cost-effective and
successful manner, and the failure to do so could interfere with Growtex's
ability to do business.

Growtex Has No Operating History and Financial Results Are Uncertain

Growtex is a relatively young company with no history of earnings or profit
and there is no assurance that it will operate profitably in the future.
Growtex faces all the risks of a new business. As a result of Growtex's

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limited operating history, it is difficult to accurately forecast its
potential revenue, and there is no meaningful historical financial data upon
which to base planned operating expenses. Its revenue and income potential is
unproven and its business model is still emerging. As such, there is no
assurance that Growtex will provide a return on investment in the future.

An investor in Growtex's common stock must consider the risks and
difficulties frequently encountered by early stage companies in new and
rapidly evolving markets. Growtex's ability to achieve and then sustain
favorable operating results will depend on a number of factors, including
costs related to:

1) identifying a fish farming system to test the Biocatalyst application;

2) testing the Biocatalyst application;

3) identifying and marketing to prospective purchasers;

4) purchasing the amounts of Biocatalyst or Biomas necessary for
operation and required by the license agreement, and increases in the cost
of product;

5) licensing and royalty fees;

6) loss of licensing rights;

7) evaluation and expense of entering into a new business opportunity;

8) the expense of delays in introducing or making any necessary
improvements to the Biocatalyst application; and

9) general economic conditions, as well as those specific to the related
industries.

Growtex May Be Unable to Continue As A Going Concern

In its Independent Auditor's Report, Growtex's accountants state that
Growtex's failure to generate revenues and conduct operations since its
inception raise substantial doubt about Growtex's ability to continue as a
going concern. Growtex will require substantial working capital, and currently
has inadequate capital to fund its business. Growtex may be unable to raise
the funds necessary for implementing its business plan, which could severely
limit its operations and cause its stock to be worthless.

Growtex expects its operating expenses will significantly increase due to
testing, marketing, distributing and producing Biocatalyst. Initially, Growtex
will need sufficient funds to locate a test facility and conduct the necessary
testing. Growtex cannot commence operations until a generator has been
successfully installed and operated on a test basis at a fish farming system
or large aquarium. As a result, it will need to generate significant revenue
and/or raise additional funds to achieve profitability. Growtex will be unable
to pay its operating expenses prior to achieving profitability unless it can
raise the funds necessary to do the feasibility testing and market the product
Biocatalyst. If Growtex does not become profitable, it may be unable to
maintain its Biocatalyst license, which could cause its stock to be worthless.

If Growtex does achieve profitability, it cannot be certain that it will
sustain or increase it.

Growtex May Need Additional Financing Which May Not Be Available

Growtex's ultimate success will depend on its ability to raise additional
capital. Growtex's only resources have come from the private sale of Growtex's
stock. No commitments to provide additional funds have been made by management
or other shareholders. Growtex has not investigated the availability, source
or terms that might govern the acquisition of additional financing. There is
no assurance that funds will be available from any source or, if available,
that they can be obtained on terms acceptable to Growtex. If not available,
Growtex's operations would be severely limited, and it would be unable to
implement its business plan.

Growtex may raise additional funds through the issuance of equity, equity-
related or convertible debt securities. These securities may have rights,
preferences or privileges senior to those of the rights of its common stock,
and the ownership interest of its stockholders may be diluted.

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Potential Business Combinations Dilute Stockholder Value

Because Growtex has a limited time to develop a highly speculative and
unproven technology, Growtex's management will spend a significant portion of
the time it devotes to Growtex evaluating other business opportunities that
may be available to Growtex. In the event of a business combination, the
ownership interests of holders of existing shares of Growtex stock will be
diluted. Due to its limited financial resources, the only way Growtex will be
able to diversify its activities to provide a hedge, should its business plan
prove to be impractical, would be to enter in to a business combination.
Growtex has had discussions with a number of third parties regarding business
opportunities, but none of these discussions has reached the stage where an
agreement in principle is imminent. In any business opportunity reviewed by
Growtex thus far, significant business and economic issues would have to be
resolved in order to reach an agreement.

Any asset acquisition or business combination would likely include the
issuance of a significant amount of Growtex's common stock, which would dilute
the ownership interest of holders of existing shares of Growtex's common
stock, and may result in a majority of the voting power being transferred to
new investors. Depending on the nature of the transaction, Growtex's
stockholders may not have an opportunity to vote on whether to approve it. For
example, Growtex's board of directors may decide to issue a significant amount
of stock to effect a share exchange with another company. Such a transaction
does not require shareholder approval, but in approving any such transaction
Growtex's officers and directors must exercise their powers in good faith and
with a view to the interests of the corporation.

Potential Business Combinations Could Be Difficult To Integrate and Disrupt
Business

Any acquisition of or business combination with another company could
disrupt Growtex's ongoing business, distract management and employees and
increase its expenses. If Growtex acquires a company, it could face
difficulties in assimilating that company's personnel and operations. In
addition, the key personnel of the acquired company may decide not to work for
Growtex. Acquisitions also involve the need for integration into existing
administration, services, marketing, and support efforts. Any amortization of
goodwill or other assets, or other charges resulting from the costs of these
acquisitions, could limit Growtex's profitability and decrease the value of
its stock. In addition, Growtex's liquidity and capital resources may be
diminished prior to or as a result of consummation of a business combination
and its capital may be further depleted by the operating losses (if any) of
the business entity which Growtex may eventually acquire.

Growtex May Enter In To New Line of Business Which Investors Could Not
Evaluate

In the event of a business combination, acquisition, or change in
shareholder control, Growtex may enter in to a new line of business which an
investor did not anticipate and in which that investor may not want to
participate. Growtex may make investments in or acquire complementary
products, technologies and businesses, or businesses completely unrelated to
Growtex's current business plan. Similarly, an asset acquisition or business
combination would likely include the issuance of a significant amount of
Growtex's common stock, which may result in a majority of the voting power
being transferred to new investors. New investors may replace Growtex's
management. New management may decide not to continue to implement Growtex's
current business plan, and may decide to enter into a business completely
unrelated to Growtex's current business plan which an investor did not
anticipate and in which that investor may not want to participate. In such
case, an investor could not only lose its entire investment, but could lose
its entire investment on a business decision it did not get to evaluate at the
time of investing in Growtex.

Growtex Common Stock Has No Prior Market, And Prices May Decline After The
Offering

There is no public market for Growtex's common stock and no assurance can be
given that a market will develop or that any shareholder will be able to
liquidate his investment without considerable delay, if at all. The trading
market price of Growtex's common stock may decline below the offering price.
If a market should develop, the price may be highly volatile. In addition, an
active public market for Growtex's common stock may not develop or be
sustained. If Growtex's selling stockholders sell substantial amounts of
common stock in the

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public market, the market price of Growtex's common stock could fall. Factors
such as those discussed in this "Risk Factors" section may have a significant
impact on the market price of Growtex's securities. Owing to the low price of
the securities many brokerage firms may not be willing to effect transactions
in the securities. Even if a purchaser finds a broker willing to effect a
transaction in Growtex's common stock, the combination of brokerage
commissions, state transfer taxes, if any, and other selling costs may exceed
the selling price. Further, many lending institutions will not permit the use
of such securities as collateral for loans. Thus, a purchaser may be unable to
sell or otherwise realize the value invested in Growtex stock.

Investors May Face Significant Restrictions on the Resale of Growtex Stock
Due to State Blue Sky Laws

Because Growtex's securities have not been registered for resale under the
blue sky laws of any state, the holders of such shares and those persons
desiring to purchase them in any trading market that may develop in the future
should be aware that there may be significant state blue sky law restrictions
on the ability of investors to sell and on purchasers to buy Growtex's
securities. Each state has its own securities laws, often called "blue sky
laws", which limit sales of stock to a state's residents unless the stock is
registered in that state or qualifies for an exemption from registration.
These laws also govern the reporting requirements for broker-dealers and stock
brokers doing business directly or indirectly in the state. Before a security
is sold in a state, there must be a registration in place to cover the
transaction, and the broker must be registered in that state, or otherwise be
exempt from registration. Growtex does not know whether its stock will be
registered under the laws of any states. A determination regarding
registration will be made by the broker-dealers, if any, who agree to serve as
the market-makers for Growtex's stock. Accordingly, investors should consider
the secondary market for Growtex's securities to be a limited one. Investors
may be unable to resell their stock, or may be unable to resell it without the
significant expense of state registration or qualification.

Investors May Face Significant Restrictions on the Resale of Growtex Stock
Due To Federal Laws and Regulations.

The Securities and Exchange Commission has adopted a number of rules to
regulate "penny stocks." Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3,
15g-4, 15g-5, 15g-6 and 15g-7 under the Securities and Exchange Act of 1934,
as amended. The Securities and Exchange Commission has advised Growtex that
its securities constitute "penny stock" within the meaning of the rules, and
therefore these rules apply to Growtex and its securities. The rules may
further affect the ability of owners of Growtex's shares to sell their
securities in any market that may develop for them.

Shareholders should be aware that, according to the Securities and Exchange
Commission Release No. 34-29093, the market for penny stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include

. control of the market for the security by one or a few broker-dealers
that are often related to the promoter or issuer;

. manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases;

. "boiler room" practices involving high pressure sales tactics and
unrealistic price projections by inexperienced sales persons;

. excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and

. the wholesale dumping of the same securities by promoters and broker-
dealers after prices have been manipulated to a desired level, along
with the inevitable collapse of those prices with consequent investor
losses.

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USE OF PROCEEDS

This prospectus is part of a registration statement that permits selling
shareholders to sell their shares on a continuous or delayed basis in the
future. Because this prospectus is solely for the purpose of selling
shareholders, Growtex will not receive any proceeds from the sale of stock
being offered.

DETERMINATION OF OFFERING PRICE

This offering is solely for the purpose of allowing Growtex's shareholders
to sell their stock. The selling shareholders may sell their shares when the
registration statement becomes effective, or they may elect to sell some or
all of their shares at a later date. As the market develops, the selling
shareholders will determine the price for the stock.

DILUTION

This offering is for sales of stock by existing Growtex shareholders on a
continuous or delayed basis in the future. Sales of common stock by
shareholders will not result in any substantial change to the net tangible
book value per share before and after the distribution of shares by the
selling shareholders. There will be no change in net tangible book value per
share attributable to cash payments made by purchasers of the shares being
offered. Prospective investors should be aware, however, that the price of
Growtex's shares may not bear any rational relationship to net tangible book
value per share.

SELLING SHAREHOLDERS

The following are the shareholders for whose accounts the shares are being
offered; the amount of securities owned by such shareholder prior to this
offering; the amount to be offered for such shareholder's account; and the
amount to be owned by such shareholder following completion of the offering:

<TABLE>
<CAPTION>
Number of
Number of Number of Shares After
Name Position with Company Shares Owned Shares Offered Sale(1)
---- --------------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
Michael Kirsh........... President, Secretary,
Treasurer, Director 700,000 700,000 0
David Goldman........... None 200,000 200,000 0
Peter Finck............. None 200,000 200,000 0
Michael Robison......... None 200,000 200,000 0
Brian Gruson............ None 200,000 200,000 0
Brent Lokash............ None 200,000 200,000 0
Mark R. Epstein Law
Corp................... None 200,000 200,000 0
John Trotter............ None 200,000 200,000 0
KM Lifestyle Enterprise
Inc.................... None 200,000 200,000 0
Plantation Capital
Corp. ................. None 200,000 200,000 0
</TABLE>
- --------
(1) This table assumes that each shareholder will sell all of its shares
available for sale during the effectiveness of the registration statement
that includes this prospectus. Shareholders are not required to sell their
shares. See "Plan of Distribution."

7
<PAGE>

PLAN OF DISTRIBUTION

This is not an underwritten offering. This prospectus is part of a
registration statement that permits selling shareholders to sell their shares
on a continuous or delayed basis in the future. Selling shareholders may sell
their shares to the public when the registration statement becomes effective,
or they may elect to sell some or all of their shares at a later date. Growtex
has not committed to keep the registration statement effective for any set
period of time.

While the registration statement is effective, selling shareholders may sell
their shares directly to the public, without the aid of a broker or dealer, or
they may sell their shares through a broker or dealer if Growtex's stock is
authorized for inclusion on the OTC bulletin board. Any commission, fee or
other compensation of a broker or dealer would depend on the brokers or
dealers involved in the transaction. The selling shareholders and any
participating broker-dealers may be deemed to be "underwriters" within the
definition of Section 2(11) of the Securities Act of 1933, and any
compensation received by these persons on resale may be deemed "underwriting
compensation."

No public market currently exists for shares of Growtex's common stock.
Growtex intends to apply to have its shares traded on the OTC bulletin board
under the symbol "GWTX".

DESCRIPTION OF CAPITAL STOCK

The following description of Growtex's capital stock is a summary of the
material terms of Growtex's capital stock and does not purport to be complete.
This summary is subject to and qualified in its entirety by Growtex's articles
of incorporation and bylaws, which are included as exhibits to the
registration statement of which this prospectus forms a part, and by the
applicable provisions of Nevada law.

Growtex's authorized capital consists of 25,000,000 shares of common stock,
par value $.001 per share. Immediately prior to this offering, 2,500,000
shares were issued and outstanding. Each record holder of common stock is
entitled to one vote for each share held on all matters properly submitted to
the shareholders for their vote. The articles of incorporation do not permit
cumulative voting for the election of directors, and shareholders do not have
any preemptive rights to purchase shares in any future issuance of Growtex's
common stock.

Because the holders of shares of Growtex's common stock do not have
cumulative voting rights, the holders of more than 50% of Growtex's
outstanding shares, voting for the election of directors, can elect all of the
directors to be elected, if they so choose. In such event, the holders of the
remaining shares will not be able to elect any of Growtex's directors.

The holders of shares of common stock are entitled to dividends, out of
funds legally available therefor, when and as declared by the Board of
Directors. The Board of Directors has never declared a dividend and does not
anticipate declaring a dividend in the future. In the event of liquidation,
dissolution or winding up of the affairs of Growtex, holders are entitled to
receive, ratably, the net assets of Growtex available to shareholders after
payment of all creditors.

All of the issued and outstanding shares of common stock are duly
authorized, validly issued, fully paid, and non-assessable. To the extent that
additional shares of Growtex's common stock are issued, the relative interests
of existing shareholders may be diluted.

INTERESTS OF NAMED EXPERTS AND COUNSEL

Neither Elliott Tulk Pryce Anderson nor Vandeberg Johnson & Gandara was
employed on a contingent basis in connection with the registration or offering
of Growtex's common stock.

8
<PAGE>

DESCRIPTION OF BUSINESS

General

Growtex was incorporated under the laws of the State of Nevada on April 2,
1999, and is in its early developmental and promotional stages. To date,
Growtex's only activities have been organizational, directed at acquiring its
principal asset, raising its initial capital and developing its business plan.
Growtex has not commenced commercial operations. Growtex has no full time
employees and owns no real estate. Growtex's business plan is to determine the
feasibility of the Biocatalyst fish farming and aquarium applications, and, if
Biocatalyst proves to be feasible for these applications, to become a
Biocatalyst producer.

Growtex was formed by David R. Mortenson. Its initial shareholders, Mr.
Mortenson and Mr. John Bauska, were each issued 250,000 shares of Growtex
common stock on April 2, 1999, in payment for certain organizational costs. An
additional 2,000,000 shares were issued on April 28, 1999, to a total of 10
shareholders as compensation for the grant of the Biocatalyst distribution and
production rights. All stock was issued based on a valuation by the Board of
Directors of $0.001 per share. The original shareholders sold their stock to
the current shareholders in private transactions.

On April 5, 1999, Growtex acquired from David R. Mortenson & Associates
("Mortenson") the rights to distribute and produce the oxygen-enriched water
product "Biocatalyst" only for aquaculture, mariculture, fish farming and
aquarium uses in Mexico. (Aquaculture and mariculture are forms of fish
farming; the term fish farming is used to refer to aquaculture, mariculture
and fish farming collectively.) A copy of the license agreement has been filed
as an exhibit to the registration statement of which this prospectus is a
part. Mortenson acquired these rights from the inventor of the product,
N.W. Technologies, Inc., under a distribution agreement. The distribution
agreement granted Mortenson exclusive distribution rights for the use of
Biocatalyst in fish farming, aquarium and other applications, along with the
right to sublicense distribution for those applications. N.W. Technologies
reserved for itself the right to use Biocatalyst for oil spill remediation; it
has no other licensees besides Mortenson. Mortenson has sublicensed its rights
to distribute Biocatalyst for various applications in various geographic
locations to approximately 20 sublicensees; however, none of these is a
potential competitor of Growtex, which has exclusive right to distribute
Biocatalyst for fish farming and aquarium applications in Mexico. The
Biocatalyst technology's purpose is to improve the effectiveness of existing
processes that include an oxygenation process that takes place in a liquid or
solid environment. N.W. Technologies's Biocatalyst technology is proprietary
and subject to a confidentiality agreement. The technology is not patented.

Background to Development of Biocatalyst

The technology behind Biocatalyst was developed by a Houston, Texas based
company, N.W. Technologies, for the bioremediation of oil spills.
Bioremediation is the use of microbes to biodegrade substances such as oil.
N.W. Technologies discovered that by breaking the oil into colloidal
(microscopic) particles using a contact emulsifier, which also acts as a host
for oil-eating microbes, it could speed up the process of bioremediating
spilled oil. By breaking the oil into colloidal (microscopic) particles, the
microbes have access to an increased surface area of spilled oil (better
access to the food source). This increased access to the food source allows
the microbes to consume spilled oil more quickly.

The microbes need a ready supply of oxygen in order to consume the spilled
oil. Below six to twelve inches of soil depth, depending on soil type, oxygen
exchange is virtually non-existent, yet many oil spills reach far below that
level. Remediation companies have historically used a process called sparging
to oxygenate soils where bioremediation is being used. Sparging utilizes
perforated pipes placed in the affected area. Air is then pumped into them and
released through the perforations. Sparging is an expensive process to
implement and may result in the release of some of the volatile compounds to
be remediated, thus causing secondary air pollution.

To counter the problems with sparging, N.W. Technologies created
Biocatalyst. This is a water product with oxygen organically bonded to the
water molecule. When the microbe's extra-cellular enzymes come in contact

9
<PAGE>

with the water/oxygen molecule structure, they release this oxygen, making it
available to the microbes. This process provides a means to deliver oxygen to
the microbes at depths below six to twelve inches of soil. N.W. Technologies
and their distributors/applicators have found that the use of Biocatalyst
substantially speeds up oil spill bioremediation times. N.W. Technologies has
ceased using ordinary water in the formulation of its products. Instead it
uses Biocatalyst because N.W. Technologies feels that Biocatalyst does
everything that the water does, while also providing extra oxygen needed by
the oil-eating microbes.

Production of Biocatalyst

Biocatalyst is produced through an organic process that uses any water
source. The organic process takes place in a generator, which may be built
using standard off-the-shelf tankage, pumps and plumbing supplies. The
generator uses a six-foot by ten-foot print, and the total cost of an
industrial grade generator is approximately $5,000 per unit. With proper care
and maintenance, generators should last for years. An initial culture, which
is part of N.W. Technologies's proprietary process, is introduced into the
generator to create oxygen-enriched water. The generator then requires a
regular supply of "biomas", a proprietary product of N.W. Technologies, to
keep producing Biocatalyst.

Once a generator is set up and producing, production continues for the life
of the generator provided that water is available (minimum of 15 gallons per
hour, maximum 30 gallons per hour), that the generator is protected from
freezing, and that "biomas" is added 5 days per week. Mortenson has indicated
a willingness to furnish end-users a production package consisting of the
generator, the initial culture to create the oxygen enriched water, and a
regular supply of "biomas" for the generator. The client will supply a source
of usable water, electrical power and staff to operate the generator(s). As
currently configured, each generator can produce 720 gallons of raw undiluted
product per day. Where more than this volume is needed, multiple generators
can be supplied.

Application of Biocatalyst to Fish Farming and Aquarium Uses

Growtex believes that Biocatalyst can be adapted to fish farming and
aquarium uses. From the lower rungs of a food chain up to the end product
being raised for human consumption, the organisms in a fish farming system all
require oxygen. Tests have shown that the introduction of Biocatalyst into
these systems enhances the growth of bacteria and microorganisms at the bottom
of the food chain. Growtex believes that increasing the food supply at the
bottom of the food chain will result in an increased food supply throughout
the food chain, and therefore larger, healthier fish and shellfish. In
addition, Growtex anticipates that additional oxygen in and of itself will
enhance the health and size of the end product being raised for human
consumption, as well as accelerate its growth rate. Growtex believes that the
major cash crop species that will benefit from the use of Biocatalyst are, in
fresh water, crayfish, catfish and talapia (a perch-type fish native to
Mexico), and, in brackish water, shrimp. For fish farming systems, Growtex
anticipates that Biocatalyst would be supplied to the systems using an on-site
generator or generators.

Growtex also believes that a market exists for aquarium uses of Biocatalyst.
As with fish farming systems, Growtex believes that Biocatalyst will improve
the overall health of aquarium systems, whether the system is a large public
aquarium or an individual's private display in the home or office. For large
public aquariums, Growtex anticipates that Biocatalyst would be supplied to
the systems using an on-site generator or generators. For private displays,
Growtex anticipates that Biocatalyst would be supplied in bottled form.
Mortenson has had preliminary discussions with large pet supply retailers who
have expressed an interest in carrying Biocatalyst for aquarium uses. The
additional oxygen supplied by Biocatalyst is believed to enhance the growth
and overall health of fish in aquariums, and may supplement or even replace
the need for air pumps in tanks.

Short-Term Plan of Operation

The license agreement with Mortenson that provides the rights to distribute
and produce Biocatalyst includes a minimum purchase requirement that must be
met by April 5, 2000. Because the offering under this

10
<PAGE>

prospectus is solely for selling shareholders, Growtex will need to raise
funds to develop its license rights. By raising additional funds, the
ownership interest of holders of existing shares of Growtex's common stock
will be diluted.

Growtex plans to cooperate with Mortenson and licensees that have
Biocatalyst fish farming or aquarium use license rights in other territories
to economize on the costs of product research and development. No generator
has been successfully installed and operated at any fish farming system or at
any large aquarium, even on a test basis. No credible scientific study has
been undertaken to document and quantify the benefits of bottled Biocatalyst
to small private aquarium displays. The initial step that Growtex plans to
take in conjunction with Mortenson and other licensees is to identify a fish
farming system interested in participating in a trial. Once the system is
identified, Growtex, Mortenson and the other licensees will develop a budget
for installing the test generator and agree on an allocation of its costs.
Each participant would then raise its required contribution, and in exchange
it would have access to the trial run results to be used in its marketing and
for business planning purposes. Growtex anticipates that it would raise its
share by one or more private offerings of its common stock. There is no
written agreement to ensure this cooperation. Growtex's expectations
concerning this cooperation are based on informal communications with the
parties and their enlightened economic self-interests.

If the trial is successful from a technical standpoint, Growtex would have
to assess the economic feasibility of proceeding further. Under its license
agreement with Mortenson, to become a Biocatalyst producer Growtex would be
required to pay Mortenson a one-time fee of $25,000, an additional one-time
payment of $10,000 to reimburse unspecified expenses, and minimum annual
royalties of $20,000. Although Growtex's production rights are subject to
negotiation of a definitive agreement, prices for the biomas used to produce
Biocatalyst will likely be subject to change following notice from Mortenson.
There is no guarantee that fish farming system proprietors, the primary target
market, will conclude that Biocatalyst's health, size and growth rate benefits
are worth the price Growtex would have to charge to make money producing and
selling Biocatalyst. Growtex does not plan initially to focus its resources on
the aquarium use market. Growtex believes that if it succeeds in adapting
Biocatalyst to fish farming uses, it will then have a more credible sales
pitch when marketing for aquarium displays.

Growtex recognizes that it may not be feasible to adapt Biocatalyst to fish
farming and aquarium uses. To address this possibility, Growtex continually
evaluates other business opportunities that may be available to it, whether in
the form of asset acquisitions or business combinations. Growtex's management
will spend a significant portion of the time it devotes to Growtex evaluating
other business opportunities that may be available to Growtex. These
opportunities may be related to the Biocatalyst product, or they may be in a
completely unrelated field. Growtex has had discussions with a number of third
parties regarding business opportunities, but none of these discussions have
reached the stage where an agreement in principle is imminent. In any business
opportunity reviewed by Growtex thus far, significant business and economic
issues would have to be resolved in order to reach an agreement. Any asset
acquisition or business combination would likely include the issuance of a
significant amount of Growtex's common stock, which would dilute the ownership
interest of holders of existing shares of Growtex's common stock.

Industry Conditions and Competition

Growtex does not yet know whether adapting Biocatalyst to fish farming and
aquarium uses will be a feasible money-making venture. It does know, however,
that if the application turns out to be successful, it will hold an exclusive
license in Mexico until April 5, 2002, as long as it meets its minimum
purchase requirements or becomes a producer. Growtex is aware that pumping
systems currently exist for injecting oxygen into fish farming systems, and
that aquariums generally have a filtration system that includes an oxygen pump
to inject oxygen into the aquarium. Growtex believes that Biocatalyst will be
a superior solution to injection of oxygen, however, because the extra oxygen
bonded to the water molecule is released upon contact with a living organism.
Existing oxygen injection systems simply dissolve oxygen into the water.
Growtex is currently unaware of any other product that holds potential to
introduce oxygen to fish farming and aquarium systems in excess of that able
to be dissolved into water. It is not unthinkable, however, that another
company could develop a product

11
<PAGE>

similar to Biocatalyst that would permit the release of additional oxygen into
fish farming and aquarium systems. Growtex may have to compete with such
companies in the future if it succeeds in establishing the feasibility of the
Biocatalyst for fish farming and aquarium uses.

Employees

Growtex is a development stage company and currently has no employees.
Management plans to use consultants, attorneys and accountants as necessary
and does not plan to engage any full-time employees in the near future. If
Growtex establishes the feasibility of Biocatalyst for fish farming and
aquarium uses, its priority will shift to developing and implementing a plan
for marketing. The marketing plan would focus on two major goals: identifying
the most likely prospects for installing generators and retaining one or more
qualified individuals to market Biocatalyst generators to those prospects.
Growtex would hire marketing employees based on the projected size of the
market and the compensation necessary to retain qualified sales employees. A
portion of any employee compensation likely would include the right to acquire
stock in Growtex, which would dilute the ownership interest of holders of
existing shares of Growtex's common stock.

Available Information

Growtex has filed with the Securities and Exchange Commission a registration
statement on Form S-1 with respect to the common stock offered by this
prospectus. This prospectus, which constitutes a part of the registration
statement, does not contain all of the information set forth in the
registration statement or the exhibits and schedules which are part of the
registration statement. For further information with respect to Growtex and
its common stock, see the registration statement and the exhibits and
schedules thereto. Any document Growtex files may be read and copied at the
Commission's public reference rooms in Washington, D.C.; New York, New York;
and Chicago, Illinois. Please call the Commission at 1-800-SEC-0330 for
further information about the public reference rooms. Growtex's filings with
the Commission are also available to the public from the Commission's website
at http://www.sec.gov.

Upon completion of this offering, Growtex will become subject to the
information and periodic reporting requirements of the Securities Exchange Act
and, accordingly, will file periodic reports, proxy statements and other
information with the Commission. Such periodic reports, proxy statements and
other information will be available for inspection and copying at the
Commission's public reference rooms, and the website of the Commission
referred to above.

DESCRIPTION OF PROPERTY

Growtex currently maintains limited office space, occupied by Mr. Kirsh, for
which it pays no rent. Its address is 1177 West Hastings, Suite 2110,
Vancouver, British Columbia V6E 2K3, CANADA, and its phone number is (604)
687-2199. Growtex does not believe that it will need to obtain additional
office space at any time in the foreseeable future until its business plan is
more fully implemented.

LEGAL PROCEEDINGS

Growtex is not a party to any material pending legal proceedings, and none
of its property is the subject of a pending legal proceeding. Further, the
officer and director knows of no legal proceedings against Growtex or its
property contemplated by any governmental authority.

12
<PAGE>

MARKET PRICE OF AND DIVIDENDS ON CAPITAL
STOCK AND OTHER SHAREHOLDER MATTERS

No established public trading market exists for Growtex's securities.
Growtex has no common equity subject to outstanding purchase options or
warrants. Growtex has no securities convertible into its common equity. There
is no common equity that could be sold pursuant to Rule 144 under the
Securities Act or that Growtex has agreed to register under the Securities Act
for sale by shareholders. Except for this offering, there is no common equity
that is being, or has been publicly proposed to be, publicly offered by
Growtex.

As of May 31, 1999, there were 2,500,000 shares of common stock outstanding,
held by 10 shareholders of record. The most recent sale of Growtex's common
stock from one investor to another occurred on May 11, 1999, when Mr. Kirsh
purchased a total of 450,000 shares of Growtex common stock from Mr. Mortenson
and 250,000 shares from Mr. Bauska at an average price of $0.047 in an arms'
length transaction. Upon effectiveness of the registration statement that
includes this prospectus, all of Growtex's outstanding shares will be eligible
for sale.

To date Growtex has not paid any dividends on its common stock and does not
expect to declare or pay any dividends on its common stock in the foreseeable
future. Payment of any dividends will depend upon Growtex's future earnings,
if any, its financial condition, and other factors as deemed relevant by the
Board of Directors.

SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements appearing elsewhere in this
prospectus. The statement of operations data set forth below for the period
from April 2, 1999, (inception) to April 30, 1999, and the balance sheet data
at April 30, 1999, are derived from Growtex's audited financial statements
included elsewhere in this prospectus. The historical results are not
necessarily indicative of results to be expected for any future period.

<TABLE>
<CAPTION>
Inception to
April 30, 1999
--------------
<S> <C>
Statement of Operations Data:
Net sales................................................. $ --
======
Loss from continuing operations........................... $ --
======
Loss per share from continuing operations................. $ --
======
<CAPTION>
As of
April 30, 1999
--------------
<S> <C>
Balance Sheet Data:
Total assets.............................................. $2,600
======
</TABLE>

Growtex is in its early developmental and promotional stages. To date,
Growtex's only activities have been organizational, directed at acquiring its
principal asset, raising its initial capital and developing its business plan.
Growtex has not commenced commercial operations. As a result, the selected
financial data presented above bear no resemblance to the results that Growtex
expects when it begins operations. See "Risk Factors," "Description of
Business" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

13
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This prospectus contains forward-looking statements, the accuracy of which
involve risks and uncertainties. We use words such as "anticipates,"
"believes," "plans," "expects," "future," "intends" and similar expressions to
identify forward-looking statements. This prospectus also contains forward-
looking statements attributed to certain third parties relating to their
estimates regarding the potential uses of Biocatalyst and markets for it.
Prospective investors should not place undue reliance on these forward-looking
statements, which apply only as of the date of this prospectus. Growtex's
actual results could differ materially from those anticipated in these
forward-looking statements for many reasons, including the risks faced by
Growtex described in "Risk Factors" and elsewhere in this prospectus. The
following discussion and analysis should be read in conjunction with Growtex's
Financial Statements and Notes thereto and other financial information
included elsewhere in this prospectus.

Results of Operations

During the period from April 2, 1999, (inception) through April 30, 1999,
Growtex has engaged in no significant operations other than organizational
activities, acquisition of the rights to market Biocatalyst and preparation
for registration of its securities under the Securities Act of 1933, as
amended. No revenues were received by Growtex during this period.

For the current fiscal year, Growtex anticipates incurring a loss as a
result of organizational expenses, expenses associated with registration under
the Securities Act of 1933, and expenses associated with setting up a company
structure to begin implementing its business plan. Growtex anticipates that
until these procedures are completed, it will not generate revenues, and may
continue to operate at a loss thereafter, depending upon the performance of
the business.

Growtex's business plan is to determine the feasibility of the Biocatalyst
in fish farming and aquarium applications, and, if Biocatalyst proves to be
feasible for these applications, become a Biocatalyst producer. Under the
license agreement with Mortenson, Growtex is required to purchase $125,000 of
Biocatalyst by April 5, 2000, and a further $175,000 by April 5, 2001, to
retain its license. Growtex currently does not have funds to meet the minimum
purchase requirements and may be unable to meet the minimum purchase
requirements by their respective deadlines.

The initial step that Growtex plans to take to implement its business plan
is to identify a fish farming system interested in participating in a trial,
which Growtex hopes to conduct in conjunction with Mortenson and other
licensees. There is no written agreement to ensure this cooperation. Growtex's
expectations concerning this cooperation are based on informal communications
with the parties and the economic interests of the parties in sharing the
expense of testing. Growtex has been discussing the location of a test
facility with Mortenson and other licensees. Once the system is identified,
Growtex, Mortenson and the other licensees will develop a budget for
installing the test generator and agree on an allocation of costs. Each
participant would then raise its required contribution, and in exchange it
would have access to the trial run results to be used in its marketing and for
business planning purposes. It is difficult to estimate Growtex's share of
testing costs without knowing the identity or location of the fish farming
test facility. Presumably, however, the total cost of installing a test
generator, assuming difficulty in engineering its installation and other
unforeseen difficulties, would not exceed $50,000 (ten times the estimated
$5,000 per unit cost). Growtex anticipates that it would raise its share by
one or more private offerings of its common stock.

At present, due to Growtex's developmental stage, it has no critical systems
that it must test for Year 2000 compliance. However, Growtex cannot be certain
that it will not experience unanticipated negative consequences from Year 2000
problems, or that it will be able to make any such modifications as may become
necessary in a timely, cost-effective and successful manner, and the failure
to do so could have a material adverse effect on

14
<PAGE>

Growtex's business and operating results. It is also possible that one of
Growtex's suppliers, such as a utility or the producer of Biocatalyst or
Biomas, or one of Growtex's clients may become inoperative, and cause Growtex
to incur heavy expenses or losses.

Liquidity and Capital Resources

Growtex remains in the development stage and, since inception, has
experienced no significant change in liquidity or capital resources or
shareholders' equity. Consequently, Growtex's balance sheet as of April 30,
1999, reflects total assets of $2,600, in the form of a license and
capitalized organizational costs.

Growtex expects to carry out its plan of business as discussed above.
Growtex's only immediate expense, until such time as a test generator is
installed as discussed above, is payment to Mr. Kirsh for his services to
Growtex. Mr. Kirsh will serve in his capacity as sole officer and director of
Growtex without compensation until a test site is established.

In addition, Growtex may engage in a combination with another business.
Growtex cannot predict the extent to which its liquidity and capital resources
will be diminished prior to the consummation of a business combination or
whether its capital will be further depleted by the operating losses (if any)
of the business entity with which Growtex may eventually combine. Growtex has
engaged in discussions concerning potential business combinations, but has not
entered into any agreement for such a combination.

Growtex will need additional capital to carry out its business plan or to
engage in a business combination. No commitments to provide additional funds
have been made by management or other shareholders. Accordingly, there can be
no assurance that any additional funds will be available on terms acceptable
to Growtex or at all. Growtex has no commitments for capital expenditures.

CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Elliott Tulk Pryce Anderson has served as Growtex's independent auditor
since inception, and Growtex has not had any dispute with Elliott Tulk Pryce
Anderson over accounting or financial disclosure.

15
<PAGE>

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the name, age and position of each director
and executive officer of Growtex:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Michael Kirsh................ 46 President, Secretary, Treasurer, Director
</TABLE>

Mr. Kirsh became Growtex's sole director and officer in May 1999. During the
past five years, Mr. Kirsh has worked with a group of independent investors
that acquires private companies and conducts reverse takeovers. In a reverse
takeover, the shareholders of an acquired company generally end up owning all
or most of the resulting combined company. Before forming his investment
group, Mr. Kirsh had invested in both real estate and the stock market. Mr.
Kirsh is also a director of Mezuma Mining, which is traded on the Alberta
Stock Exchange. Mezuma Mining is a blank check company--a development stage
company which has no specific business plan or purpose. Mezuma Mining has
currently raised approximately $250,000.00 Canadian and is looking for a
company to acquire. From approximately 1986 to 1992 Mr. Kirsh developed two
dental practices in Vancouver, British Columbia, CANADA, which he sold in 1992
before forming his investment group.

The director named above will serve until the first annual meeting of
Growtex's shareholders. Thereafter, directors will be elected for one-year
terms at the annual shareholders' meeting. Officers will hold their positions
at the pleasure of the board of directors, absent any employment agreement. No
employment agreements currently exist or are contemplated. There is no
arrangement or understanding between the director and officer of Growtex and
any other person pursuant to which any director or officer was or is to be
selected as a director or officer.

The director and officer of Growtex will devote his time to Growtex's
affairs on an "as needed" basis. As a result, the actual amount of time which
he will devote to Growtex's affairs is unknown and is likely to vary
substantially from month to month.

EXECUTIVE COMPENSATION

No officer or director has received any remuneration from Growtex. Although
there is no current plan in existence, it is possible that Growtex will adopt
a plan to pay or accrue compensation to its officers and directors for
services related to the implementation of Growtex's business plan. Growtex has
no stock option, retirement, incentive, defined benefit, actuarial, pension or
profit-sharing programs for the benefit of directors, officers or other
employees, but the Board of Directors may recommend adoption of one or more
such programs in the future. Growtex has no employment contract or
compensatory plan or arrangement with any executive officer of Growtex. The
director currently does not receive any cash compensation from Growtex for his
service as a member of the board of directors. There is no compensation
committee, and no compensation policies have been adopted. See "Certain
Relationships and Related Transactions."

16
<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of May 31, 1999, Growtex's outstanding
common stock owned of record or beneficially by each executive officer and
director and by each person who owned of record, or was known by Growtex to
own beneficially, more than 5% of Growtex's common stock, and the
shareholdings of all executive officers and directors as a group.

<TABLE>
<CAPTION>
Percentage
Shares of
Name Owned Shares Owned
---- ------- ------------
<S> <C> <C>
Michael Kirsh, President, Secretary, Treasurer, and
Director
5076 Angus Drive
Vancouver, B.C. Canada V6M 3M5........................... 700,000 28%
David Goldman
910 Richards Street
Vancouver, B.C. Canada V6B 3C1........................... 200,000 8%
Peter Finck
124 - 3989 Henning Drive
Burnaby, B.C. Canada V5C 6N5............................. 200,000 8%
Michael Robison
3147 West 8th Avenue
Vancouver, B.C. Canada V6K 2C4........................... 200,000 8%
Brian Gruson
bce Place
181 Bay Street, Suite 3100
Toronto, Ontario, Canada M5J 2T3......................... 200,000 8%
Brent Lokash
1708 - 808 Nelson Street
Vancouver, B.C. Canada V6G 3A9........................... 200,000 8%
Mark R. Epstein Law Corp.(1)
650 - 1500 West Georgia Street
Vancouver, B.C. Canada V6G 3A9........................... 200,000 8%
John Trotter
13 - 2654 Morningstar Crescent
Vancouver, B.C. Canada V5S 4P4........................... 200,000 8%
KM Lifestyle Enterprise, Inc.(2)
2110 - 1177 West Hastings
Vancouver, B.C. Canada V6E 2K3........................... 200,000 8%
Plantation Capital Corp.(3)
302 - 1132 Hamilton Street
Vancouver, B.C. Canada V6B 2S2........................... 200,000 8%
ALL EXECUTIVE OFFICERS & DIRECTORS AS A GROUP (1
Individual)............................................ 700,000 28%
</TABLE>
- --------

(1) Mark R. Epstein is the sole beneficial owner of shares held by the Mark R.
Epstein Law Corp.

(2) Carla Markin is the sole beneficial owner of shares held by K.M.
Lifestyles Enterprise, Inc.

(3) Tim Gamble is the sole beneficial owner of shares held by Plantation
Capital Corp.

All shares are held of record and each record shareholder has sole voting
and investment power. Growtex knows of no one who has the right to acquire
beneficial ownership in Growtex common stock. Other than the sale of Growtex
stock contemplated by this prospectus, there are no arrangements known to
Growtex the operation of which may at a subsequent date result in a change of
control of Growtex.

17
<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

No director, executive officer or nominee for election as a director of
Growtex, and no owner of five percent or more of Growtex's outstanding shares
or any member of their immediate family has entered into or proposed any
transaction in which the amount involved exceeds $60,000. David R. Mortenson
and John T. Bauska, the initial shareholders, are, respectively, the principal
of and an investor-participant in David R. Mortenson & Associates, the
licensor of Growtex's right to distribute and produce the Biocatalyst oxygen-
enriched water product. Mr. Mortenson and Mr. Bauska were previously directors
of Growtex, and the president and secretary-treasurer, respectively. They are
no longer directors, officers or shareholders of Growtex. If Growtex succeeds
in implementing its business plan, Growtex will make payments to David R.
Mortenson & Associates in the future that will exceed $60,000, although the
resulting benefits to Mr. Mortenson and Mr. Bauska may not individually exceed
$60,000.

DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

Growtex's bylaws provide that Growtex will indemnify its officers and
directors for costs and expenses incurred in connection with the defense of
actions, suits, or proceedings against them on account of their being or
having been directors or officers of Growtex, absent a finding of negligence
or misconduct in the performance of duty.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling Growtex
pursuant to the forgoing provisions, Growtex has been informed that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in that Act and is, therefore,
unenforceable.

18
<PAGE>

INDEX TO FINANCIAL STATEMENTS

GROWTEX INC.
(A Development Stage Company)

<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditor's Report....................................... F-2
Balance Sheet as of April 30, 1999................................. F-3
Statement of Operations from April 2, 1999 (Date of Inception) to
April 30, 1999.................................................... F-4
Statement of Cash Flows from April 2, 1999 (Date of Inception) to
April 30, 1999.................................................... F-5
Statement of Stockholders' Equity from April 2, 1999 (Date of
Inception) to April 30, 1999...................................... F-6
Notes to the Financial Statements.................................. F-7 to F-8
</TABLE>
<PAGE>

Independent Auditor's Report

To the Board of Directors
Growtex Inc.
(A Development Stage Company)

We have audited the accompanying balance sheet of Growtex Inc. (A
Development Stage Company) as of April 30, 1999 and the related statements of
operations, stockholders' equity and cash flows for the period from April 2,
1999 (Date of Inception) to April 30, 1999. 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 U.S. generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the aforementioned financial statements present fairly, in
all material respects, the financial position of Growtex Inc. (A Development
Stage Company), as of April 30, 1999, and the results of its operations and
its cash flows for the period from April 2, 1999 (Date of Inception) to April
30, 1999, in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has not generated any revenues or conducted
any operations since inception. These factors raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans in
regard to these matters are also discussed in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

Elliott, Tulk, Pryce, Anderson

/s/ Elliott, Tulk, Pryce, Anderson
CHARTERED ACCOUNTANTS

Vancouver, Canada
June 9, 1999

F-2
<PAGE>

Growtex Inc.
(A Development Stage Company)
Balance Sheet
(expressed in U.S. dollars)

<TABLE>
<CAPTION>
April 30,
1999
Assets ---------
<S> <C>
License (Note 3)................................................. $2,000
Organizational costs............................................. 600
------
2,600
======
<CAPTION>
Liabilities and Stockholders' Equity
<S> <C>
Current Liabilities.............................................. --
------
Contingent Liability (Note 1)
Stockholders' Equity
Common Stock, 25,000,000 shares authorized with a par value of
$.001; 2,500,000 shares issued and outstanding.................. 2,600
Deficit Accumulated During the Development Stage................. --
------
2,600
------
2,600
======
</TABLE>

(The accompanying notes are an integral part of the financial statements)

F-3
<PAGE>

Growtex Inc.
(A Development Stage Company)
Statement of Operations
(expressed in U.S. dollars)

<TABLE>
<CAPTION>
From April 2, 1999
(Date of Inception)
to April 30, 1999
$
-------------------
<S> <C>
Revenues............................................... --
-----
Expenses............................................... --
-----
Net Loss............................................... --
=====
</TABLE>

(The accompanying notes are an integral part of the financial statements)

F-4
<PAGE>

Growtex Inc.
(A Development Stage Company)
Statement of Cash Flows
(expressed in U.S. dollars)

<TABLE>
<CAPTION>
From April 2, 1999
(Date of Inception)
to April 30, 1999
$
-------------------
<S> <C>
Cash Flows to Operating Activities
Net loss.............................................. --
-----
Net Cash Used by Operating Activities................... --
-----
Cash Flows from Financing Activities
Increase in shares issued............................. 500
-----
Net Cash Provided by Financing Activities............... 500
-----
Cash Flows to Investing Activities
Increase in organizational costs...................... (500)
-----
Net Cash Used in Investing Activities................... (500)
-----
Change in cash.......................................... --
Cash--beginning of period............................... --
-----
Cash--end of period..................................... --
=====
Non-Cash Financing Activities
A total of 2,000,000 shares were issued at a fair
market value of $0.001 per share for the acquisition
of a License (Note 3)................................ 2,000
Organization costs paid for by a director for no
consideration treated as additional paid in capital.. 100
-----
2,100
=====
Supplemental Disclosures
Interest paid......................................... --
Income tax paid....................................... --
</TABLE>

(The accompanying notes are an integral part of the financial statements)

F-5
<PAGE>

Growtex Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
From April 2, 1999 (Date of Inception) to April 30, 1999
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
Deficit
Accumulated
During the
Common Stock Development
------------------ Stage
Shares # Amount $ $
--------- -------- -----------
<S> <C> <C> <C>
Balance--April 2, 1999 (Date of Inception)... -- --
Stock issued for $500 of organizational
expenses.................................. 500,000 500
Additional paid in capital for
organizational expenses incurred by a
director on behalf of the Company......... -- 100
Stock issued for "The Biocatalyst License"
at a fair market value of $0.001 per
share..................................... 2,000,000 2,000
Net loss for the period.................... --
--------- ----- -----
Balance--April 30, 1999...................... 2,500,000 2,600 --
========= ===== =====
</TABLE>

(The accompanying notes are an integral part of the financial statements)

F-6
<PAGE>

Growtex Inc.
(A Development Stage Company)
Notes to the Financial Statements
(expressed in U.S. dollars)
1. Development Stage Company

Growtex Inc. herein (the "Company") was incorporated in the State of Nevada,
U.S.A. on April 2, 1999. The Company has acquired a license to market and
distribute a product as discussed in Note 3.

In a development stage company, management devotes most of its activities to
establishing these new businesses. Planned principal activities have not yet
begun nor produced any revenues. The ability of the Company to emerge from
the development stage with respect to any planned principal business activity
is dependent upon its successful efforts to raise additional equity financing
and develop a market for its products.

2. Summary of Significant Accounting Policies

(a) Year end

The Company's fiscal year end is April 30.

(b) Licenses

Costs to acquire licenses are capitalized as incurred. These costs will
be amortized on a straight-line basis over their remaining estimated
useful lives upon the licenses becoming commercially viable or written-
off to operations if the licenses do not become commercially viable.

The Company considers all highly liquid instruments with a maturity of
three months or less at the time of issuance to be cash equivalents.

(d) Use of Estimates

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

3. License

On April 5, 1999 the Company acquired a license for a product called
Biocatalyst. The Company has the exclusive right to distribute and market the
product under a private label in Mexico for a period of three years expiring
April 5, 2002. Biocatalyst is an oxygen enriched water product used to
enhance the growth of microbes in soils located underground. The Company
issued 2,000,000 shares at a fair market value of $.001 or $2,000. The shares
were issued to the licensor who are members of a partnership and whose
general partner is also a spouse of a director and officer of the Company.
Once the Company purchases a minimum of 5,000 gallons of product for a
minimum period of six consecutive months, then a license will be granted to
the Company to produce the product in a location to be mutually agreed upon.
A producer license will also be granted if the Company can demonstrate its
financial capability, pay the licensor a one time fee of $25,000, an
additional one-time payment of $10,000 to reimburse unspecified expenses, and
pay minimum annual royalties of $20,000. If no producing license is granted
then the Company is committed to purchase a minimum amount of product during
each of the first two years of its license. At current prices, Growtex would
have to purchase approximately 62,500 gallons of Biocatalyst by April 5,
2000, and a further 87,500 gallons by April 5, 2001, to retain its license.
The Company has the option to renew the license for an additional three
years.

F-7
<PAGE>

4. Related Party Transaction

The License referred to in Note 3 was sold to the Company by a partnership
whose general manager is the President of the Company and a director for
consideration of 2,000,000 shares for total fair market consideration of
$2,000. These shares were paid evenly to the ten partners.

5. Uncertainty Due to the Year 2000 Issue

The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date-sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information
using the year 2000 dates is processed. In addition, similar problems may
arise in some systems which use certain dates in 1999 to represent something
other than a date. The effects of the Year 2000 Issue may be experienced
before, on, or after January 1, 2000, and, if not addressed, the impact on
operations and financial reporting may range from minor errors to significant
systems failure which could affect an entity's ability to conduct normal
business operations. It is not possible to be certain that all aspects of the
Year 2000 Issue affecting the Company, including those related to the efforts
of customers, suppliers, or other third parties, will be fully resolved.

F-8
<PAGE>

PROSPECTUS

, 1999

GROWTEX INC.

1177 West Hastings, Suite 2110
Vancouver, British Columbia V6E 2K3, CANADA
(604) 687-2199

2,500,000 Shares of Common Stock
to be sold by current shareholders

Growtex has not authorized any dealer, salesperson or other person to give
you written information other than this prospectus or to make representations
as to matters not stated in this prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or a
solicitation of your offer to buy the securities in any jurisdiction where
that would not be permitted or legal. Neither the delivery of this prospectus
nor any sales made hereunder after the date of this prospectus shall create an
implication that the information contained herein or the affairs of Growtex
have not changed since the date hereof.

Until , 1999 (90 days after the date of this prospectus), all dealers
that effect transactions in these shares of common stock may be required to
deliver a prospectus. This is in addition to the dealer's obligation to
deliver a prospectus when acting as an underwriter and with respect to their
unsold allotments or subscriptions.
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The securities are being registered for the account of selling shareholders,
and all of the following expenses will be borne by such shareholders. The
amounts set forth are estimates except for the SEC registration fee:

<TABLE>
<S> <C>
SEC registration fee................................................ $ 35
Printing and engraving expenses..................................... 5,000
Attorneys' fees and expenses........................................ 9,000
Accountants' fees and expenses...................................... 1,500
Transfer agent's and registrar's fees and expenses.................. 500
Miscellaneous....................................................... 965
-------
Total............................................................. $17,000
=======
</TABLE>

Item 14. Indemnification of Directors and Officers.

Pursuant to Nevada law, a corporation may indemnify a person who is a party
or threatened to be made a party to an action, suit or proceeding by reason of
the fact that he or she is an officer, director, employee or agent of the
corporation, against such person's costs and expenses incurred in connection
with such action so long as he or she has acted in good faith and in a manner
which he or she reasonably believed to be in, or not opposed to, the best
interests of the corporation, and, in the case of criminal actions, had no
reasonable cause to believe his or her conduct was unlawful. Nevada law
requires a corporation to indemnify any such person who is successful on the
merits or defense of such action against costs and expenses actually and
reasonably incurred in connection with the action.

The bylaws of Growtex, filed as Exhibit 3.2, provide that Growtex will
indemnify its officers and directors for costs and expenses incurred in
connection with the defense of actions, suits, or proceedings against them on
account of their being or having been directors or officers of Growtex, absent
a finding of negligence or misconduct in office. Growtex's Bylaws also permit
Growtex to maintain insurance on behalf of its officers, directors, employees
and agents against any liability asserted against and incurred by that person
whether or not Growtex has the power to indemnify such person against
liability for any of those acts.

Item 15. Recent Sales of Unregistered Securities.

Set forth below is information regarding the issuance and sales of Growtex's
securities without registration since its formation. No such sales involved
the use of an underwriter and no commissions were paid in connection with the
sale of any securities.

(a) On April 2, 1999, Growtex issued 500,000 shares of common stock to two
shareholders in satisfaction of certain organizational costs
(approximately $500) and activities performed by the shareholders. The
issuance of the shares was exempt from registration under Rule 506 of
Regulation D, and sections 3(b) and 4(2) of the Securities Act of 1933, as
amended, due to the shareholders being Growtex's founders and serving as
its initial management, their status as accredited investors, and the
limited number of investors (two).

(b) On April 5, 1999, Growtex issued a total of 2,000,000 shares of common
stock to ten shareholders, one of whom is the general partner of, and nine
of whom are investor participants in, the licensor of Growtex's
Biocatalyst rights. The issuance was compensation for the license of the
Biocatalyst rights. The issuance of the common stock was exempt from
registration under Rule 504 of Regulation D and section 3(b) of the
Securities Act of 1933, as amended. Growtex's shares were valued at $0.001
per share, and they were issued to accredited investors according to an
exemption from registration under Texas law that permits general
solicitation and general advertising so long as sales are made only to
accredited investors. If the exemption

II-1
<PAGE>

under Rule 504 of Regulation D is not available, Growtex believes that the
issuance was also exempt under Rule 506 of Regulation D and Sections 3(b)
and 4(2) under the Securities Act of 1933, as amended, due to limiting the
manner of the offering, promptly filing notices of sales, and limiting the
issuance of shares to a small number of accredited investors (ten).

Item 16(a). Exhibits.

<TABLE>
<CAPTION>
Exhibit
Number Name Page
------- ---- ----
<C> <S> <C>
3.1* Articles of Incorporation
3.2* Bylaws
5.1 Opinion re: Legality
10.1 License Agreement
10.2 Amendment No. 1 to License Agreement
23.1 Consent of Independent Auditors.
23.2 Consent of Counsel (see Exhibit 5.1).
27.1* Financial Data Schedule.
</TABLE>
- --------

* Previously filed.

Item 16(b). Financial Statement Schedules.

As of April 30, 1999, Growtex:

. has no valuation or qualifying accounts

. does not have a substantial portion of its business devoted to acquiring
and holding for investment real estate or interests therein

. has no subsidiaries

. has no investments in mortgage loans on real estate.

Item 17. Undertakings.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:

(a) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;

(b) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and

(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

II-2
<PAGE>

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

II-3
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Vancouver, Province of
British Columbia, CANADA, on September 22, 1999.

GROWTEX INC.

/s/ Michael Kirsh
_____________________________________
By: Michael Kirsh
Its: President

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<S> <C> <C>
/s/ Michael Kirsh President, Secretary, September 22,
____________________________________ Treasurer, and Director 1999
Michael Kirsh
</TABLE>

II-4
<PAGE>

INDEX TO EXHIBIT

<TABLE>
<CAPTION>
Exhibit
Number Name
------- ----
<C> <S> <C>
3.1* Articles of Incorporation
3.2* Bylaws
5.1 Opinion re: Legality
10.1 License Agreement
10.2 Amendment No. 1 to License Agreement
23.1 Consent of Independent Auditors.
23.2 Consent of Counsel (see Exhibit 5.1).
27.1* Financial Data Schedule.
</TABLE>
- --------

* Previously filed.

<PAGE>

EXHIBIT 5.1

LETTERHEAD OF VANDEBERG JOHNSON & GANDARA

September 22, 1999

Growtex Inc. - c/o BG Capital
1177 West Hastings
Suite 2110
Vancouver, BC V6E 2K3
CANADA

Re: Growtex Inc. Registration Statement on Form S-1

Ladies and Gentlemen:

We have acted as counsel for Growtex Inc., a Nevada corporation (the
"Company"), in connection with the preparation of the registration statement on
Form S-1 (the "Registration Statement") filed with the Securities and Exchange
Commission(the "Commission") pursuant to the Securities Act of 1933, as amended
(the"Act"), relating to the public offering (the "Offering") of up to 2,500,000
shares (the "Shares") of the Company's common stock, $.001 par value (the
"Common Stock"), to be sold by the selling stockholders. This opinion is being
furnished pursuant to Item 601(b)(5) of Regulation S-K under the Act.

In rendering the opinion set forth below, we have reviewed (a) the
Registration Statement and the exhibits thereto; (b) the Company's Articles of
Incorporation; (c) the Company's Bylaws; (d) certain records of the Company's
corporate proceedings as reflected in its minute books; and (e) such statutes,
records and other documents as we have deemed relevant. In our examination, we
have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, and conformity with the originals of all
documents submitted to us as copies thereof. In addition, we have made such
other examinations of law and fact as we have deemed relevant in order to form a
basis for the opinion hereinafter expressed.

Based upon the foregoing, we are of the opinion that the Shares are validly
issued, fully paid and nonassessable.
<PAGE>

Growtex Inc.
September 22, 1999
Page 2

We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement and to all references to this Firm under the caption
"Interests of Named Experts and Counsel" in the Registration Statement.

Very truly yours,

VANDEBERG JOHNSON & GANDARA

/S/ James L. Vandeberg

James L. Vandeberg

VEO:lmt

<PAGE>

EXHIBIT 10.1

LICENSE AGREEMENT

This agreement ("Agreement") made and entered into effective April 5, 1999
("Effective Date") by and between David R. Mortenson & Associates, having their
principal place of business at P.O. Box 5034, Alvin, Brazoria County, Texas,
U.S.A., ("Grantor") and Growtex, Inc. ("Licensee"), a Nevada Corporation whose
registered office is at 50 West Liberty Street, Suite 880, Reno, Nevada 89501;

W I T N E S S E T H:

WHEREAS, Grantor has certain rights as evidenced by the attached
Distribution Agreement (the "Distribution Agreement") to Products developed by
NW Technologies, Inc. ("NWT"), a Texas corporation with its principal offices at
5817 Centralcrest, Houston, Texas 77092, which company has developed proprietary
know-how in the Products, including Products covered by one or more US Patents
that have been licensed to NWT, and other Products (as hereinafter defined); and

WHEREAS, NWT has proprietary rights to trade dress and trademarks for the
brand name "Natures' Way" and "The Environmental Solution", and other trademarks
and trade dress as may be revealed to Licensee from time to time, collectively
referred to as "Marks"; and

WHEREAS, Grantor is under obligation to maintain the proprietary rights of
NWT to the Marks and to protect NWT's proprietary know-how, as outlined in the
Distribution Agreement; and

WHEREAS, NWT and Grantor desire to have the Products marketed by the
Licensee, under the Licensee's own private label, in the Territory (as
hereinafter defined); and

WHEREAS, Licensee desires to market the Products in the Territory and
hereby acknowledges NWT's exclusive ownership of all of the Marks;

NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
and other good and valuable consideration, Grantor and Licensee agree as
follows:

ARTICLE I
GRANT, TERRITORY AND PRODUCTS

1.01 Grant and Territory. (a) Grantor hereby designates Licensee as a
Private Label distributor for the marketing of the Products in the market(s) and
geographic area(s) set forth in Exhibit "A" hereto, ("Territory"). Licensee
hereby accepts the designation as a distributor on the terms and subject to the
conditions contained herein.

-1-
<PAGE>

(b) Licensee hereby agrees that it will make no use of any present or
future Marks of NWT, or of any marks that would cause confusion with the general
public, for any reason without specific written approval of NWT. Upon
termination of this Agreement for any reason Licensee agrees to cease
immediately all use and display of NWT's trademarks, service marks and trade
names (the Marks) if any permission to use the Marks has been granted.

1.02 Products. (a) The term "Product(s)" as used herein shall mean only
those Products as defined in Exhibit "B" hereto.

(b) "Affiliated Persons" shall mean officers, employees, sales
representatives, consultants or other employees or non-employees to whom
Licensee grants authority to represent the Products.

(c) Licensee's owned label, ("Private Label"), shall mean that the
Product(s) shall be packaged by Licensee utilizing a label on the packages of
the Licensee's own design and invention. Since Licensee's intended uses of the
Product are outside the scope of the expertise of Grantor or its personnel,
Grantor will not be required to furnish label detail to Licensee.

1.03 Compensation: Distributor agrees to pay Grantor the sum of $2,000 in
the form of 2,000,000 shares of Distributor's common stock having a par value of
$0.001 each, and to issue as of the date of execution of this Agreement
certificates to the members of Grantor's Association in the amounts set forth in
the schedule attached hereto as Exhibit "F".

ARTICLE II
DURATION, TERMINATION AND NATURE OF RELATIONSHIP

2.01 Duration. The term of this Agreement shall be three (3) years from
the Effective Date unless terminated earlier as herein provided. This Agreement
may be renewed by Licensee for additional three (3) year periods if no event of
default exists and all other provisions of this Agreement are in full force and
effect.

2.02 Termination. (a) This Agreement may be terminated by Grantor for
cause upon the giving of notice as herein provided.

(b) Termination for Cause. In the event that Licensee shall file a
voluntary petition in bankruptcy or for reorganization of indebtedness, or that
Licensee should, for a period of more than ninety days be the subject of an
involuntary bankruptcy proceeding or receivership over all or substantially all
of Licensee's assets, or that Licensee or any Officer or Director of Licensee
should be found guilty of a felony or a crime involving moral turpitude, or that
Licensee shall, with knowledge and deliberation, breach any provision of this
Agreement, then Company may immediately, upon delivery

-2-
<PAGE>

of written notice to Licensee, terminate this Agreement. Cause shall also
include the violation by Licensee of any of the provisions, purchase
requirements, or monetary requirements of this Agreement ("Events of Default").

(c) Licensee will be allowed 30 days after written notification of an
Event of Default to correct the violation, except for monetary provisions which
will not be granted a grace period by Grantor.

(d) Termination of this Agreement shall not release Licensee or
Grantor from the obligations of either party contained herein.

(e) Termination of this Agreement cancels any rights granted to
Licensee herein.

2.02 Nature of Relationship. (a) This Agreement does not constitute nor
empower the Licensee as the agent or legal representative of Grantor for any
purpose whatsoever. Licensee is and will continue to be an independent
contractor.

(b) The arrangement created by this Agreement is not, and is not
intended to be, a franchise or business opportunity under the United States'
Federal Trade Commission Rule: Disclosure Requirements and Prohibitions
Concerning Franchising and Business Opportunity Ventures and is not a franchise,
business opportunity or seller assisted marketing plan or similar arrangement
under any other federal, state, local or foreign law, rule or regulation;

(c) Licensee shall not repackage or re-label Products for any reason,
except as may be allowed in any licensing agreement issued by Grantor, without
prior written authorization from Grantor. Notwithstanding the provisions of this
paragraph 2.03(c) it is understood by Company that Licensee will repackage
Product and apply Licensee's own label to the containers. The purpose of this
section is to assure that Licensee will not re-label any Product incorrectly
whereby the public would be confused with the recommended use of the Product.

(d) Licensee declares that it will not sell or offer for sale the
product Biocatalyst for use in applications involving bioremediation of
hydrocarbons or where microbes are used, enhanced or suggested for use without
specific written authorization from Grantor. The language herein is not intended
to prohibit the Licensee's use of the Product for that purpose in remediation of
sewage or waste water, whether in septic tanks or waste water treatment
facilities and the like, nor to prohibit Licensee's use of the Product in pond
remediation, exclusive of remediation of petroleum-based hydrocarbon
contamination. Licensee acknowledges that its intended use of the product
"Biocatalyst" for remediation of sewage or waste water, exclusive of remediation
of petroleum-based hydrocarbon contamination has not been specifically tested by
Grantor and as a consequence of this is not included as a recommended use of the
product Biocatalyst by Grantor or NWT. Notwithstanding the foregoing, both

-3-
<PAGE>

parties acknowledge that in bioremediation, Biocatalyst is specifically used to
enhance the growth of microbes in soils, particularly at depths where oxygen
exchange is limited.

-4-
<PAGE>

ARTICLE III
CONFIDENTIALITY, INDEMNITY AND REMEDIES

3.01 Confidential Information. (a) Licensee acknowledges that in
performing its obligations hereunder it will have access to confidential
information and trade secrets of NWT and Grantor not generally known to the
public ("Confidential Information") and - Licensee is obligated to maintain the
confidentiality of the Confidential Information on its own behalf and on behalf
of its "Affiliated Persons" to whom Confidential Information is disclosed. For
the term of this Agreement and for a period of 5 years after cancellation hereof
Licensee and its Affiliated Persons will treat all Confidential Information in a
confidential manner.

(b) Licensee agrees that it will not analyze or otherwise test, or
submit to anyone else for analysis or testing (chemically or otherwise) any
Product unless approved in writing by Grantor and NWT and unless NWT and Grantor
are directly involved in the testing. NWT and Grantor grant the Licensee
hereunder the right to have the Product tested for the presence of oxygen,
pathogens or other nondesirable components. Grantor makes no warranty as to the
content of the Product.

(c) Licensee agrees to sign and to have its affiliated persons sign
confidentiality agreements in the same form as contained herein or as
approved by Grantor.

3.02 Noncompetition. Licensee agrees that the relationship between
Licensee and Grantor is of a special nature and further agrees on its own behalf
and on behalf of its Affiliated Persons that during the term of this Agreement
and for a period of twelve (12) months from and after the termination of this
Agreement that Licensee and its Affiliated Persons will not engage or hold any
interest, directly or indirectly, in any enterprise engaged in the manufacture,
sale or distribution of products of the type manufactured, sold or distributed
by Grantor as of the date this Agreement is terminated.

3.03 Remedies. Licensee agrees that Grantor shall be entitled to seek and
obtain injunctive relief from a court of competent jurisdiction for the purposes
of restraining Licensee from any actual or threatened breach of the provisions
contained herein.

3.04 Indemnity of Licensee and Grantor. Licensee and Grantor shall
indemnify the other and hold them harmless from and against any and all claims,
losses, costs, expenses and liabilities of any kind, including without
limitation court costs and reasonable attorneys' fees, suffered or incurred by
any of them on account of, related, or arising out of the conduct of the
Licensee's or Grantor's business as the case may be.

-5-
<PAGE>

ARTICLE IV
GRANTOR'S OBLIGATIONS TO LICENSEE

4.01 License to Produce. Grantor agrees to grant to Licensee a non-
exclusive license to manufacture the product "Biocatalyst" upon the following
terms and conditions:

(a) License. After the Licensee has purchased a minimum of 5,000
gallons of Product each month for a minimum period of six (6) consecutive months
a license will be granted to Licensee to produce the product in a location to be
named by Licensee and approved by Company with methods of production and
security measures as approved by Company. However, if after the effective date
hereof, Licensee, his successors or permitted assigns, can demonstrate to
Grantor's satisfaction the financial capability of Licensee, his permitted
successors or assigns, then upon a payment of a one time fee of $25,000.00 the
provisions of this section will be deemed by Company to have been fulfilled and
the referenced License to Produce will be granted by Company.

(b) The ingredient "Biomas" as used in the Product will be supplied
by Grantor upon terms, conditions and pricing that may be stated to Licensee by
Grantor at the time of issue of the subject License to Produce.

(c) Royalty and Expense. At the time of issuance of the subject
License to Produce a one-time payment of $10,000.00 will be made to Grantor by
Licensee to reimburse Grantor for unspecified expenses. A monthly royalty of 8%
(eight percent) of gross sales of Licensee will be paid by Licensee to Grantor
within 20 days of the end of each month.

(d) Minimum Royalties. The minimum annual royalties to be paid by
Licensee hereunder, commencing with the granting of a license to Produce from
Grantor to Licensee will be $20,000.00. The minimum annual royalties to be paid
hereunder are non-accumulative.

4.02 Personnel. Grantor agrees to make available to Licensee Grantor's
trained technical personnel for consultation from time to time, if Licensee so
requests in writing. Such consultation may be by telephone or in person. If
Licensee requires the personal assistance of on site technical personnel, then
Licensee will pay actual travel and living expenses for such personnel as agreed
between Grantor and Licensee and an additional fee (per diem) of $300.00 per day
for each technical person requested.

ARTICLE V
LICENSEE'S OBLIGATIONS TO GRANTOR

5.01 Develop Territory. Licensee agrees to (i) use its best efforts to
market the Product in specified markets throughout the Territory, (ii) devote
such time and

-6-
<PAGE>

effort as may be necessary to do so, (iii) retain and train sufficient staff
that is knowledgeable in the sale and use of the Products, and (iv) maintain
facilities sufficient to market, sell, and distribute the Products.

5.02 Business Records. Licensee agrees to maintain reasonably detailed
and accurate records relating to the use of the Products and to furnish to
Grantor a detailed copy of all sales records, invoice copies, copies of all
testimonial letters, product usage data and other records and reports relating
to the sale and use of the Products within the Territory (the "Business
Records") upon request in writing by Grantor.

5.03 Compliance with Laws. Licensee agrees, on its behalf and on behalf
of its "Affiliated Persons" not to perform any acts or transactions which would
place Grantor or Licensee in violation of domestic, foreign, or international
laws, rules or regulations.

5.04 Information Regarding Use of Product. Licensee agrees to forward to
Grantor any and all information, including written, digital, or pictorial
pertaining to the use and distribution of the Products as such information
becomes known to Licensee.

5.05 Inventories. Licensee agrees to maintain adequate inventories of
Products in the Territory to service customers needs.

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF LICENSEE

6.01 Organization. Licensee represents and warrants to Grantor that
Licensee has the authority to enter into this Agreement and to perform its
obligations hereunder.

6.02 No Defaults. Licensee represents and warrants to Grantor that
neither the execution and delivery of this Agreement nor the performance of the
transactions contemplated hereby will conflict with or result in a breach or
violation of any agreement, document, instrument, judgment, decree, order,
governmental permit, certificate or license to which Licensee is a party or to
which Licensee is subject.

ARTICLE VII
TERMS OF SALE

7.01 Standard Terms and Warranties. SINCE THE USE OF THE PRODUCTS ARE
BEYOND THE CONTROL OF GRANTOR THE PRODUCTS ARE SOLD "AS IS", "WHERE IS", WITH NO
WARRANTIES, EXPRESS OR IMPLIED. GRANTOR MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PRODUCTS OR THEIR PERFORMANCE OR AS TO SERVICE, TO
LICENSEE OR ANY OTHER PERSON. IMPLIED WARRANTIES OF MERCHANTABILITY AND

-7-
<PAGE>

FITNESS FOR A PARTICULAR PURPOSE, TO LICENSEE OR TO ANY OTHER PERSON ARE HEREBY
DISCLAIMED. IN NO EVENT SHALL GRANTOR BE LIABLE TO LICENSEE OR ANY PERSON FOR
INCIDENTAL OR CONSEQUENTIAL DAMAGES. THE LIABILITY OF GRANTOR, IF ANY, FOR
DAMAGES RELATING TO ANY ALLEGEDLY DEFECTIVE PRODUCT UNDER ANY LEGAL OR EQUITABLE
THEORY SHALL BE LIMITED TO THE ACTUAL PRICE PAID FOR SUCH PRODUCT. Grantor may
change the limited warranty contained in this Section 7.01 at any time.

7.02 Placement of Orders and Shipping Terms. All shipments of Product shall
be FOB Grantor's plant, Houston, Texas, unless specifically agreed otherwise
Grantor's plant, Houston, Texas. All orders shall be placed with Grantor in
writing upon forms approved by Grantor and Licensee shall verify the accuracy of
the order. Grantor has the right to accept or reject any order, and the terms
and conditions thereof, if the Licensee is in default with any of the
requirements or conditions of this Agreement.

7.03 Claims of Faulty Products. Any claims for faulty Products shall be
governed by the Uniform Commercial Code of Texas, USA unless stated otherwise in
this Agreement.

7.04 Title and Risk of Loss. Products sold to Licensee shall become the
property of Licensee and title and risk of loss shall pass to Licensee at the
time of delivery of the Products to a carrier for shipment to Licensee or
Licensee customer, subject, however, to a security interest which Grantor hereby
reserves in the Products until payment for the Products is received by Grantor.

7.05 Payment Terms. Licensee shall make payment to Grantor in U.S.
dollars to Grantor for all materials ordered under this Agreement at the address
set forth herein, and upon the terms and manner of payment as shown on the Price
List of Grantor as amended from time to time.

7.06 Credit Sales. Licensee and Grantor both acknowledge and agree that
if any sale on credit is permitted hereunder Grantor hereby retains a security
interest in and lien upon the Products so sold until payment in full is received
by Grantor.

7.07 Insurance. Licensee shall secure and maintain on its inventory of
Products purchased on credit in the U.S. dollar amount at least equal to the
amount owing to Grantor by Licensee. Such insurance coverage shall list
Grantor as an additional insured party.

7.08 Prices. Licensee's price from Grantor for Products and printed
matter shall be as set forth in Grantor's current published pricing schedule.
This pricing is subject to change from time to time upon written notice
transmitted by facsimile, or US Mail, by Grantor to Licensee not less than ten
(10) days in advance of any price changes. Prices for Product by Grantor to
Licensee shall be as shown on Exhibit "B" attached hereto.

-8-
<PAGE>

7.09 Printed Matter. Licensee is prohibited from producing and
distributing his own literature, or from any action that would give the
impression directly or indirectly, to others that Product and/or the "Marks" are
the property of Licensee.

7.10 Biomas Supply. At the time that an Agreement allowing the Licensee to
produce the Product as allowed by the terms and conditions stated in this
Agreement, the formulae and processes for the production of the raw material
"Biomas" will be placed with an escrow agent acceptable to both Licensee and
Grantor. If Grantor is not able to supply Biomas in quantities sufficient to
meet Licensee needs for production of Product, and the non-supply condition
continues for a period of 90 (ninety) days, then Licensee will be allowed to
produce Biomas in accordance with a non-exclusive License to Produce to be
issued by Grantor in accordance with the License form deposited with the
formulae and processes with the approved escrow agent.

ARTICLE VIII
MISCELLANEOUS CONDITIONS

8.01 Governing Law. This Agreement and any questions concerning its
validity, construction and performance shall be governed by the laws of the
State of Texas, U.S.A., with venue in Harris County, Texas. Further, the
parties to this Agreement hereby irrevocably submit to the exclusive
jurisdiction of the federal courts sitting in Harris County, Texas, for any
action or proceeding arising out of or relating hereto.

8.02 Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be sent by certified United
States mail, return receipt requested to the other party at the address
specified in the first paragraph of this Agreement. The address of either party
specified above may be changed by a notice given by such party to the other
party in accordance with this Section 8.02.

8.03 Excuse of Performance. Grantor's and Licensee's performance (other
than Licensee's obligation to pay for Products or other fees or monetary
obligations in accordance herewith, which shall not be excused) hereunder shall
be excused if (but only for so long as) any of the following conditions or
events occur and are continuing: Labor conflicts, strikes, lock-outs, fires,
explosions, war, civil disturbances, unforeseen military action, governmental
action, requisitions or seizures, delays of subcontractors or vendors,
unavailability of raw materials or transport facilities, acts of God or nature,
or any other condition or event which is beyond the reasonable control of
Grantor or Licensee, as the case may be.

8.04 Entire Agreement. This Agreement, the Exhibits hereto and any
confidentiality agreement and subdistribution agreement, constitute the entire
agreement between the parties with respect to the subject matter hereof and may
not be altered or modified except by an agreement in writing referring to this
agreement and signed by the parties hereto. Grantor and the Licensee agree that
this agreement supersedes all prior agreements written or oral.

8.05 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute but one and the same instrument.

-9-
<PAGE>

8.06 No Waiver. No failure or delay by any party hereto in exercising any
right, in whole or in part, power or privilege hereunder shall operate as a
waiver thereof.

8.07 Amendment. This Agreement may not be amended or modified except by
an instrument in writing signed on behalf of the parties thereto specifically
referencing this Agreement.

8.08 Severability. Any provisions hereof prohibited by or unlawful or
unenforceable under any applicable law of any jurisdiction shall be ineffective
as to such jurisdiction, without affecting any other provision of this
Agreement.

8.09 Binding on Successors; Assignment. This Agreement is binding on, and
shall inure to the benefit of the parties hereto and their respective
successors, heirs and permitted assigns. This Agreement and any rights or
duties hereunder may not be assigned by Licensee, whether such assignment occurs
by merger, consolidation, sale, lease, other disposition of or any other
business combination of Licensee, without the prior written consent of Grantor.
Grantor may assign its rights hereunder to any person provided that such person,
either expressly or by operation of law, assumes Grantor's obligations
hereunder. The above notwithstanding, Grantor understands that Licensee is, as
of the effective date hereof, negotiating with several companies for the purpose
of entering into a merger, joint venture, or marketing arrangement specifically
for the purpose of marketing or financing Licensee's efforts in marketing of the
Product. Grantor agrees that as long as the requirements of this Agreement are
fulfilled that Grantor will not unreasonably deny a request to allow Licensee to
enter into the contemplated agreement.

8.10 Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs, and necessary disbursements in
addition to any other relief to which such party may be entitled.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives on the dates set forth beneath their
respective signatures below, to be effective for all purposes as of the date
first above written.

GROWTEX, INC. DAVID R. MORTENSON & ASSOCIATES

BY: BY:
----------------------------- --------------------------------
TITLE:
--------------------------
DATE: DATE:
--------------------------- -------------------------------

EXHIBIT "A"
TERRITORY

Geographic Area:

Exclusive Private Label License for the country of Mexico for agriculture,
mariculture, fish farming, and the like, or for use in aquariums, exclusive of
remediation of petroleum-based hydrocarbon contamination. Licensee may not make
any use of Grantor's or NWT's marks, name, or make any reference to NW
Technologies, Inc. in labeling, packaging, or advertising materials of any kind.
Grantor agrees to inform by letter all existing Licensees that exclusive
marketing, distributing, and production rights have been granted to the
Licensee, and to upon request, furnish copies of such letters to the Licensee.
Grantor agrees to exclude the above-mentioned rights from future contracts it
may issue to other Licensees.

Licensees Obligations to Grantor: Licensee agrees to minimum purchase
requirements as shown in Exhibit "C".

Accepted: NW TECHNOLOGIES, INC.

By: /s/ C.E. Kaiser
-------------------------
C.E. Kaiser, Chairman

EXHIBIT "B"

Products Included in This Agreement

The product Biocatalyst is the only product included in this Agreement subject
to provisions of the Agreement.

The product Biomas in included herein only if a license to product the Product
is granted to Licensee in accordance with the terms and conditions contained
herein.

Prices: The initial price to Licensee for the Product Biocatalyst is $2.00 per
gallon in 2,000 gallon quantities to be packaged in a bulk container furnished
by Licensee. The suitability of the bulk container to receive and transport the
Product is, and will remain, the responsibility of Licensee.

EXHIBIT "C"

PURCHASE OBLIGATIONS

<S> <C>
1/st/ 6 months $ 50,000.00

2/nd/ 6 months $ 75,000.00

2/nd/ Year $175,000.00
</TABLE>

Notwithstanding the above, if Licensee shall have purchased the right to produce
as outlined in Section 4.01 of this Agreement, Licensee shall have no purchase
requirement.

EXHIBIT "D"

PAYMENT TERMS

The payment terms relating to this Agreement are cash in advance.

EXHIBIT "E"

CONFIDENTIALITY AGREEMENT

WITNESSETH:

This Agreement by and between NW Technologies, Inc., a Texas corporation with
its principal offices located at 5817 Centralcrest, Houston, Harris County,
Texas 77092 (herein "NWT") David R. Mortenson & Associates, with its principal
office located at P.O. Box 5034, Alvin, Brazoria County, Texas 77512 (herein
"Mortenson"), jointly hereinafter referred to as "Discloser"; and Growtex, Inc.
a Nevada corporation with principal offices at P.O. Box 5034, Alvin, Brazoria
County, Texas 77512-5034 (Herein "Disclosee") is made and entered into this
2/nd/ day of April, 1999.

WHEREAS, NWT has developed proprietary know-how in its products marketed
under the trade name "Natures' Way" and "Biocatalyst"; and other trade names
from time to time; and;

WHEREAS, NWT has proprietary rights to trade dress, trademarks, and designs
for the brand name "Nature's Way", "Biocatalyst", "The Environmental Solution",
manufacturing processes and procedures, application processes and procedures,
and;

WHEREAS, NWT has entered into an exclusive marketing agreement with
Mortenson to market its product Biocatalyst under their own brand names,
including among others, "OxyMax", "O-Max", "OMax", "Oxy-Ice", "O-Gel", "OGel"
for agricultural use;

NOW THEREFORE, in consideration of the mutual covenants set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Discloser and Disclosee agree as follows:

1.0 ANALYSIS OF SAMPLES OR PRODUCT: Parties hereto agree that Disclosee
will not analyze (chemically or otherwise) or cause to be analyzed any of NWT's
BioCatalyst product, except as specifically required by state or federal
statute, regulation, common law, or court order. No such analysis of Biocatalyst
shall be made without 10 days' advance written notice to NWT, and NWT shall be
responsible for and pay for any deviation from the testing protocol that may be
required by NWT.

2.0 CONFIDENTIALITY OF INFORMATION: Parties hereto acknowledge that they
will have access to confidential, specialized, and proprietary information and
trade secrets of NWT not generally known to the public which are the proprietary
information of NWT. Parties hereto agree that the Confidential Information
revealed to them is a valuable proprietary interest of NWT and that they are
obligated to maintain the confidentiality of the Confidential Information so
revealed. The Parties hereto agree that they will not disclose or authorize any
other person to disclose, publish,

disseminate or use the Confidential Information, and will treat all Confidential
Information in a confidential manner. The Parties hereto acknowledge that NWT
would be irreparably harmed by the unauthorized use of the Confidential
Information herein referred to.

3.0 GOVERNING LAW: This agreement and any questions concerning its
validity, construction and performance shall be governed by the laws of the
State of Texas, U.S.A., with venue in Harris County, Texas.

4.0 ENTIRE AGREEMENT: This agreement is the entire agreement between the
parties with respect to the subject matter hereof and may not be altered or
modified except by an agreement in writing signed by the parties hereto.

5.0 NO WAIVER: No failure or delay by any party hereto in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof or the exercise of any right, power or
privilege.

6.0 AMENDMENT: This Confidentiality Agreement may not be amended or
modified except by an instrument in writing signed on behalf of the parties
thereto.

7.0 SEVERABILITY: Any provisions hereof prohibited by or unlawful or
unenforceable under any applicable law of any jurisdiction shall be ineffective
as to such jurisdiction, without affecting any other provision of this Agreement
or in any other jurisdiction.

8.0 ATTORNEYS' FEES: If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs, and necessary disbursements in
addition to any other relief to which such party may be entitled.

NW TECHNOLOGIES, INC. GROWTEX, INC.

BY: /s/ BY: /s/
---------------------------- -------------------------------
C.E. Kaiser, Chairman David R. Mortenson, President

DATE: 4/5/99 4/5/99
-------------------------- -------------------------------

DAVID R. MORTENSON & ASSOCIATES

BY: /s/ Date: 4/5/99
---------------------------- -----------------------------
David R. Mortenson

EXHIBIT F

SHARE DISTRIBUTION SCHEDULE

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Member Address SSN No. of Shares
to be issued
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
David R. Mortenson P.O. Box 5034 [*] 200,000
Alvin TX 77512-5034
- ---------------------------------------------------------------------------------------------------------------------
Terry Fowler 545 Teal Dr [*] 200,000
Dickinson TX 77539
- ---------------------------------------------------------------------------------------------------------------------
Joshua J. Mortenson 808 Cemetery Rd [*] 200,000
Alvin TX 77511
- ---------------------------------------------------------------------------------------------------------------------
Laurent R. Barbudaux 735 International Blvd [*] 200,000
#111
Houston TX 77024
- ---------------------------------------------------------------------------------------------------------------------
Marie M. Charles P.O. Box 34830 [*] 200,000
Houston TX 77034
- ---------------------------------------------------------------------------------------------------------------------
C. E. Kaiser 10220 Memorial Dr #67 [*] 200,000
Houston TX 77024
- ---------------------------------------------------------------------------------------------------------------------
Roy Donovan Hinton Jr.P. P. O. Box 4456 [*] 200,000
Pasadena TX 77502
- ---------------------------------------------------------------------------------------------------------------------
James R. Collins, D.V.M. 7716 Windswept Lane [*] 200,000
Houston TX 77063
- ---------------------------------------------------------------------------------------------------------------------
Jock R. Collins, D.V.M. 7627 Skyline Drive [*] 200,000
Houston TX 77063
- ---------------------------------------------------------------------------------------------------------------------
Joshua D. Smetzer 2101 Mustang Rd [*] 200,000
Apt 113
Alvin TX 77511
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

-10-

* Information omitted and filed separately with the SEC pursuant to request for
confidential treatment under Rule 406 under the Securities Act of 1933, as
amended.

<PAGE>

AMENDMENT NO. 1
TO

LICENSE AGREEMENT

This AMENDMENT NO. 1 TO LICENSE AGREEMENT ("Amendment No. 1") dated May __,
1999 is by and between David R. Mortenson & Associates, a Texas general
partnership ("Grantor"), and Growtex Inc., a Nevada corporation ("Licensee").

WHEREAS, Grantor and Licensee are parties to that certain License Agreement
(the "Preexisting Agreement") dated as of April 5, 1999 and attached to the
minutes of the April 28, 1999 meeting of the Company's Board of Directors,
granting Licensee an exclusive private label license for the Biocatalyst and
Biomas products in Mexico; and

WHEREAS, Grantor and Licensee wish to confirm, clarify and modify certain
terms of the License Agreement;

NOW THEREFORE, the parties hereto agree as follows:

1. Definitions; References.
-----------------------

Capitalized terms not defined in this Amendment No. 1 shall have the
meanings given them in the Preexisting Agreement. References in the Preexisting
Agreement and this Amendment No. 1 to the "Agreement" shall refer to the
Preexisting Agreement as amended by this Amendment No. 1, and words such as
"herein", "hereinafter" or other words of similar import shall likewise be
construed as referring to the Preexisting Agreement as amended by this Amendment
No. 1.

2. Confirmation of Agreement.
-------------------------

This Amendment No. 1 amends the Preexisting Agreement. Terms of the
Preexisting Agreement not amended by this Amendment No. 1 continue in full force
and effect, and are hereby ratified and confirmed by the parties.

3. Preexisting Agreement.
---------------------

Amendment No. 1 to License Agreement
Page 1 of 3
<PAGE>

The Preexisting Agreement supersedes and replaces in its entirety any prior
License Agreement (a "Superseded Agreement"), by and between Grantor and
Licensee. Any Superseded Agreement is null, void, of no force or effect, and
each party hereby releases, if any, its rights, or any obligations of the other,
thereunder.

4. Termination for Convenience.
---------------------------

At the end of paragraph (a) of the first Section 2.02 of the Preexisting
Agreement, the following sentence is added: "This Agreement may be terminated by
Licensee upon the giving of notice as herein provided."

5. Licensee's Control Over Business.
--------------------------------

A new Section 5.06 is added: "5.06 Licensee's Control Over Business.
Licensee shall establish the means by which it satisfies its obligations under
Sections 5.01 and 5.05. Grantor shall have no right to enforce, and no action
shall accrue under, such provisions until this Agreement shall have been in
force for more than one year and Licensee shall have failed to meet its minimum
purchase requirements set forth in Exhibits A and C."

6. Minimum Purchase Requirements.
-----------------------------

The Purchase Obligations set forth on Exhibit C are hereby modified so that
Licensee's minimum purchase requirement shall be $125,000 for the 1/st/ Year,
rather than $50,000 and $75,000 for the 1/st/ 6 months and the 2/nd/ 6 months,
respectively. In addition, the following sentence is hereby added after the last
sentence on Exhibit C: "Grantor shall have no right to enforce, and no action
shall accrue in respect of, Licensee's Purchase Obligations until this Agreement
shall have been in force for more than one year."

Amendment No. 1 to License Agreement
Page 2 of 3
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.

GRANTOR: LICENSEE:

DAVID R. MORTENSON & ASSOCIATES GROWTEX INC.

/s/ David R. Mortenson /s/ David R. Mortenson
- ------------------------------- -------------------------------
By David R. Mortenson By David R. Mortenson
Its General Partner Its President

Amendment No. 1 to License Agreement
Page 3 of 3

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Accountants On
Accounting And Financial Disclosure" and "Interests Of Named Experts And
Counsel" and to the use of our reports dated September 22, 1999, in the
Registration Statement (Form S-1 No. 333-82633) and related Prospectus of
Growtex Inc. for the registration of shares of its common stock.

Our audit also included the financial statement schedule of Growtex Inc.
This schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion, the
financial statement schedule referred to above, when considered in relation to
the basic financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.

Vancouver, Canada
September 22, 1999

/s/ Elliott, Tulk, Pryce, Anderon
- ---------------------------------
Elliott, Tulk, Pryce, Anderon
CHARTERED ACCOUNTANTS