JET SET LIFE USA INC, 10KSB/A, 2000-08-07

JET SET LIFE USA INC
10KSB/A, 2000-08-07
INVESTORS, NEC

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FORM 10-KSB/A
AMENDMENT NO. 1

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 {FEE REQUIRED}

For the fiscal year ended June 30, 1999

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 {NO FEE REQUIRED}

For the transition period from to

Commission File No. 33-18461

JET SET LIFE USA, INC.
--------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 75-2195575
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State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization

21935 Van Buren, Suite 4, Grand Terrace, California 92313
--------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (909) 783-1800

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

Securities registered pursuant to Section 12(g) of the Act: Common
Stock - $.0001 par value per share

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

State Issuer's revenues for the June 30, 1999 fiscal year: $177,897

Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure
will be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-KSB or any amendment. [X]

The aggregate market value of the common voting stock held by
non-affiliates as of June 30, 1999: Not Determinable.

Shares outstanding of the Registrant's common stock as of June 30, 1999
66,256,792 shares.

<PAGE>

TABLE OF CONTENTS

PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ITEM 1. Description of Business . . . . . . . . . . . . . . . 1
History of Business . . . . . . . . . . . . . . 1
Narrative Description of JSLT . . . . . . . . . 3
Product Description . . . . . . . . . . . . . . 4
Growth Strategy . . . . . . . . . . . . . . . . 10
Dealer Referral Plan . . . . . . . . . . . . . 10
Racing Results . . . . . . . . . . . . . . . . 11
Advertising . . . . . . . . . . . . . . . . . . 13
Trade Shows . . . . . . . . . . . . . . . . . . 13
Overseas Markets . . . . . . . . . . . . . . . 14
Competition . . . . . . . . . . . . . . . . . . 15
Risk Factors. . . . . . . . . . . . . . . . . . 15
Subsequent Events . . . . . . . . . . . . . 15
Exclusive Territory Dealership Program . . . . . . . 17

ITEM 2. Properties . . . . . . . . . . . . . . . . . . . . . . 19

ITEM 3. Legal Proceedings . . . . . . . . . . . . . . . . . . 19

ITEM 4. Submission of Matters to a Vote of Security Holders . 20

PART II

ITEM 5. Market for Registrant's Common Equity and Related . . 20
Stockholder Matters . . . . . . . . . . . . . . . . 20

ITEM 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . 21

ITEM 7. Financial Statements . . . . . . . . . . . . . . . . 25

ITEM 8. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure. . . . . . . 25

PART III

ITEM 9. Director and Executive Officers . . . . . . . . . . . 26

ITEM 10. Executive Compensation. . . . . . . . . . . . . . . . 28

ITEM 11. Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . 29

ITEM 12. Certain Relationships and Related Transactions. . . . 29

PART IV

ITEM 13. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K . . . . . . . . . . . . . . . . . . . . 30

Signatures. . . . . . . . . . . . . . . . . . . . . . 31

<PAGE>

FORWARD LOOKING STATEMENTS

THIS ANNUAL REPORT ON FORM 10-K, IN PARTICULAR "ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS" AND "ITEM 1. BUSINESS," INCLUDE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 21E OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE STATEMENTS
REPRESENT THE COMPANY'S EXPECTATIONS OR BELIEFS CONCERNING, AMONG
OTHER THINGS, FUTURE REVENUE, EARNINGS, AND OTHER FINANCIAL
RESULTS, PROPOSED ACQUISITIONS AND NEW PRODUCTS, ENTRY INTO NEW
MARKETS, FUTURE OPERATIONS AND OPERATING RESULTS, FUTURE BUSINESS
AND MARKET OPPORTUNITIES. THE COMPANY WISHES TO CAUTION AND
ADVISE READERS THAT SUCH STATEMENTS, WHICH MAY BE IDENTIFIED BY
WORDS INCLUDING "ANTICIPATES," "BELIEVES," "INTENDS," "ESTIMATES,"
"EXPECTS," AND SIMILAR EXPRESSIONS, ARE ONLY PREDICTIONS OR
ESTIMATIONS AND ARE SUBJECT TO KNOWN AND UNKNOWN RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THE EXPECTATIONS AND BELIEFS CONTAINED HEREIN.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Jet Set Life USA, Inc. (the "Company") manufactures and sells
automotive related products direct to the consumer through the
Internet and retail dealers. Purchasers of the Company's products
vary from ordinary car owners to those specializing in building race
cars and racing engines, as well as automotive parts supply dealers,
motorcycle dealers, boat dealers, garages, service stations, and car
and truck Dealers.

The Company specializes in manufacturing and distributing products
which, will improve horsepower and performance of any internal
combustion engine. The Company believes, and automotive dynamometers
and test equipment shows, that all the Company's products also
lower emissions and harmful air pollutants, while still providing
increased fuel economy and reduced internal engine wear.
(See description of each individual product)

HISTORY OF BUSINESS

Jet Set Life USA, Inc. (the "Company") was organized as
a Delaware corporation on February 17, 1987, under the name
"Caravel Corporation" to be a publicly-held shell corporation
available to be combined with a privately-held Company that desired
to become publicly-held without offering its own securities to the
public. The Company had no business operations and had no planned
business activities except for the identification of and merger
with a privately-held Company.

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The Company was a wholly-owned subsidiary of ANova
Ventures Corporation ("ANova") until April 11, 1987, the
declaration date of a dividend of the Company's securities,
consisting of common stock and warrants to purchase common stock,
to the stockholders of ANova. On December 31, 1987, Liberty
Military Sales, Inc. merged into ANova and ANova's name was changed
to Liberty Military Sales, Inc. On March 10, 1989, the Company
acquired Jet Set Life, Inc., a privately-held Nevada Corporation
in a business combination accounted for as a reverse recapitalization.
Jet Set Life, Inc. became a wholly owned subsidiary of the Company
through the exchange of shares of the Company's common stock for
all the outstanding stock of Jet Set Life, Inc.

After the transaction, the shareholders of Jet Set Life, Inc. owned
the majority of stock in the Company and management of Jet Set
Life, Inc. became management of the Company.

As part of the stockholders' meeting approving the acquisition of
Jet Set Life, Inc., the stockholders' approved a 6 for 1 forward
stock split and the name changed from Caravel Corporation to Jet
Set Life USA, Inc. (The Company)

Thereafter the Jet Set Life USA Subsidiary, Jet Set Life, Inc.,
engaged in network marketing with two (2) programs: a nutrition
and weight loss products line and a video-audio subliminal
reprogrammer (VSR). Jet Set Life, Inc. was unable to obtain a
consistent source of VSRs for sale due largely in part to flaws in
the electronic components for the VSR.

The Subsidiary, Jet Set Life, Inc. was not able to succeed
financially and on November 15, 1990, it filed a Voluntary Petition
for relief under Chapter 7 of the United States Bankruptcy Code
with the U.S. Bankruptcy Court for the District of Central
California (the "Bankruptcy Court"). As a result of the
bankruptcy proceeding, the Subsidiary ceased to exist on March 1,
1991.

The Company did not engage in any business from June 1990 until
1996.

On June 30, 1996, the Company acquired Jet Set Life
Technologies, Inc., a privately held Delaware corporation ("JSLT")
in a business combination accounted for as a pooling of interests.
JSLT became a wholly-owned subsidiary of the Company through the
exchange of shares of the Company's common stock for all the
outstanding stock of JSLT. After the transaction the shareholder of
JSLT owned the majority of stock in the Company. JSLT was founded
and wholly-owned by George W. French, who is president, a director
and controlling shareholder of the Company and was prior to the
acquisition of JSLT.

The Company has several wholly-owned foreign subsidiary
corporations who engage in the distribution of all the Company's
products. The Company operates subsidiary corporations in the
U.S., Canada, UK, New Zealand, and Australia, as well as having
independent distribution channels in Germany, Austria, Netherlands,
Singapore, Taiwan, Estonia, Mexico, Puerto Rico, and the Bahamas.

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NARRATIVE DESCRIPTION OF JSLT

JSLT was started by George W. French in the summer of 1993 with two
products, a magnetic gasoline and diesel fuel treatment device and
an oil additive, both of which were purchased from outside sources.
JSLT subsequently acquired the rights to a catalytic cartridge
fuel saving device from a third party and a magnetic fuel saving
device from its President. JSLT combined these new technologies
into their product, the Triple Charger, which management believes
has the ability to treat gasoline or diesel fuel as it passes
through the device on its way to the engine combustion chamber in
such a way that mileage is increased, and emissions are decreased.

The driving public, both individual and commercial, composed the
principal market for the products and services of JSLT. JSLT chose
direct sales through a multi-level marketing network of independent
distributors as the means to sell its products. During 1999, JSLT
shifted from multi-level marketing to retail sales. JSLT has since
acquired distribution rights to a new and improved motor oil
additive, it has named Oil Extreme.

None of JSLT's products are covered by patents, but are produced
under conditions of trade secrecy.

The Company was originally started as a direct sales/network
marketing Company utilizing a group of independent
distributors whose purpose was to retail the Company's Triple
Charger fuel saving device to friends, relatives, and commercial
accounts such as trucking companies, automobile fleets, and
manufacturers who used oil and grease in their equipment.

The Company grew to over a million dollars in sales during
the first three years of operation using this marketing
method. The opportunity to acquire the rights to market a new
calcium carbonate Extreme pressure oil additive that was far
superior to the chlorinated paraffin based additive the Company had
been selling was studied over a several month period. Even though
the oil technology was clearly a superior product it was felt that
a change in product technology could slow sales while the Company's
distributors learned about the new benefits.

Finally, management decided that the future of the new technology
far outweighed the chlorinated additive it was using. Even though
the old product worked well, it used the same chlorinated
ingredients most of the other oil additive manufacturers used, and
are still using. One of the drawbacks of this old technology was
the harmful corrosive effects the chlorine produced.

In recent months the decision to change to the new calcium
carbonate technology proved correct.

Various after-market oil additive companies who have been using
chlorinated ingredients have come under fire from the Federal Trade
Commission for making unsubstantiated claims for their products.
Since most of the companies are using the same highly corrosive
ingredients it is very hard for them to defend against the

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Government's lawsuits. For two years some companies advertised
heavily on television almost every night. Now you rarely see their
30 minute infomercials.

One competitor who was using a questionable ingredient,
PTFE in their additive was fined $10,000,000 by the Federal Trade
Commission.

Even though management now had an oil technology it could
explain, and defend itself against any claim of being just
another snake oil, the independent distributors did not like the
change because they now had to go back to all their customers and
resell them on the new technology.

This change not only slowed sales for the Company's oil products
but for the Triple Charger as well. The Triple Charger,
EX-3s, suggested retail price of $229.00, and the model for large
diesel trucks the DX-3s suggested retail price of $799.00, are both
sold as a package with Oil Extreme. Even though the oil additive
was given free of charge with each Triple Charger. it was felt the
sales drop came because the two products were too closely tied
together.

The best training tools, presentation materials, and oil
training schools the Company devised did not bring the sales
back to where they were before the change to the new calcium
carbonate oil technology. Since the Company was working on an
improved model of the Triple Charger it was felt that the prudent
route to take was to build the confidence in the new oil technology
first, rather than continue heavy promotion of the Triple Charger
until such time as the improved model was finished.

Since the sales for all the Company's products hinged so much
on the Independent sales person's attitude toward them, it
was felt that the Company must gain their confidence in the new Oil
Extreme, but also create a demand for the product from the motoring
public as well as the racing fraternity.

PRODUCT DESCRIPTION

EX-3 TRIPLE CHARGER:

The EX-3 Triple Charger for gasoline or diesel powered cars and
pickup trucks employs two state-of-the-art technologies that work
synergistically to modify the long hydrocarbon chains found in all
gasoline and diesel fuels. This cracking process allows the
molecules to combine more thoroughly with oxygen when the fuel
reaches the air coming through the intake manifold of a vehicle's
engine.

Because of many fuel saving devices sold over the years that didn't
work as claimed, the Company expects skepticism, but a simple smog
check with a four gas analyzer found in most repair shops, will
quickly prove that an engine is burning cleaner. Some vehicle
owners experience a drop in hydrocarbons as much as 70% to 90%, and
sometimes they even drop to 0. The same is true for carbon
monoxide.

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If an engine is more completely burning the fuel there will be more
horsepower, acceleration, and better fuel mileage. The customer
will not only save money, but they will have the satisfaction of
knowing they are doing their bit to help save the planet from
pollution.

The EX-3 Triple Charger is so effective that each customer
receives a written GUARANTEE they will receive a minimum of 20%
increase in mpg for cars, RV's, pickups, boats, stationary engines,
and small commercial trucks using gasoline, or petrol, and a 15%
increase for the same size vehicles using diesel fuel, if the
Triple Charger is used in conjunction with the Company's Oil
Extreme.

Technology #1

The Triple Charger is installed in the engine's incoming fuel line
the same as an auxiliary fuel filter would. The fuel first passes
through a Catalytic Cartridge containing precise amounts of an
alloy made of precious, semi precious and common metals which have
gone through a proprietary 9 step chemical process. When viewed
under a microscope it can readily be seen that crystals have grown
on all the metal surfaces. Independent laboratory tests prove
that the cetane rating of diesel fuel is raised 7.9% after passing
through the catalytic cartridge. (Cetane in diesel fuel is the
same as octane in gasoline.)

Technology #2

After passing through the catalytic cartridge the fuel next flows
through very powerful magnetic fields which act to break up the
fuel's molecular clumps before they reach the intake.

There has been very little scientific study done on fuel
ionization, however, funding is being sought by one
University in Scotland that will allow them to do an in-depth study
of the Triple Charger, as well as a two year field study.

DX-3 DIESEL TRIPLE CHARGER:

The Diesel Triple Charger is a much larger version of the EX-3
Triple Charger for passenger car and light truck engines
up to 7.9 liters. The DX-3 is designed to be fitted to diesel
engines found in large over-the-road trucks, and offroad heavy duty
equipment such as tractors, and road graders, as well as large
diesel generators.

With so much emphasis being placed on the air pollution being
generated by diesel trucks, the DX-3 Triple Charger can be an
important aid in reducing the smoke opacity and pollutants
generated by these engines. The Company guarantees a 15% increase
in fuel mileage when the DX-3 Triple charger is used in conjunction
with its Oil Extreme.

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OIL EXTREME CONCENTRATE:

The third member of the Triple Charger team is Oil Extreme, an oil
concentrate so powerful and effective that only 1 ounce is needed
per quart of regular oil.

Oil Extreme Concentrate is a totally new technology which gives
Extreme pressure qualities to oil. By manipulating the molecules
of Calcium Carbonate, an ingredient found in all motor oils, enough
Calcium Carbonate can be added to Oil Extreme so it has a TBN
(Total Base Number) of 320.

When just 1 ounce of Oil Extreme is added to a quart of regular
motor oil, the TBN of the oil is raised to 18, far above the normal
7 to 8. TBN determines how well an oil can counteract the acids
produced by normal combustion.

This extra Calcium Carbonate gives a greater alkaline reserve, but
under high heat and pressure, fills the asperities, or microscopic
valleys found in all metal surfaces. Under boundary lubrication
conditions, such as high heat, cold starts, quick acceleration,
heavy load, and high RPMs, the regular protective oil film is
broken through, and metal to metal contact is experienced.

The University of Bristol, in England says that their new measuring
techniques show that only 10 to 20% of an engine's metal surfaces
come in contact during boundary lubrication conditions.

By filling the asperities in the metal's surface with a hard
calcium carbonate tribochemical film, the forces on all metal parts
are spread over an 8 to 10 times larger surface area. Spreading
the force over a larger area reduces friction and wear by the same
amount.

To the Company's knowledge Oil Extreme is the first oil or oil
concentrate in the world with this new and powerful way of
providing extreme pressure qualities, extremely low friction, and
extremely high alkaline reserves. Even the big oil companies have
not been able to provide these important qualities in any oil they
produce, whether synthetic, racing oil, or regular motor oil.

The Company believes Oil Extreme will at least double the life of
an engine, extend oil drain levels two to three times, and all at a
very competitive price of just $35.95 Suggested retail for 16
ounces. The Company expects that the oil majors may some day
discover how to overbase calcium carbonate without it precipitating
out of the oil thereby causing extremely high wear and fouled spark
plugs. It is felt that Oil Extreme has a four or five year lead on
them. In the mean time Oil Extreme is attempting to build a
world-wide brand name and image as a one-of-a-kind quality product
used by racers.

If a major oil Company puts the resources behind research which
could solve the precipitation problem, or if they should find some
other new way of filling the asperities of an engine's metal
surface with a chemical which would withstand the pressures needed
to give extreme pressure properties to oil, the Company feels they
would also have to go through the long process of convincing the
racing world that their product actually worked. The Company
expects the major oil companies to find it simpler to purchase Oil
Extreme Concentrate and use it in their oil.

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OIL EXTREME "BETTER THAN SYNTHETIC" MOTOR OIL:

Many people are confused about motor oil. That may be why many
professional engine builders are hesitant to change to a new brand
of oil. Because they know from experience what works in the
engines they build, many tend to stick to the brand they know best.

There are petroleum based oils, semi-synthetic oils, 100%
synthetic oils, PAOs, and ester based synthetic oil. In the
USA, motor oil can be bought for as little as 89 cents a quart
(liter) up to $11.25 a quart. Some of the choices are, standard,
heavy duty, racing, offroad, and extended life.

To further confuse things, some oil companies talk about
film strength, shear, molecular bonding, multigrade, API
ratings and dynamic lubrication.

Now, the Company claims that Oil Extreme motor oil is better than
synthetic, which generally has the image of being better because it
costs so much more. The following is a brief explanation of why
the Oil Extreme Motor Oil is better than synthetic oils.

Oil Extreme "Better Than Synthetic" Motor Oil is specially
formulated using the new Group II, very highly refined,
hydrocracked and catalytic dewaxed petroleum base oil. This "white
water" base as it is called is so pure that it is crystal clear.
It is processed in special plants built by several major oil
companies, under high temperatures and pressures to remove all the
sulfur, nitrogen and oxygen compounds that normal solvent
extraction processes can't remove.

By eliminating these harmful compounds in the base oil it is
possible to formulate engine oils with oxidation stability equal to
or greater than products based on 100% synthetic oils. They have
excellent thermal degradation properties, and perform especially
well in high-temperature applications like racing.

An API approved standard additive package is added to this special
hydrocracked base stock. Next, the Oil Extreme, extreme pressure,
calcium carbonate additive package booster is integrated. This
further enhances the thermal stability and oxidation properties,
but most importantly it gives extreme pressure capabilities no
other oil in the world has. A small 4 ounce bottle is given free
of charge with each 4 quarts of motor oil. To the Company's
knowledge this is the first time an extreme pressure additive
package booster has ever been given free with motor oil.

Customers using the motor oil in passenger cars can safely drive
4,000 or 5,000 miles, and then rather than changing the oil they
simply add the extreme pressure additive package booster, and then
drive another 4,000 or 5,000 miles before changing oil.

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Racers who use the Oil Extreme "Better Than Synthetic" Motor Oil
are advised to add the 4 ounce additive package booster when they
first change to the motor oil. This gives 2 ounces, or 6% of the
calcium carbonate extreme pressure additive package booster in the
motor oil for use under extreme racing conditions.

When reading the competitor's advertisements they talk about film
strength, but not extreme pressure. The reason they don't mention
it is because they don't have the Oil Extreme calcium carbonate
additive technology.

By filling the microscopic asperities in an engine's metal surfaces
with a hard tribochemical film, the force applied to each
particular engine part can be spread over
a much larger area. This lowers friction and wear dramatically.
Reducing friction produces horsepower! Another breakthrough is the
extremely high TBN (a 320 Total Base Number) that this additive
package has. Just 1% raises the normal TBN of 7 or 8, up to 18.
This means the oil drain intervals can be extended 2 or 3 times
thereby saving the customer money.

Every racer knows there is horsepower to be gained by lowering the
viscosity of their oil. During dynamic lubrication, regardless of
viscosity, there is drag caused by the shearing of the oil's
molecules. With the Oil Extreme tribochemical film there is always
the "micro molecule" ultra thin oil film present. The molecules of
this extremely thin oil attach themselves to the calcium carbonate
molecules and shear first, thereby further reducing friction in a
revolutionary new way.

The result of this new technology, is more horsepower, torque,
lower temperatures, and better mileage, yet longer engine
life. Even under the harshest conditions, to the Company's
knowledge, performance is unmatched by any other oil, whether
petroleum or synthetic.

Some of the major oil companies claim that their hydrocracked base
oil is as good as or in some ways better than synthetic base oils.
The Company uses a standard API approved additive package, the same
as most of the major oil companies use.

However, because the Company then blends the Oil Extreme, calcium
carbonate, extreme pressure additive package booster which they
don't have, the Company can guarantee that the Oil Extreme "Better
Than Synthetic" Motor Oil will produce more horsepower than the
best synthetic or petroleum oils.

GAS EXTREME

Most motorists have bought a bottle of a gas or diesel fuel
additive that promised to give more power, better mileage, and
lower emissions.

If the vehicle was in average condition and not completely carboned
up the customer probably felt nothing. Since miles per gallon
increases can be hard to measure, the consumer just had to have
faith that their money was spent for something that gave them some
unseen and unfelt benefits.

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For many years the consumer has been at the mercy of the
advertising copy writers. Before the Internet became popular,
and so much information was available they had to take a Company's
word that their product would do everything they claimed. Not so
today! By just searching the Internet under "gasoline or diesel
fuel additive" the consumer will find several hundred web sites to
read.

Some companies only give promises and hype, while others give
factual data and comparison charts. One thing the consumer will
quickly learn is that most of the fuel additives all claim they
will do the same things.

But, it's very obvious that 50% No. 2 diesel fuel in one additive,
and 85% plain kerosene in another is not going to do all the
things the companies claimed.

Jet Set Life Technologies, Inc. took as its basic premise, that it
would not sell a gasoline or diesel fuel additive if they could not
develop one that worked in a completely new way. The Company
recently found such a technology being manufactured by a small
Company that had never exploited their basic technology to produce
a gasoline and diesel additive.

The most important feature of Gas Extreme is that the results can
be felt almost immediately, and the same additive can be used in
gasoline as well as diesel fuel.

When other gasoline additives are used the customer usually feels
nothing, since it takes time for the additive to complete its
carbon cleaning action. All it takes to prove Gas Extreme is
different is for the consumer to pour a small 2 ounce bottle into
their tank with 15 gallons of gasoline and most of them will feel
the difference in power and acceleration in a few hundred yards.

Gas Extreme is unique, and has many advantages over products sold
as after market additives. Because these other after market
additives work mainly by cleaning the carbon deposits in an
engine, they do not work in new vehicles. Because Gas Extreme
works in a completely new way that has nothing to do with cleaning
old deposits, it works on new and old vehicles almost immediately.

Gas Extreme is non-toxic and will not cause deposits in diesel
or gasoline engines, and does not contain highly volatile
ingredients, so it can be easily shipped by air as a non hazardous
material.

The important points to remember are that the added power,
the added acceleration, and the added smoothness of the
engine can be felt almost immediately. The added miles per gallon,
and the reduced emissions can be measured almost immediately.
Because Gas Extreme gives better combustion properties to the fuel,
more power is extracted and there are less unburned hydrocarbons
which the catalytic converter must try to burn.

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Each 2 ounce bottle's suggested retail price is just $3.95, about
half what the nearest competitor charges for a small 2 ounce
bottle. Since the Company does not at this time have an exclusive
agreement with the manufacturer of Gas Extreme, it is possible that
the manufacturer might sell the product to some other company. But
at this time, no other company is selling the product.

GROWTH STRATEGY

Because oil and oil additives have such a bad reputation
for claiming outrageous results, the Company, after
careful consideration, decided to take the new calcium carbonate
technology direct to the racing fraternity. It was felt that if
the racer could be convinced that the Oil Extreme technology really
did what the Company claimed, a breakthrough could be made. If it
became known that some of the better drivers were using Oil Extreme
then there would be pressure on every team to use the product so
they could stay competitive.

Since there had been so much bad publicity generated by other
oil additive companies, the Company decided to take itself
out of the oil additive only category.

A new motor oil named, Oil Extreme, "Better Than Synthetic" Motor
Oil was recently introduced. This new motor oil positioned the
Company as an oil Company, instead of an additive Company. This
may sound like a small change but the respect the Company received
was very noticeable.

DEALER REFERRAL PLAN

Another change in the Company's marketing strategy has also
recently been implemented. The network marketing industry has
been coming under increased scrutiny by the Federal Trade
Commission and by many state's Attorneys General. Their aim is to
protect the consumer from fly-by-night pyramid marketing plans
disguised as legitimate multilevel marketing companies.

One of the main features of a pyramid plan is that there may
not be a product with any real value, or if there is a
product the regulatory agencies insist that there be legitimate
retail sales to the general public, instead of just recruiting
someone to participate in the program by claiming that they can get
rich without any selling or any work.

Company's management feels that this is going to become a bigger
issue in the future so they decided to allow the independent
distributors to also set up regular automotive type retail
stores as dealers. Since these racing retail dealers and
engine builders have their own retail customer base it is felt that
the retail sales will be easier because our products were
recommended by someone they trusted. Once the customers actually
see the results from using the Company's products, sales should be
steadier than retail sales from TV or discount stores where there
is little personal contact with any sales person who really knows
all about the product and its benefits.

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By allowing these specialized automotive type dealers
to stock the Company's products and recommend them to their
customers, the retail customer base should easily qualify for FTC's
retail sales requirements.

The Company's "dealer referral plan" still pays out the
same commissions and over-rides when the retail dealer refers
another retail dealer, however, the emphasis to the dealer is not
the money making potential, but how good the products are. This
type of sales program is not a fast way to gain sales, because each
dealer must experience for themselves that the claims the Company
makes are indeed true. Sometimes it takes a whole racing season
for the dealer to see that the wear was really reduced and
performance increased.

These dealers are by and large racing professionals and they
do not change oil suppliers quickly, or suddenly start adding
an oil additive to a $50,000 engine. However, once they are
convinced of the benefits they should be loyal customers and sales
people.

Since these professional racing people are skeptical of new
products claiming to raise horsepower and reduce wear the Company
knows this is the slow way to build the Company's sales, but it is
one that management feels is the sure way, since they are almost
alone using this method.

RACING RESULTS

One of the biggest success stories the Company has achieved
is the results realized at the 1999 Indianapolis 500 race.

The Company's President contacted several Indy Racing League
teams about using Oil Extreme in their race cars for the
world famous Indy 500. As time got shorter and shorter before the
race the Company ended up with only one team who were willing to
use the Oil Extreme Concentrate in their car for qualifying and in
the 500 mile race. Treadway Racing from Indianapolis, Indiana
decided to use the concentrate for qualifying on Saturday the week
before the race.

The Indianapolis race is the only race in the world where
the whole month of May is taken to get ready for the 500 mile
race. This is such a big and important event that winning the pole
position pays the driver over $200,000.

Arie Luyendyk, a former winner of the Indy 500 race was driving
the #5 Treadway Racing car. During the previous two weeks
in practice the car was always about 1 mile per hour slower than
the fastest car. On qualifying morning 2 ounces of the Oil Extreme
Concentrate was added to each quart of their motor oil. Only
three laps with the Oil Extreme additive was allowed before the
track was closed for time trials. When it was Arie Luyendyk's turn
to qualify he ended the four laps with a very fast miles per hour
average. This speed held up for the whole time trials, which gave
him the pole position. Pictures by the thousands were taken of
Arie, and the Oil Extreme sticker on the nose of the car.

<PAGE>
-11-

This was unbelievable first time luck for the Company, as
some teams have tried for many years to win the pole position
and have never accomplished it. During the race, Arie easily lead
after each pit stop for fuel, or because of accidents. The TV
announcer stated several times that Arie was 4 miles per hour
faster than the 2nd place car. With Arie in the lead and the race
over half way through, he had an altercation with a slower car and
crashed into the outside wall, completely wrecking the car. The
Company's contract with Treadway Racing gives the Company 18 months
to use Arie's picture in Company advertising and promotion.

Another major racing success story was the sponsorship of
Jeff Simmons, who was racing in the Barber Dodge Pro Racing
Series. Jeff was last years winner of the Barber Dodge Pro Series,
and rookie of the year, so he came to the Company with good
credentials. For the 1999 season Jeff's car sported a very large
15"X30" Oil Extreme sticker on the side pod. Jeff was leading the
points standing on June 30, 1999, the end of the Company's fiscal
year covered by this filing. (See Subsequent Events for further
results)

In addition to these two outstanding successes, the Company
also sponsored the Formula 600 Championship series in
England during the 1998 season. The season Championship was won by
James Pickford who used Oil Extreme for the whole season and he won
each of the 13 races. Each car in the series sported the Oil Extreme
logo and much national publicity and recognition was gained for the
Company in the English motor press and from the events which were
televised.

Another outstanding racing success story was produced by
Fritz Wagerer, from Austria. Fritz won his BMW class in the
1998 and 1999 24 hour race at the Nurburgring in Germany. This is
one of Europe's most prestigious races and gained valuable exposure
for Oil Extreme on the Continent.

During the 1998 racing season Oil Extreme also gained TV
exposure in the USA by being one of the series sponsors in the
Formula One PROP Powerboat racing series. The Oil Extreme logo
appeared on the hull of all boats in the series, and was mentioned
prominently on ESPN TV each race. The Company also sponsored the
Lamb Racing boat driven by Jason Campbell. Jason won two races
which gained even more exposure for Oil Extreme.

During the 1998 and 1999 racing season numerous races were
won by the Company's customers who used Oil Extreme in road
racing, drag racing, circle track dirt and pavement racing, super
speedway racing and on the water. The type of vehicles raced were
Go Karts, Motorcycles, boats, and cars of many different types. In
most cases the racing vehicles sported the Oil Extreme stickers.
Most of this valuable exposure came about with very little cash
<PAGE>
-12-

outlay. Shares of stock were traded for the sponsorships in some
of the larger events, and in many cases the competitors advertised
Oil Extreme for just being given free oil or oil concentrate. Many
customers purchased the products and were glad to run the stickers
just because they liked the products. The USA, England, Germany,
Australia, Canada, and New Zealand all had extensive racing
promotions and many racing success.

ADVERTISING

In 1998 one automotive magazine was used to test the effectiveness
of consumer advertising. A full color, full page ad was
contracted for in Grassroots Motorsports magazine. The Company
felt the ad was well prepared and attractive, and gave more
information that should have appealed to the grassroots type racer
than any oil Company competitor's ad. However the results were
very disappointing, which proved to the Company that just magazine
advertising was not the way to go. The results had nothing to do
with the magazine or its circulation, for when the magazine ran a
small note saying the magazine editor had used the Oil Extreme
Concentrate and it gave extra horsepower on the dynamometer, the
phones started to ring, and 90% of the calls resulted in orders.

One or two other ads were tried in different magazines
along with new product announcements, but the results were about
the same. It was determined that stories by the magazine were what
got results. But, getting stories placed is not easy. There is
several months of lead time, and it isn't easy to get a magazine to
write a story showing that the Company's product outperforms the
products from a large advertiser. This is especially true when the
Company does not have the funds to buy advertising space in the
large circulation magazines.

However, even purchasing advertising space does not guarantee that
editorial copy will be written.

Sending oil, and Oil Extreme Concentrate to the editors has
helped some in getting more interest in doing stories,
especially those showing dynamometer results. It is the Company's
plan to continue to work with editors and technical writers, and to
place as much Oil Extreme as possible with magazines so that they
can prove to themselves that Oil Extreme does everything the
Company claims. The Company has been working with several
automotive writers who have proven to themselves that Oil Extreme
produces horsepower. It is expected that more and more stories
will be appearing in the coming months. In the mean time racing
results do get published in the press, and the Oil Extreme logo is
getting seen more often.

TRADE SHOWS

Another way the Company has been successfully promoting
its products is to purchase display space at several automotive
trade shows. The PRI (Performance Racing Industry) show has been

<PAGE>
-13-

attended for the last three years. A professional display has been
purchased and set up at each show, and Company personnel along with
usually three or four of the Company's distributors have manned the
display. Products have been sold, and samples given away free to
racers and engine builders. Some very good results have been
achieved by the users, but it sometimes takes months of waiting
before the product is actually tried.

The SEMA (Automotive After Market) show in Las Vegas has
been attended for two years, the motorcycle dealers show in
Indianapolis has been attended for three years, and the motorcycle
speed week show in Daytona Beach, Florida has been attended one
time, and the International Autosports show in Birmingham, England
has been attended three times. The Company intends to continue
this means of meeting face to face with the automotive industry
distributors, dealers, racers, and engine builders.

OVERSEAS MARKETS

Our offices in Canada, the UK, Australia, and New Zealand all
experienced the same drop in sales when the Company
changed to the new Oil Extreme. Because of the drop in revenue it
was necessary to find new management who could work part time to
build sales back up. In each area we found excellent individuals
who could work on a percentage of sales instead of on salary.

Most of the individuals were connected to the racing industry and
continued to promote our products to engine builders and racers.
Excellent results are still being achieved and sales are slowly
on the rise. There is a ready market for Oil Extreme and Gas
Extreme, once confidence in the products are experienced.

COMPETITION

As government regulation gets tougher and tougher
regarding unsubstantiated claims for oil and oil additives, Company
management feels that competition will get less
and less. The standard way for additive companies to enter the
market is for them to air 30 minute TV infomercials. Their main goal
is to get brand recognition on TV, which they then expect to use to
gain access to store shelves.

Company after company have gone this route. Go to any
discount store and look in the automotive department. There they
all sit on the store's shelves. Each competing with each other for
shelf space and customers. Each company has milked the TV
infomercials dry, to the point that they no longer pay for
themselves. However, the companies have achieved what they set out
to accomplish. They have their products on store shelves.

Now, they all sit there with little consumer advertising, having
to compete with each other, and most of the products are all
using the same corrosive chlorinated ingredients.
With the government cracking down on claims they can make, and the
big discount stores not paying for the products for 3 or 4 months,
and having the right to send the product back if it doesn't sell,
some companies are finding themselves in bad shape.

<PAGE>
-14-

Our distribution method is much slower, but one the Company feels
will make us stronger in the long run.

RISK FACTORS

Even though the price of oil has gone up in recent months the
Company has not had to raise its prices. The profit
margins have been cut somewhat, but not enough to have to raise
prices.

Oil supplies, standard additive packages, and calcium
carbonate used in the oil are still plentiful. If prices do have
to be raised, Company management feels because of Oil Extreme's
unique features that sales would not be impaired very much.

If oil supplies were to be drastically in short supply
it could adversely affect the Company's ability to grow, and to
supply its present dealers and distributors. Even though oil
prices are going higher, all indications are that an OPEC accord
may be negotiated soon.

SUBSEQUENT EVENTS

Jeff Simmons won the Barber Dodge Pro Series Championship
for an unprecedented 2nd consecutive time.

Each of the 12 races were televised on ESPN2 and each
race was shown 4 times in the USA. ESPN2 is also shown overseas
and the Company had reports that the Oil Extreme logo was clearly
seen as far away as New Zealand. Again, the Company's luck had put
the Oil Extreme logo on just the right car to gain maximum exposure
for the product and the Company.

There are tracking companies who record the number of seconds a
Company's logo or brand is seen on national TV. Even though
the Company did not subscribe to this service, by having the Oil
Extreme sticker on the car driven by the points leader, and who won
several races during the season, it insured that the television
camera was being focused on the car a big percentage of the time.
The TV announcer mentioned many times that Jeff was driving the Oil
Extreme car, which called added attention to the product.

For the 2000 Barber Dodge pro racing season, the services of Nilton
Rossoni, an 18 year old Brazilian young man who won two of the
1999 races has agreed to sponsorship by the Company.
The large Oil Extreme sticker will be displayed on his car and on
one other car. This will give Oil Extreme exposure for another year.

A contract was signed with the Jim Russell Driving School
in England, which made Oil Extreme the official oil product for the
driving and racing school. The Jim Russell school is the oldest
racing school in the world and has trained some of the world's best
known racing drivers. The school which is presently owned by Mr.
John Kirkpatrick, himself a well known former racer, and who has
worked for the school for 20 years has agreed to use and promote
all the Oil Extreme products in their racing series and in all
their training cars which number around 36 cars.

<PAGE>
-15-

All the Jim Russell cars will sport the Oil Extreme
stickers and all publicity for their race series will identify
Oil Extreme as the series sponsor. On January 12 to 15, 2000 the
Jim Russell Driving School will have a display at the International
Autosports Show in Birmingham, England, and they have invited the
Company's President, George French, to attend the show and to make
use of their display area to promote Oil Extreme's products. John
Kirkpatrick has agreed to take George to Racing Industry functions
and to introduce him to many leaders in the automotive and racing
industry.

The International Autosports Show is one of Europe's largest
racing shows and is attended by most major racing and
automotive industry leaders and racers. Even though Oil Extreme
has attended the show in three previous years, and displayed the
Company's products in their own display area, results were limited
because the show was so big and the Company, being newcomers to the
industry in England, did not have anyone of John Kirkpatrick's fame
to introduce, or recommend them to leaders in the racing
fraternity.

The Jim Russell Driving School in England, will also be
active distributors of all the Company's products at their new
Company headquarters, and racing home track in Rockingham, England,
which is due to open the middle of 2,000. This new Rockingham,
1 1/2 mile banked, and paved oval is the first super speedway to be
built in Europe.

While there are many such tracks in the USA this will be the first
one to be built in England, and it has already gained press
coverage worldwide. The new facilities will also contain several
road racing configurations in the infield which will be used for
various racing events as well as for the Jim Russell Driving
School. Oil Extreme will be highly visible at this new
$80,000,000 track that will eventually accommodate 130,000
spectators for a race, and accommodate them in first class style.

A venture of this magnitude has brought together leading
corporations in computing, telecommunications, health and safety,
engineering and transportation, all committed to Rockingham's
development. And there in the midst of some of Europe's largest
and best known corporations will be Jet Set Life USA, Inc. and Oil
Extreme. An association of this type is usually reserved for the
world's leading oil companies, but because we first, offer an oil
which will cut down on engine wear in the racing school's 36 cars,
and because we have a product the racing school can be proud to
promote, the Company was able to become associated with them.

The Company committed to pay $15,000 dollars toward sponsorship of
the race series, plus 250,000 restricted shares of JSL,USA, Inc.
stock, and enough Oil Extreme, "Better Than Synthetic" Motor Oil to
supply the school's 36 cars. The Company expects to gain retail
dealers, distributors, and commercial accounts to more than offset
this expenditure.

<PAGE>
-16-

The Company has just started to introduce a new mobile oil change
dealership program named, OIL EXTREME MOBILE PIT STOP. CHANGING
YOUR OIL AT HOME, OFFICE, OR EVENTS USING THE WORLD'S BEST OIL, OIL
EXTREME "BETTER THAN SYNTHETIC" MOTOR OIL

EXCLUSIVE TERRITORY DEALERSHIP PROGRAM:

The Oil Extreme "Mobile Pit Stop" oil change dealership
program is the first mobile oil change business to give the small
business owner a complete package that almost guarantees success in
the 5 billion dollar a year oil change business.

For the first time, a one person owner operator can purchase
a completely equipped van that allows him or her to
quickly vacuum the oil from a car's engine without getting dirty
crawling under the vehicle. For as little as $5,000 down, the
owner operator can still have the opportunity to make an above
average income with Oil Extreme's unique one of a kind dealership
program. Or, an investor can purchase multiple Oil Extreme vans,
and hire operators to do the oil changes with far less investment
than a single fast food franchise. And, the profit potential is
vastly superior, and they'll have a lot less headaches.

Let's face facts. Finding new customers every day, and
changing oil the rest of their life is not the most exciting
prospect in the world. Sure, they're giving a much needed
service, but when was the last time ANYONE complimented the guy who
changed the oil in their car?

The Oil Extreme "Better Than Synthetic" Motor Oil is
what gives them a huge advantage over every other oil change
business in the world. Now, for the first time, they can guarantee
their customers that they will gain horsepower and increase miles
per gallon as soon as their oil is changed. Their engines will run
smoother, quieter, cooler, and wear will be dramatically reduced
because of the exclusive calcium carbonate extreme pressure
properties we are able to give this revolutionary new motor oil.

Now, when the owner operators look for new customers
they really have some great benefits to talk about. They also have
Oil Extreme's worldwide racing results, this last years
Indianapolis results, and dyno tests to prove Oil Extreme does
everything the Company claims. Motor Trend, Grassroots
Motorsports, Street Legal Imports, and European Car, are just a few
magazines with articles praising Oil Extreme. AND BEST OF ALL,
EVERY DRIVER CAN FEEL THE DIFFERENCE IN POWER, ACCELERATION, AND
SMOOTHNESS, AS SOON AS THEY DRIVE THE CAR.

<PAGE>
-17-

Now, the positive feedback they receive from their customers keeps
them excited and pumped up. Each day, it is felt the owner
operator will be ready to go share the good news about Oil Extreme
with new customers. It's the Company's plan to give each dealer
the training, tools, and exclusive products to help them make an
exceptional income, then to help them pass their experience on to
their employees as they become multiple van owners if they wish.

Just imagine them with 10 or 20 vans all alike, sporting the
distinctive Oil Extreme paint job. Each of the operators will be
wearing a clean Oil Extreme T-shirt, jacket, and hat, which lets
each customer know that their car is being serviced by an expert.
It may seem like a little thing, but looking sharp, helps an
operator feel sharp, and not afraid to visit the tallest and best
office building in town looking for new customers.

The Company's personalized training is expected to give them the
confidence to go to the largest corporation to ask for their fleet
business. It is felt that calling on doctors, lawyers,
stockbrokers, and corporate executives will become second nature to
them. And this executive business is far more profitable than
trying to compete with the cheapest, so called, quick change oil
company in town.

But best of all, just imagine a customer driving his or
her car for the first time after they've just had their car filled
with Oil Extreme. From past experience it is expected that they
will feel a big difference! The Company feels they will not keep
this to themselves when they return to the office the next day. It
is expected they will share this new find with all their friends.
Now when the owner operator returns to see how they liked the way
their car ran, they should find others in the same office wanting
their oil changed too. If they've given their original customer a
few discount coupons for their friends they should be assured of a
group of steady customers who will probably repeat time after time.

Does Oil Extreme "Better Than Synthetic" Motor Oil cost
more than regular oil? Yes it does. Each oil change costs $49.95.
But the customers are receiving a personalized on site oil change
and lube job, plus they are getting what the Company believes is
the best oil in the world, which regularly sells for $7.95 per
quart. But that's not the whole story. The Company also supplies a
4 ounce bottle of Oil Extreme Concentrate free of charge with each
4 quarts of oil. The Oil Extreme Concentrate is an extreme
pressure additive package booster which is used to boost the oil's
additive package after 3,000 miles of usage. That means they can
safely double their drain interval to 6,000 miles. With the extra
miles per gallon they will get, and double the oil life, Oil Extreme
is far more economical than using regular oil. And it's especially
true when they consider the reduction in wear their engine gets.

The big advantage they'll enjoy is the greater profit they'll
realize. If the owner operators are using cheap oil, they
will probably have to compete against all the price cutters in
town. With Oil Extreme, it is felt they will have a product no one
else has, and one that the customer will thank them for introducing
to him or her.

The Company is contacting already existing mobile oil change
operators who are out there all alone with no oil company
affiliation. We are also seeking individuals who are looking for a
business with low overhead and low start up costs, but with a big
potential. And, the Company is seeking businessmen, and

<PAGE>
-18-

businesswomen with ready capital, who are looking for an
alternative to high priced food franchises, and able to manage a
multi-van operation. The Company feels it has the expertise to
make the owner operator an oil expert, and combined with its
exceptional product line it can give them the confidence to face
any oil change business situation.

It is reported that competitors in the mobile oil change
business average about 20 oil changes a day per van. That
means each van is selling about 25 gallons of oil per day, or just
under a half drum. If the Company can tap into this market there
are several ways this added volume can benefit the Company. One
major way is shipping. The Company's shipping costs for oil would
be cut in half.

Year 2000 computer problems were handled before the close
of 1999 by a computer technician hired to inspect all
computers and programs. When year 2000 arrived all computers were
off. When they were turned back on after the holidays no problems
were encountered. Total expenditure was only $400.00.

ITEM 2. PROPERTIES.

The Company has Five full time employees. The Company presently
maintains its business office at 21935 Van Buren, Suite 4, Grand
Terrace, California 92313, which is approximately sixty miles east
of Los Angeles. The Company leases 4,000 square feet in a single
story tilt-up industrial building. 1,000 feet is used for office
space and 3,000 feet is used for manufacturing and warehouse.
JSLT is currently negotiating a new 2 year lease.

ITEM 3. LEGAL PROCEEDINGS.

An individual has asserted a claim against the Company and
others wherein it is contended that this individual loaned
money to the Company and that the individual is entitled to
stock and other forms of monetary compensation and damages as
a result of dealings with the Company and the conduct of the
Company. The Company denies liability and alleges that this
individual dealt with others in a series of transactions that
did not directly involve the Company. Notwithstanding the
contentions of the parties, the Company views this matter as
a potential claim, and should this individual file a lawsuit,
this individual would possibly name the Company as a
defendant. This individual has demanded the sum of $71,000
plus interest at 10% plus $2,000 in costs. The Company
anticipates that should a civil complaint be filed, it would
include a variety of causes of action ranging from contract
claims to tort claims, some of which would include claims
based on misrepresentations of facts. On May 17, 2000, this
individual was issued 250,000 shares of free trading stock of
the Company and 500,000 shares of restricted stock of the
Company. As a result of the issuance of the stock, this
individual released all claims against the Company.

The Company is also a defendant in a lawsuit whereby the
plaintiffs allege a breach of a lease agreement. The leased

<PAGE>
-19-

premises were sold to another entity and the Company
currently has a lease with this entity. The amount sought by
the plaintiff is $14,831. The Company has asserted various
defenses to the claims and is currently defending the action,
there have been initial settlement discussion and it is
anticipated that the matter will be settled by way of a
compromise and stipulation agreement.

Additionally, the Company is involved in a dispute of the
sponsoring of a professional boat race in Nevada. The Company
has not made an appearance in court and does not know the
status of that action as it has not been contacted by the
plaintiff and has not received any notification of any action
taken by the plaintiff with regards to the prosecution of the
action. The amount demanded by the plaintiff is $6,000 plus
40,000 shares of common stock.

The Company is also a defendant to other various lawsuits
which have been filed in the United States and the United
Kingdom for which judgements have been entered against the
Company. The amount of the judgements have been accrued in
the financial statements.

JUDGMENTS

The following judgments have been entered against Jet Set Life
Technologies, UK Ltd.

1. Elliott Group Pound 564.24 (Pounds Sterling)
2. Market Link Publishing Pound 3,065.58
3. Neat Ideas Pound 102.04
4. R.J. Stark Pound 450.00
5. Teet-Comm Pound 439.29
6. Chester Chronicle Pound 490.00
7. Rates (Taxes) Pound 2,240.45
8. CMYK Pound 161.38
9. Kings Manor Hotel Pound 125.25

TOTAL POUND 7,638.23

JSLT, UK Ltd. has plans of resolving these as soon as possible.

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

No matter was submitted to a vote of security holders
through solicitation of proxies or otherwise during the fourth
quarter of the fiscal year covered by this report.

PART II

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

(A) MARKET INFORMATION.

There is presently no established public trading market for the
Registrant's common stock. Present management is unaware of any

<PAGE>
-20-

active trading within the past two years. The Company has made
unregistered issuances of its restricted common stock, see Item 12.

(B) HOLDERS.

The approximate number of record holders of the Registrant's common
stock as of June 30, 1999 is 428.

The registrant has not paid any cash dividends to date and does not
anticipate or contemplate paying dividends in the foreseeable future.
It is the present intention of management to utilize all available
funds for the development of the Company's business.

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

Jet Set Life Technologies, Inc. ("JSLT") was started
in the summer of 1993 with two products, a magnetic
gasoline and diesel fuel saving device, and an oil
additive, both purchased from outside sources.
George French, the founder and president, had the
concept of giving the first sample of oil treatment
free of charge with the fuel saving device hoping if
the customer once started using the additive they
might continue using it.

The President of the Company who had a background in
motorcycle and car speed equipment designing and
manufacturing in his younger years sought out a
catalytic fuel saving device. This device used a
unique catalytic cartridge containing an alloy made
of precious, common and exotic metals which were
treated with a nine step chemical process. This
cartridge technology was combined with a magnetic
technology developed by the President to produce the
Triple Charger. Management believes the Triple
Charger has the ability to treat gasoline or diesel
fuel as it passes through the device on its way to
the engine combustion chamber in such a way that
mileage is increased. 20% increase in gasoline
mileage and 15% increase in diesel fuel mileage is
guaranteed by JSLT. Management believes the Triple
Charger also has the ability to lower emissions.

JSLT chose direct sales through a network of
independent distributors as the vehicle to launch
Triple Charger sales. The Triple Charger, now sells
for $229 for cars, $799 for large diesel trucks
and a new model ready for launch for larger 12 to 16
cylinder locomotive and industrial engines will sell
in the $2,500 range. The Triple Charger was
received with varying results. Approximately 90% of
the Company's customers were satisfied with the
results of the product. However, there were about
10% of them who said they did not get the 20%
guaranteed results. Some said they didn't get the
mileage expected, but they loved the extra power.

<PAGE>
-21-

The automotive industry suggests that overall about
50% of the vehicles on the highway are not in proper
tune, and of course management feels that some of
this has resulted in the Triple Charger not
performing as it should. On going research by
several individuals has resulted in the possibility
of an improved Triple Charger model. As time passes,
pollution of the atmosphere is expected to be a
bigger issue than economy. Management feels it
probably should not have given the 20% guarantee on
miles per gallon increase, and may change its
advertising emphasis to one of reduced emissions,
which the Triple Charger can lower immediately on
almost every vehicle.

Management felt direct sales by trained individuals
telling how well this device worked on their car or
truck would be a much more viable method of
distribution for a small under capitalized Company.
Since starting, the Company has opened offices in the
UK, Australia, New Zealand, and is doing business in
Canada. JSLT also has sales in a number of other
countries.

During 1997 the Company acquired certain rights to
sell a unique motor oil additive they named
Oil Extreme, because of its ability to impart extreme
pressure properties to motor oil by using special
reengineered molecules of calcium carbonate.

Commencing in the 1st quarter of 1997, sales took a
sharp drop and have continued to decline after the
introduction of the new oil additive, "Oil Extreme".
This revolutionary new oil technology uses calcium
carbonate to form a tribochemical film which fills
the asperities or microscopic hills and valleys found
in all metal surfaces. Oil Extreme replaced a former
product, Oil Charger, which used chlorinated
paraffins to form the tribochemical film.

Although Oil Charger produced better mileage,
acceleration, and horsepower, there were harmful side
effects caused by the chlorinated paraffins.
Chlorinated paraffins produce hydrochloric acid when
heated in an engine, and when they react with ZDDP,
which is found in all motor oil additive packages,
sludge is formed. The result is a corrosive and
environmentally unfriendly combination. Chlorinated
paraffins are not used in legitimate motor or racing
oils. However, they are used by many additive
companies because they produce immediate results with
a low cost. Even though many additive companies use
chlorinated paraffins, this fact is generally not
addressed in promotional material.

<PAGE>
-22-

The Company's direct sales force is made up of mostly
part-time independent sales people, and given their
dedication to the former product, some initial
difficulties were experienced with the introduction
of Oil Extreme which ultimately affected sales for
the oil additive as well as for the Triple Charger.
In an effort to compensate for this drop in sales,
the Company produced presentation books, slides,
videos, brochures, and have further introduced a
program where it gave each distributor $10,000.00 in
free Oil Extreme on a buy one get one free basis if
they attend a training school, pass a written test,
and make a minimum of sales presentations. That
program has now been canceled. Many distributors
have now had the opportunity of testing Oil Extreme
for themselves and are convinced that the product is
as good as Oil Charger if not better. Other
distributors have not yet become convinced that this
change is for the better. As a result, sales have
continued to decrease.

With the introduction of Oil Extreme, the Company
feels that it will eventually be in a much stronger
position than before. It is anticipated that because
of the unique way in which the tribochemical film
reduces friction and wear, Oil Extreme will
ultimately be the biggest seller in our product line,
especially in light of the fact that dynamometer
readings indicate that any vehicle will achieve an
increase in horsepower after using Oil Extreme.

To reduce its reliance on mostly part-time
distributors the Company has started a campaign to
recruit retail dealers in the automotive, motorcycle,
and boat racing industry. This also includes engine
builders in each category. After seeing what has
happened to other oil additive companies once their
TV infomercials ceased the management feels that
building a solid reputation in the racing industry
will eventually give its products the stature it
needs to gain acceptance in the commercial and fleet
market.

During the fiscal years 1998 and 1999 the Company
instituted the following actions to increase
awareness of its products: 1. The Company embarked on
a program of dynamometer testing which proved Oil
Extreme produces horsepower. 2. JSLT developed its
own complete motor oil with the calcium carbonate
technology already in the oil. This makes us a
legitimate oil company and not just an additive
producer. 3. The Company started a concentrated push
to reach the automotive performance market. This
includes; auto racing, motorcycle racing, snowmobile
racing, truck racing, drag racing, hot rods, and
custom cars. It is not uncommon for even very small

<PAGE>
-23-

engine shops, and race car and motorcycle builders to
have a dynamometer in their shops. These are the
individuals who can prove in a few minutes that Oil
Extreme produces horsepower. This can shorten the
test time drastically, and prove Oil Extreme does
everything the Company says it does. 4. The Company
plans to introduce Grease Extreme, which also uses
the calcium carbonate technology. This extreme
pressure grease out-performs greases costing several
times the cost of Grease Extreme. 5. The Company
plans to attend performance racing industry trade
shows, to introduce Oil Extreme to the performance
market, and to give samples to anyone willing to test
the product on their dynamometers. The Company also
plan to attend performance industry shows
internationally as funds permit. 6. The Company plans
a limited advertising campaign in conjunction with
articles showing that both Oil Extreme concentrate
and Oil Extreme motor oil out-performs every "top"
synthetic racing oil in the world. 7. The Company
plans to supply Oil Extreme to a variety of top race
teams. 8. The Company plans to start a press release
campaign introducing Oil Extreme to the approximately
140 motorcycle and automotive magazines in the US. 9.
The Company plans to open a web site on the Internet.
10. The Company plans to start a mobile oil change
dealership program, where exclusive territories will
be given to dealers who purchase a special van which
is equipped to change oil at the customer's office or
business and who exclusively use the Oil Extreme
motor oil. All of the above programs should give the
Company the reputation of being a legitimate oil
company, with legitimate new oil technology.

During the fiscal year ending June 30 1998 sales were
$346,984 and $177,897 during fiscal year ending June
30,1999, however gross profit increased from $51,130
in 1998 to $105,010 in 1999. During this same period
total operating expenses have been reduced from

<PAGE>
-24-

$616,401 during 1998 to $327,805 during 1999. Net
loss from operations has been reduced from $605,045
during 1998, to $282,978 during 1999. During 1998
the Company borrowed $319,277 from related parties
and in 1999 it borrowed $35,477 from related parties
and $27,080 from unrelated parties.

Even though management has seen a large drop in sales
after the new Oil Extreme was substituted for the
older Oil Charger technology, expenses have also been
reduced to the point where management feels that just
a few large orders by companies or overseas importers
who have been testing the products could bring the
sales back to previous levels, and beyond. Since the
Company has done so well in racing, and has so many
success stories to tell, management feels it is time
to also start a campaign to recruit many more network
marketing distributors, and since the Internet has
become so powerful a recruiting, training, and sales
tool, management is presently having a new Company
web site designed. It is expected that self
replicating web sites will be made available for each
new dealer, with a reduced monthly web site fee
charged each dealer. The new Oil Extreme Mobile Pit
Stop oil change business will be the only mobile oil
change business that has its own brand of oil and it
should be a very desirable dealership to own. It is
estimated that each mobile oil change van should use
one 55 gallon drum of oil a week. Management feels
that as soon as data from the first few Mobile oil
change vans is collected, that this part of the
business can be franchised and a fee charged for the
protected territories.

The Company has been testing a new gas and diesel
fuel additive it is calling Gas Extreme, which it
feels could increase sales and profits substantially
because of the high price of gasoline in the US as
well as overseas. With petrol and diesel fuel prices
as high as $4.00 to $5.00 per gallon in many
countries, and with more and more emphasis being
placed on motor vehicle emissions, the Company hopes
to establish wholly-owned sales offices and
distribution centers in countries in many parts of
the world. The Company hopes to expand into two new
countries in fiscal year ending June 30, 2000 and
five new countries during 2001.

ITEM 7. FINANCIAL STATEMENTS.

The financial statements are set forth immediately following the
signature page.

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

There have not been any disagreements between the Registrant and

<PAGE>
-25-

its certifying accountants on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or
procedure, or any other reportable event.

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS.

(A) IDENTIFICATION OF DIRECTORS.

NAME AGE POSITION HELD

George French 69 Director and President

William Maass 49 Director and Secretary

(B) IDENTIFICATION OF EXECUTIVE OFFICERS

Same as above.

The Registrant has recently hired Mr. Antony Tyler who has significant
experience in the home development industry, and Mr. Dennis Johnson an
individual with many years experience in automotive racing engine
development.

(D) FAMILY RELATIONSHIPS.

None.

(E) BUSINESS EXPERIENCE.

(1) BACKGROUND.

GEORGE W. FRENCH, PRESIDENT AND DIRECTOR

George W. French, born in 1930 has spent most of his life
in engineering, sales, marketing and management. He
attended La Sierra University for three years but was
drafted into the army before he graduated, and after
basic training served eighteen months as an Army medic in
Korea during the height of the Korean war.

After returning from Korea he started his own business designing and
manufacturing motorcycle and automotive speed equipment products.
This business was sold so he could return to San Bernardino Valley
college to finish his degree in engineering. Before he graduated he
was offered a partnership in the purchaser of his speed equipment
business. His innovative designs became so well known that he was
invited to join American Honda Motor Company as its first American
employee. He spent three years at Honda as National Sales Manager.

<PAGE>
-26-

From 1964 to 1969 he worked for Ovation Cosmetics, a network
marketing organization, where he rose to area coordinator for Los
Angeles County, California. Starting in 1969 he spent the next
twenty three years working for a religious institution working with
teenagers and an anti-drug program he developed.

He next founded Jet Set Life Technologies, Inc., The Company's
purpose was to produce and market a gasoline and diesel fuel saving
device.

WILLIAM MAASS, SECRETARY AND DIRECTOR

William D. "Bill" Maass, born in 1952, has been involved in sales,
marketing and business management from his late teenage years. In
business for himself, at eighteen, he operated a pool service
Company and later became a contractor building pools. The service
Company financed his education at L.A. Pierce College where in
1974, he earned an Associate of Arts Degree. In 1980, after 14
years in contracting, Bill left the construction business to manage
a telemarketing satellite office for a supplier of industrial tools
and equipment. In 1984 he took a management/marketing position
representing materials testing equipment for quality control test
labs to commercial and government agencies. Then in 1991 he took a
position as regional manager with a specialty lubrication
manufacturer. In April, 1994 he was hired as National Marketing
Director for Company.

(2) DIRECTORSHIPS. None.

(F) Involvement in certain legal proceedings

<PAGE>
-27

defenses to the claims and is currently defending the action,
there have been initial settlement discussion and it is
anticipated that the matter will be settled by way of a
compromise and stipulation agreement.

(G) COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Not applicable.

ITEM 10. EXECUTIVE COMPENSATION.

(A) CASH COMPENSATION.

During the last fiscal year, William Maass, who is the Company's
Secretary and a director was paid cash compensation of approximately
$0 which included salary and expense reimbursement. Mr. Maass
will be paid a comparable amount during the current fiscal year. In
the fiscal year ending June 30, 1998, and also the fiscal year ending
June 30, 1999, the Company accrued but did not pay a salary to its
president in the amount of $36,000.00 each year. No other officer
or director received any salary during the last fiscal year and the
Company has no plans to pay any during the current fiscal year.

(B) COMPENSATION PURSUANT TO PLANS.

Except as described in Item 10(c), there are presently no retirement,
stock option or other plans or arrangements pursuant to which cash or
non-cash compensation was paid or is proposed to be paid or
distributed in the future to any of the current executive officers
of the Registrant.

None
(D) COMPENSATION OF DIRECTORS.

None other than as described under Item 10(a) and 10(c).

<PAGE>
-28-

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

(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.

The following tabulates holdings of Common Shares of the Company as
of June 30, 1999, held of record by all Directors, Officers and
Principal Shareholders individually and as a group.

Percent of
Names and Addresses of Number of Shares Common Stock
Officers and Director of Common Stock Owned(1)

George French 39,151,225 59%

William Maass 750,000 1%

All officers and
directors as a group (2 persons) 39,901,225 60%

(B) CHANGES IN CONTROL.

None

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. See Item

10(c) also.

None

PART IV

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K.
(A) Exhibits listed in the following index are
included as part of this report. Those documents which have
previously been filed as an exhibit to a registration statement
or report under the Securities Act or the Exchange Act are
incorporated herein by reference into such reports and are
marked "previously filed."

<PAGE>
-29-

EXHIBIT INDEX

No. Description

3.1 Articles of Incorporation Previously Filed

3.2 Articles of Amendment Previously Filed

3.3 By-Laws Previously Filed

4.1 Specimen Stock Certificate Previously Filed

SIGNATURES

Pursuant to the requirements of Section 13, or 15(d) of the
Securities and Exchange Act of 1934, the Registrant had duly caused
this Report to be signed on its behalf by the undersigned thereunto
duly authorized in the city of Salt Lake, State of Utah on this

<PAGE>
-30-
JET SET LIFE USA, INC.

By: /s/ George French
-------------------------
President, George French

SIGNATURES

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

Date: June 27, 2000 /s/ George W. French
--------------------------
George W. French,President
and Director

Date: June 27, 2000 /s/ William Maass
--------------------------
William Maass
Secretary/Treasurer
and Director
<PAGE>
-31-

JET SET LIFE USA, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

Page

Report of Independent Certified Public Accountants 1

Consolidated Balance Sheet - June 30,1999 2

Consolidated Statements of Operations for the Years
Ended June 30, 1999 and 1998 4

Consolidated Statements of Stockholders' Deficit for
the Years Ended June 30, 1999 and 1998 5

Consolidated Statements of Cash Flows for the Years
Ended June 30, 1999 and 1998 6

Notes to Consolidated Financial Statements 7

<PAGE>

HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS

(801) 532-2200
Member of AICPA Division of Firms Fax (801) 532-7944
Member of SECPS 345 East Broadway, Suite 200
Member of Summit International Associates Salt Lake City, Utah 84111-2693

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Stockholders and the Board of Directors
Jet Set Life USA, Inc.

We have audited the accompanying consolidated balance sheet of Jet Set Life
USA, Inc. and Subsidiaries as of June 30, 1999, and the related consolidated
statements of operations, cash flows and stockholders' deficit for each of
the two years in the period ending June 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 audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Jet Set
Life USA, Inc. and Subsidiaries as of June 30, 1999, and the results of
their operations and their cash flows for each of the two years in the
period ended June 30, 1999, in conformity with generally accepted accounting
principles.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in
Note 1 to the consolidated financial statements, the Company has had
reoccurring losses from operations and has a net capital deficiency that
raise substantial doubt about its ability to continue as a going concern.
Management's plans concerning these matters are also described in Note 1.
The consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

HANSEN, BARNETT & MAXWELL

Salt Lake City, Utah
December 9, 1999

<PAGE>

JET SET LIFE USA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JUNE 30, 1999

ASSETS

Total Current Assets
Cash $ 881
Accounts receivable 2,159
Inventory 20,388
----------
Total Current Assets 23,428
----------
Property and Equipment
Machinery and equipment 58,771
Computer equipment and
software 77,995
Furniture and fixtures 4,776
Leasehold improvements 12,528
----------
Total Property and Equipment 154,070

Less: Accumulated Depreciation (115,399)
----------
Net Property and Equipment 38,671
----------
Other Assets 1,000
----------
Total Assets $ 63,099
==========

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

<PAGE>

JET SET LIFE USA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (CONTINUED)
JUNE 30, 1999

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts payable $ 347,727
Accrued liabilities 320,326
Notes payable 19,680
Note and advances payable - related parties 672,944
--------------
Total Current Liabilities 1,360,677
--------------
Contingent Liabilities

Stockholders' Deficit
Common stock - $0.0001 par value; 100,000,000
shares authorized; 66,256,792 shares issued
and outstanding 6,626
Additional paid-in capital 509,727
Accumulated deficit (1,814,467)
Foreign currency translation adjustment 536
--------------
Total Stockholders' Deficit (1,297,578)
--------------
Total Liabilities and Stockholders' Deficit $ 63,099
==============

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

<PAGE>

JET SET LIFE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998

1999 1998
-------------- --------------
Sales $ 177,897 $ 346,984
Cost of Goods Sold 72,887 295,854
-------------- --------------

Gross Profit 105,010 51,130
-------------- --------------
Operating Expenses
Write off of obsolete inventory 28,775 51,290
General and administrative expense 248,666 375,324
Sales and marketing 33,455 162,126
Depreciation and amortization 16,909 27,661
-------------- --------------
Total Operating Expenses 327,805 616,401
-------------- --------------
Loss from Operations (222,795) (565,271)

Interest Expense 60,183 39,774
-------------- --------------
Net Loss from Operations (282,978) (605,045)

Cumulative Effect of Change in
Accounting Principle, Net of Tax - (9,322)
-------------- --------------
Net Loss $ (282,978) $ (614,367)
============== ==============
Basic and Diluted Loss Per Share
from Operations $ (0.00) $ (0.01)
============== ==============
Basic and Diluted Loss Per Share
from Cumulative Effect of Change
in Accounting Principle $ (0.00) $ (0.00)
============== ==============
Basic and Diluted Loss Per Share $ (0.00) $ (0.01)
============== ==============
Weighted Average Common Shares
Used in Per Share Calculation 66,219,107 66,133,367
============== ==============

The accompanying notes are an integral part of these consolidated financial
statements

<PAGE>

JET SET LIFE USA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED JUNE 30, 1998 AND 1999
<TABLE>
<CAPTION>
Foreign
Common Stock Additional Currency Total
-------------------------- Paid-in Accumulated Translation Stockholders'
Shares Amount Capital Deficit Adjustments Deficit
---------- ------------ ---------- ------------ ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Balance - June 30, 1997 66,126,792 $ 6,613 $ 500,740 $ (917,122) $ (247) $ (410,016)

Shares issued for services
May 1998 $0.05 per
share 75,000 7 3,743 - - 3,750

Foreign currency translation - - - - (1,294) (1,294)

Net loss - - - (614,367) - (614,367)
---------- ------------ ---------- ------------ ----------- ---------------

Balance - June 30, 1998 66,201,792 6,620 504,483 (1,531,489) (1,541) (1,021,927)

Stock issued for services
November 1998 $0.15 per
share 25,000 3 3,747 - - 3,750

Stock issued for services
May 1999 $0.05 per share 30,000 3 1,497 - - 1,500

Foreign currency translation - - - - 2,077 2,077

Net loss - - - (282,978) - (282,978)
---------- ------------ ----------- ------------ ----------- ---------------
Balance - June 30, 1999 66,256,792 $ 6,626 $ 509,727 $ (1,814,467) $ 536 $ (1,297,578)
========== ============ =========== ============ =========== ===============

<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
5

<PAGE>
JET SET LIFE USA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998

1999 1998
--------------- --------------
Cash Flows From Operating Activities
Net loss $ (282,978) $ (614,367)
Adjustment to reconcile net
loss to net cash provided by
operating activities:
Depreciation and amortization 16,769 27,514
Stock issued for services 5,250 3,750
Purchases made by the president
on behalf of the Company 2,845 14,870
Change in accounting principle - 9,322
Loss on disposal of asset - 139
Changes in certain current assets
and liabilities:
Accounts receivable 13,496 10,203
Inventory 27,086 93,363
Accounts payable 87,598 77,499
Accrued liabilities 107,793 79,228
--------------- --------------
Net Cash From Operating
Activities (22,141) (298,479)
--------------- --------------
Cash Flows From Investing Activities
Purchase of equipment (280) -
--------------- --------------
Net Cash From Investing
Activities (280) -
Cash Flows From Financing Activities
Proceeds from notes payable to
related parties 35,477 319,275
Proceeds from notes payable 27,082 -
Payments on notes payable to
related parties (33,934) (30,479)
Payments on notes payable (7,400) -
Cash overdraft - 655
--------------- --------------
Net Cash From Financing
Activities 21,225 289,451
--------------- --------------
Effect of Exchange Rate Changes on
Cash 2,077 (1,294)

Net Increase (Decrease) in Cash 881 (10,322)

Cash At Beginning of Year - 10,322
--------------- --------------

Cash At End of Year $ 881 $ -
=============== ==============

Supplemental Disclosures of Cash
Flow Information:
Interest Paid $ 68 $ 330
=============== ==============
Supplemental Information on Noncash Investing and
Financing Activities - Note 9

<PAGE>

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
PRINCIPLES

Organization and Nature of Business - Caravel Corp. (Caravel) was
incorporated under the laws of the State of Delaware on February 17, 1987
and subsequently changed its name to Jet Set Life U.S.A. (USA).

Jet Set Life Technologies, Inc. (Technologies), was incorporated in the
state of Delaware on May 19, 1994. Effective June 30, 1996, USA acquired all
of the outstanding shares of Technologies, which were owned by George
French, for 13,369,124 shares of USA common stock.

The accompanying consolidated financial statements include the accounts of
Jet Set Life USA, Inc. and its subsidiaries, including: Jet Set Life
Technologies Canada, Ltd., Jet Set Life Barbados, Ltd, Jet Set Life
Technologies Australia, Pty., Ltd., Jet Set Life Technologies New Zealand,
Ltd, and Jet Set Life Technologies, Ltd. (UK), collectively referred to as
the Company. All significant intercompany accounts and transactions have
been eliminated in consolidation.

The Company is in the business of selling products which are intended to
increase fuel efficiency and reduce harmful emissions of both gas and diesel
vehicles including a motor oil additive, a fuel additive and a fuel
treatment device. The products are marketed using a network marketing system.

Basis of Presentation - The accompanying consolidated financial statements
have been prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the normal
course of business. As shown in the consolidated financial statements,
during the years ended June 30, 1999 and 1998, the Company incurred net
losses of $614,367 and $249,821, respectively, and, as of June 30, 1999, the
Company's accumulated deficit totaled $1,781,310. At June 30, 1999, the
Company had a net capital deficiency of $1,264,260. These factors, among
others, raise substantial doubt about the Company's ability to continue as a
going concern for a reasonable period of time. The Company's ability to
continue as a going concern is dependent upon its ability to generate
sufficient cash flow to meet its obligations on a timely basis and
ultimately attain successful operations. Management is pursuing efforts to
obtain additional financing and intends to organize the Company so as to
generate sufficient cash flows through future operations. The consolidated
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amount
and classification of liabilities that might be necessary should the Company
be unable to continue as a going concern.

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 in the financial
statements. Actual results could differ from those estimates.

Cash Equivalents and Fair Value of Financial Instruments - Cash equivalents
include highly liquid investments with original maturities of three months
or less, readily convertible to known amounts of cash. The amounts reported
as cash, accounts receivable, accounts payable, accrued liabilities and
notes payables are considered to be reasonable approximations of their fair

<PAGE>

values. The fair value estimates presented herein were based on market
information and management's estimates as of June 30, 1999. The use of
different assumptions and/or estimation methodologies could have a material
effect on the estimated fair value amounts. The reported fair values do not
take into consideration potential expenses that would be incurred in an
actual settlement.

Revenue Recognition - Revenue from the sale of products is recognized at the
time the product is shipped and paid for by the distributor. The product is
usually not shipped until payment is received; therefore the Company has
minimal accounts receivable, and no collateral is required. No allowance
for bad debt is considered necessary, based on management's estimate and
subsequent collections.

Inventory - Inventory is valued at the lower of cost or market, with cost
being determined using the first-in, first-out method. Inventory consisted
of the following at June 30, 1999:

Raw materials $ 3,857
In process products 7,666
Finished products 27,109
------------
Total Inventory $ 38,632
============

Property and Equipment - Property and equipment are reported at cost. Major
additions and improvements are capitalized, while minor repairs and
maintenance costs are expensed when incurred. Depreciation of property and
equipment is computed using the straight-line method over the estimated
useful lives of the related assets which are as follows:

Machinery and Equipment 7 years
Computer Equipment and Software 3-5 years
Furniture and Fixtures 7 years
Leasehold Improvements 7 years

Depreciation expense was $16,909 and $25,827 for the years ended June 30,
1999 and 1998, respectively.

Long-Lived Assets - The Company periodically evaluates the realizability of
long-lived assets for indications of a possible inability to recover the
carrying amount. Such evaluation is based on various analyses including cash
flow and profitability projections.

Advertising Costs - The Company expenses all advertising costs as incurred.
The Company incurred $28,218 and $89,879 in advertising costs for the years
ending June 30, 1999 and 1998, respectively.

Basic and Diluted Loss Per Share -Basic loss per common share is computed by
dividing net loss by the weighted-average number of common shares
outstanding during the period. Diluted loss per share is calculated to give
effect to potentially issuable common shares except during loss periods when
those potentially issuable common shares would decrease the loss per share.
There were 184,335 and 5,000 potentially issuable common shares which were
excluded from the calculation of diluted loss per common share at June 30,
1999 and 1998, respectively.

<PAGE>

Foreign Currency Translation - Foreign currency exchange gains and losses
have been reflected in the results of operations. The financial statements
of foreign subsidiaries were prepared using the local currency as the
functional currency. Those balance sheets were then translated into U.S.
dollars at the year-end rates of exchange and the statements of operations
were translated at the weighted average exchange rates during each year. The
effects of translating the financial statements into U.S. dollars were
recorded as a separate component of stockholders' deficit.

Export Sales - The Company had the following sales in foreign countries as
follows:

June 30, June 30,
1999 1998
-------- -------------
United Kingdom $ - $ 21,286
New Zealand - 8,783
Australia - 68,113
-------- -------------

Income Taxes - The Company recognizes a liability or asset for the deferred
tax consequences of all temporary differences between the tax bases of
assets and liabilities and their reported amounts in the consolidated
financial statements that will result in taxable or deductible amounts in
future years when the reported amounts of the assets and liabilities are
recovered or settled. These deferred tax assets or liabilities are measured
using the enacted tax rates that will be in effect when the differences are
expected to reverse.

NOTE 2 - CHANGE IN ACCOUNTING PRINCIPLE

The Company has capitalized $11,900 in organizational costs for starting up
business in Canada. During the year ended June 30, 1998, the Company adopted
SOP 98-5 Reporting on the Costs of Start-Up Activities which requires the
that all start-up and organizational costs be expensed as incurred. The
provisions of SOP 98-5 require that the change be treated as a change in
accounting principle. The new standard was effective for fiscal years
beginning after December 15, 1998 with earlier application permitted.
Therefore, the Company applied the change in accounting principle during the
year ended June 30, 1998 and charged $9,322 to operations.

NOTE 3 - RELATED PARTY TRANSACTIONS

During the years ended June 30, 1999 and 1998, the Company's president
received cash payments from the Company of $5,384 and $6,803, respectively,
in satisfaction of monies owed him by the Company and the Company received
cash payments from the president during those same periods of $427 and
$7,850, respectively. During the years ended June 30, 1999 and 1998, the
president also purchased supplies on behalf of the Company whose value was
$12,524 and $15,735, respectively and the Company paid personal expenses of
the president of $6,278 and $866, respectively. The Company also accrued
$36,000 and $36,000, respectively of wages owed to the president during the

<PAGE>

years ended June 30, 1999 and 1998. At June 30, 1999, the net effect of
these transactions shows the Company owes the President $22,197. During the
years ended June 30, 1999 and 1998, the Company received $0 and $187,880,
respectively from short-term, 6% interest bearing notes from a trust fund
for which the Company's president acts as trustee. As of June 30, 1999, the
Company owed $527,074 principal to the trust fund. The Company accrued
interest on these notes of $31,624 and $31,624, during the years ended June
30, 1999 and 1998, respectively. These notes are due on demand and secured
by shares of the Company's restricted stock. The president is also the
majority shareholder of the Company.

During the years ended June 30, 1999 and 1998, the Company also borrowed
funds to sustain operations and paid money on notes to shareholders. During
the year ended June 30, 1999 and 1998, the Company received funds from these
shareholders of $35,050 and $123,547, respectively, and paid $28,550 and
$23,676, respectively to shareholders. The amount owed to these shareholders
at June 30, 1999 was $123,673.

NOTE 4 - NOTES PAYABLE

The following schedule summarizes the notes payable at June 30, 1999:

Notes Payable to Unrelated Parties

Notes payable to individuals; no stated rate of
interest; Interest imputed at 10%; currently due;
unsecured. $ 650

Convertible notes payable to individuals; no
stated rate of interest; interest imputed at 10%;
currently due; unsecured 19,030
----------

Total Notes Payable to Unrelated Parties 19,680

Notes Payable to Related Parties

Notes payable to individual; $10 interest per day;
currently due; unsecured 10,000

Notes payable to shareholders; no stated rate of interest;
interest imputed at 10%; currently due; unsecured 25,352

Notes payable to shareholders; 10% stated rate of
interest; currently due; unsecured 78,521

Notes payable to trust, 6% stated rate of interest;
currently due; secured by shares of the Company's stock 527,074

Note payable to shareholder; 6% stated rate of
interest; currently due; unsecured 1,800

Note payable to shareholder; 15% stated rate of
interest; currently due; unsecured 3,000

Convertible note payable to shareholder; no stated rate
of interest; interest imputed at 10%; currently due;
unsecured 5,000

Note payable to Company's president; no stated rate of
interest; interest imputed at 10%; currently due;
unsecured 22,197
----------

Total Notes Payable to Related Parties 672,944

Total Notes Payable 692,624

Less Current Portion 692,624
----------
Long-Term Notes Payable $ -
==========
10

<PAGE>

The convertible notes are convertible into share of the Company's common
stock at rates ranging from $0.07 to $0.30 per share. The convertible notes
are convertible into 174,335 shares of the Company's common stock. There is
no beneficial conversion feature associated with the convertible notes.
Interest expense for the years ended June 30, 1999 and 1998 was $60,183 and
38,358, respectively.

NOTE 5 - LEASE COMMITMENTS

The Company leases a facility under an operating lease agreement which
extended through December 2000. For the fiscal year ending June 30, 2000,
the Company owed $9,180 under the terms of this operating lease. Total rent
expense relating to this operating lease and other various other month to
month and one time leases was $18,680 and $7,900 for the years ending June
30, 1999 and 1998, respectively.

NOTE 6 - STOCKHOLDERS' EQUITY

During the year ended June 30, 1998, the Company issued 75,000 shares of
common stock for services. The value of the services rendered to the
Company was $3,750, or $0.05 per share.

During the year ended June 30, 1999, the Company issued 30,000 shares of
common stock for services. The value of the services rendered to the
Company was $1,500 or $0.05 per share. The Company also issued 25,000
shares of common stock in satisfaction of accounts payable. The value of
the accounts payable was $3,750 or $0.15 per share

<PAGE>

NOTE 7 - STOCK OPTIONS

A summary of the status of the Company's stock options as of June 30, 1999
and 1998, and changes during the periods then ended are presented below:

June 30,
-----------------------------------------
1999 1998
----------------- -----------------
Weighted- Weighted-
Average Average
Exercise Exercise
Shares Price Shares Price
------ ----- ------- -----
Outstanding at beginning of
year 5,000 $0.25 5,000 $0.25
Granted 5,000 0.25 - -
Exercised - - - -
Forfeited or canceled - - - -
------ ----- ----- ----
Outstanding at end of year 10,000 0.25 5,000 0.25
------ ----- ----- ----
Options exercisable at year-end 10,000 0.25 5,000 0.25
====== ===== ===== ====
Weighted-average fair value of
options granted during the year $ - $ -
====== =====

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

Options Outstanding Options Exercisable
------------------------------------- -----------------------
Weighted-
Number Average Weighted Number Weighted-
Range of Outstanding Remaining Average Exercisable Average
Exercise at Contractual Exercise at Exercise
Prices 06/30/99 Life Price 06/30/99 Price
------ --------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$ 0.25 10,000 1.75 $ 0.25 10,000 $ 0.25

</TABLE>

The Company measures compensation under stock-based
options and plans using the intrinsic value method
prescribed in Accounting Principles Board Opinion 25,
Accounting for Stock Issued to Employees, and related
interpretations, for stock options granted to employees,
and determines compensation cost granted to non-employees
based on the fair value at the grant dates consistent with
the alternative method set forth under Statement of
Financial Accounting Standards No. 123, (SFAS 123)
Accounting for Stock-Based Compensation. Stock-based
compensation charged to operations was $0 and $0 for the
for the years ended June 30, 1999 and 1998, respectively.
Had compensation cost for the Company's options been
determined based upon SFAS 123, net loss and loss per
share would have increased to the pro forma amounts
indicated below:

For the Years Ended
June 30,
-----------------------------
1999 1998
------------- ----------
Net loss:
As reported $ (249,821) $ (614,367)
Pro forma (249,821) (614,367)

Basic and diluted loss
per share:
As reported $ (0.00) $ (0.01)
Pro forma (0.00) (0.01)

<PAGE>

The fair value of each option granted was estimated on the
date of grant using the Black-Scholes option-pricing model
with the following weighted-average assumptions used for
grants in 1999: dividend yield of 0.0% for all periods;
expected volatility of 0.0%; risk-free interest rate of
5.40% and expected life of the options of 3.5 years.

NOTE 8 - STOCK WARRANTS

The Company issued 7,200,000 warrants in 1989 to
shareholders in connection with the issuance of common
stock that are exercisable at $0.25 per share, with an
original expiration date of June 30, 1997. These warrants
were extended another 12 months to expire on June 30,
2000. At June 30, 1999, the total number of warrants
outstanding was 6,178,134.

NOTE 9 - NONCASH INVESTING AND FINANCING ACTIVITIES

During the year ended June 30, 1999, the Company paid
various personal expenses of the Company's president. The
amount of the expenses was $16,057. Also, the president
made various purchases on behalf of the Company. The
amount of these purchases was $18,902. These amounts were
charged against the note payable to the president. The
president also paid notes to shareholders during the year
of $3,400.

During the year ended June 30, 1998, the Company paid
various personal expenses of the Company's president. The
amount of the expenses was $865. Also, the president made
various purchases on behalf of the Company. The amount of
these purchases was $15,735. These amounts were charged
against the note payable to the president. In addition,
the Company experienced a one time adjustment as a result
of a change in accounting principle. The amount charged
to operations was $9,322. (See Note 2).

NOTE 10 - INCOME TAXES

The current provision for income taxes, classified by
location of payment, was as follows:

Current 1999 1998
--------- --------
U.S. $ - $ -
Foreign - -

The major components of the net deferred tax asset as of
June 30, 1999 were as follows:

Deferred tax asset-operating
loss carry forwards $ 669,993
Less Valuation allowance (669,993)
---------
Net Deferred Tax Asset $ -
=========

<PAGE>

The net change in the valuation allowance was $228,903 and
$85,075 for the years ended June 30, 1999 and 1998,
respectively. The Company has U.S. operating loss carry
forwards at June 30, 1999 of $1,686,260 which expire in
the years 2010 through 2014 if unused. Under federal tax
law, certain potential changes in ownership of the Company
may restrict future utilization of these carry forwards.
The Company also has foreign operating loss carry forwards
of $109,976.

The components of the provision for income taxes were
immaterial for all periods presented. The following is a
reconciliation of the income tax at a federal statutory
tax rate of 34% with the provision for income taxes for
the years ended June 30, 1999 and 1998:

1999 1998
--------- ----------
Income tax benefit at statutory rate $ (77,557) $ (208,885)
State tax, net of federal benefit (7,528) (20,274)
Change in deferred tax asset valuation
allowance 85,075 228,903
Nondeductible expenses 10 256
--------- ----------

Provision for income taxes $ - $ -
========= ==========

NOTE 11 - CONTINGENCIES AND COMMITMENTS

An individual has asserted a claim against the Company and
others wherein it is contended that this individual loaned
money to the Company and that the individual is entitled
to stock and other forms of monetary compensation and
damages as a result of dealings with the Company and the
conduct of the Company. The Company denies liability and
alleges that this individual dealt with others in a series
of transactions that did not directly involve the Company.
Notwithstanding the contentions of the parties, the
Company views this matter as a potential claim, and should
this individual file a lawsuit, this individual would
possibly name the Company as a defendant. This individual
has demanded the sum of $71,000 plus interest at 10% plus
$2,000 in costs. The Company anticipates that should a
civil complaint be filed, it would include a variety of
causes of action ranging from contract claims to tort
claims, some of which would include claims based on
misrepresentations of facts. On May 17, 2000, this
individual was issued 250,000 shares of free trading stock
of the Company and 500,000 shares of restricted stock of
the Company. As a result of the issuance of the stock,
this individual released all claims against the Company.

During May 1998, the Company signed an agreement with an
individual to promote the Company's products. The Company
gave this individual 25,000 shares of common stock at the
date the agreement was signed. If this individual was
promoting the Company's products one year from the date
the agreement was signed, the individual was to receive an
additional 25,000 shares of common stock which was issued
during the year ended June 30, 1999. If this individual
was promoting the Company's products two years from the
date the agreement was signed, the individual was to
received an additional 25,000 shares on common stock. The
Company expects to issue all of the common stock to this
individual as a result of this agreement.

<PAGE>

The Company is also a defendant in a lawsuit whereby the
plaintiffs allege a breach of a lease agreement. The
leased premises were sold to another entity and the
Company currently has a lease with this entity. The
amount sought by the plaintiff is $14,831. The Company
has asserted various defenses to the claims and is
currently defending the action, there have been initial
settlement discussion and it is anticipated that the
matter will be settled by way of a compromise and
stipulation agreement.

Additionally, the Company is involved in a dispute of the
sponsoring of a professional boat race in Nevada. The
Company has not made an appearance in court and does not
know the status of that action as it has not been
contacted by the plaintiff and has not received any
notification of any action taken by the plaintiff with
regards to the prosecution of the action. The amount
demanded by the plaintiff is $6,000 plus 40,000 shares of
common stock.

NOTE 12 - SUBSEQUENT EVENTS

In addition to subsequent events described elsewhere, the
Company entered into the following transactions which
occurred subsequent to June 30, 1999. The Company received
a loan of $20,000 from an unrelated third party. Interest
on the loan is at the rate of 7% and the loan is due June
30, 2000. As consideration for lending the Company money,
this individual received 400,000 share of common stock.
The value of the shares is $20,000 or $0.05 per share.

The Company signed an operating lease to extend the lease
of the office space through December 2000. The monthly
rental payments are $1,530.

The Company signed an agreement with a racing school to
provide sponsorships for scholarships. The Company issued
250,000 shares of common stock and committed to provide
$15,000 for the scholarships. The value of the shares is
$1,250 or $0.05 per share.

The Company signed an agreement with an individual to use
and write about the Company's products in various magazine
articles. The Company gave this individual 200,000 shares
of common stock for the services to be provided. The
value of the shares is $10,000 or $0.05 per share.

The Company signed agreements with various race car
drivers to use and promote the Company's products. The
Company issued 300,000 shares of the Company's common
stock which has been valued at $15,000 or $0.05 per share.

On April 15, 2000, the Company issued 1,694,500 shares of
common stock for various services performed for the
Company. The value of the services performed was $84,725
or $0.05 per share.

On May 18, 2000, the Company issued 218,000 shares of
common stock for various services performed for the
Company. The value of the services performed was $10,900
or $0.05 per share.

<PAGE>

On June 6, 2000, the Company issued 1,081,000 shares of
common stock for various services performed for the
Company. The value of the services performed was $54,050
or $0.05 per share. Also on June 6, the Company purchased
2,000,000 shares from the president of the Company for
$20,000 or $0.01 per share. This amount was accrued and
added to amounts already owed to the president.

<PAGE>