BOOTS & COOTS INTERNATIONAL WELL CONTROL INC, S-1, 1998-06-01

BOOTS & COOTS INTERNATIONAL WELL CONTROL INC
S-1, 1998-06-01
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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 1, 1998.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------------

FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)

1389
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NO.)

11-2908692
(I.R.S. EMPLOYER IDENTIFICATION NO.)

5151 SAN FELIPE, SUITE 450
HOUSTON, TEXAS 77056
(713) 621-7911
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

THOMAS L. EASLEY COPIES TO:
VICE PRESIDENT & CHIEF FINANCIAL DALLAS PARKER
OFFICER BROWN, PARKER & LEAHY, L.L.P.
BOOTS & COOTS INTERNATIONAL WELL 1200 SMITH STREET, SUITE 3600
CONTROL, INC. HOUSTON, TEXAS 77002
5151 SAN FELIPE, SUITE 450 (713) 654-8111
HOUSTON, TEXAS 77056
(713) 621-7911
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

Approximate Date of Commencement of Proposed Sale to the Public: FROM TIME
TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT AS DETERMINED
BY THE SELLING SECURITY HOLDERS.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF MAXIMUM AGGREGATE AMOUNT OF
SECURITIES AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED(1) REGISTERED PER SHARE(2) PRICE(2) FEE
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<S> <C> <C> <C> <C>
Common Stock, $0.00001
par value.............. 15,363,043 shares $6.00 $ 92,178,258 $27,192.59
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Common Stock Underlying
Warrants............... 3,833,541 shares $6.00 $ 23,001,246 $ 6,785.37
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Total................... 19,196,584 shares $6.00 $115,179,504 $33,977.96
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</TABLE>
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(1) Includes such additional number of shares as may become issuable by reason
of anti-dilution provisions pursuant to Rule 416.
(2) Estimated for the purpose of calculating the registration fee pursuant to
Rule 457(c) on the basis of the average of the high and low prices
reported in the consolidated reporting system, as reported on the American
Stock Exchange Quotation Bureau, Inc., for May 22, 1998.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

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BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

CROSS-REFERENCE SHEET

This cross-reference sheet is provided pursuant to Item 501(b) of Regulation
S-K showing the location in the Prospectus of information required by Part I of
Form S-1:

<TABLE>
<CAPTION>
FORM S-1 ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS
-------------------------------- ----------------------
<C> <S> <C>
1. Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus.... Front of Registration Statement and Outside
Front Cover Page of Prospectus
2. Inside Front and Outside Back
Cover Pages of Prospectus... Inside Front and Outside Back Cover Pages
of Prospectus
3. Summary Information, Risk
Factors and Ratio of
Earnings to Fixed Charges... Prospectus Summary; Risk Factors
4. Use of Proceeds..............
5. Determination of Offering Prospectus Summary; Use of Proceeds
Price....................... Not applicable
6. Dilution..................... Not applicable
7. Selling Security Holders..... Selling Security Holders
8. Plan of Distribution......... Outside Front Cover Page of Prospectus;
Plan of Distribution
9. Description of Securities to
be Registered............... Outside Front Cover Page of Prospectus;
Prospectus Summary; Capitalization;
Description of Securities
10. Interests of Named Experts
and Counsel................. Not Applicable
11. Information with Respect to
the Registrant.............. Outside and Inside Front Cover Pages of
Prospectus; Prospectus Summary; Risk
Factors; Use of Proceeds; Capitalization;
Dividend Policy; Common Stock Price
Information; Selected Financial Data;
Management's Discussion and Analysis of
Financial Condition and Results of
Operations; Business; Management; Principal
Shareholders; Certain Transactions;
Description of Securities; Shares Available
for Future Sale; Transfer Agent; Index to
Financial Statements
12. Disclosure of Commission
Position on Indemnification
for Securities Act
Liabilities................. Management
</TABLE>

<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 29, 1998.

PROSPECTUS

[LOGO]

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
19,196,584 SHARES OF COMMON STOCK

This Prospectus (the "Prospectus") relates to the registration by Boots &
Coots International Well Control, Inc. (the "Company"), at its own expense for
the account of the stockholders of the Company listed on Schedule A hereto
(each, a "Selling Security Holder" and, collectively, the "Selling Security
Holders"), of 19,196,584 shares (the "Shares") of the Company's common stock,
$.00001 par value per share (the "Common Stock"), including 3,833,541 shares
underlying warrants to purchase Common Stock. See "Description of Securities."
The Selling Security Holders have not advised the Company of any specific plans
for the distribution of the Shares, but it is anticipated that the Shares may
be sold from time to time in transactions (which may include block
transactions) on the American Stock Exchange ("AMEX") at the market prices then
prevailing. Sales of the Shares may also be made through negotiated
transactions or otherwise. The Selling Security Holders and the brokers and
dealers through which the sales of the Shares may be made may be deemed to be
"underwriters" within the meaning set forth in the Securities Act of 1933, as
amended (the "Securities Act"), and their commissions and discounts and other
compensation may be regarded as underwriters' compensation. The period of
distribution of the Shares may occur over an extended period of time, but will
not in any event be longer than twelve months from the effective date of this
Prospectus. The Selling Security Holders will pay agency or brokerage
commissions incurred in the sale of the Shares. See "Plan of Distribution."

The holders of an aggregate of 11,341,653 Shares offered hereby are subject
to restrictions which limit the number of such shares they are permitted to
sell during a given period pursuant to this Prospectus. Such holders are
permitted to sell no more than fifty percent of the Shares owned by them
offered hereby during the first three months after the effective date of the
registration statement of which this Prospectus forms a part, and no more than
twenty-five percent during the following three month period. At the expiration
of six months from the effective date of the registration statement, such
holders may sell their shares without being subject to such restrictions.

No person shall be entitled to use this Prospectus for any purpose until such
persons shall have first obtained the consent of the Company for such use. Such
consent may be given subject to conditions, among which may be requirements
such as that the offering be delayed pending an amendment or supplement to this
Prospectus, that it be accomplished in an organized manner through securities
dealers and that it be limited as to the number of shares sold.

The Company's Common Stock is traded on AMEX under the symbol "WEL". On May
22, 1998, the last sales price per share of Common Stock was $6.00.

THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" COMMENCING ON PAGE 9.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

The sale of the Shares is not being underwritten in this Offering and the
Company will not receive any proceeds from the sale of the Shares. (See
"Prospectus Summary--The Offering", "Use of Proceeds" and "Selling Security
Holders"). The Shares being registered for the account of the Selling Security
Holders may be sold by the Selling Security Holders or their transferees
commencing on the date of this Prospectus. Sales of the Shares by the Selling
Security Holders or their transferees may depress the price of the Common Stock
on AMEX and in any other market that may develop therefor.

THE DATE OF THIS PROSPECTUS IS MAY [ ], 1998
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AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports and other information with the Securities and
Exchange Commission (the "Commission"). The reports and other information
filed by the Company with the Commission can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices at 7 World Trade Center, 13th Floor, New York, New York 10048 and
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511. Copies of such material can also be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Room 1025, Washington, D.C.
20549, at prescribed rates. Also, the Commission maintains a Web site
(http://www.sec.gov) that contains reports, proxy and information statements
and other information regarding registrants (such as the Company) that file
electronically with the Commission.

The Common Stock of the Company is traded on AMEX under the symbol "WEL".
The Company's registration statements, reports, proxy and information
statements, and other information may also be inspected at AMEX at 86 Trinity
Place, New York, New York 10006.

The Company has filed with the Commission a Registration Statement on Form
S-1 (the "Registration Statement") under the Securities Act of 1933, as
amended, with respect to the Shares offered hereby. This Prospectus is filed
as a part of the Registration Statement and does not contain certain
information set forth in or annexed as exhibits to the Registration Statement.
Reference is made to such exhibits to the Registration Statement for the
complete text thereof. For further information with respect to the Company and
the Shares offered hereby, reference is made to the Registration Statement and
to the exhibits filed as a part thereof, which may be inspected at the office
of the Commission without charge, or copies thereof may be obtained therefrom
upon payment of a fee prescribed by the Commission. Statements contained in
this Prospectus regarding the contents of any contracts or other documents are
not necessarily complete and, in each instance, reference is made to the copy
of such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

All reports and definitive proxy or information statements filed by the
Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus shall be deemed to be incorporated
by reference into this Prospectus from the date of the filing of such
documents.

Any statement contained in a document incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.

Where any document or part thereof is incorporated by reference into this
Prospectus but not delivered herewith, the Company undertakes to provide
without charge to each person, including any beneficial owner, to whom this
Prospectus is delivered, upon written or oral request of such person, a copy
of any and all information that has been incorporated by reference into this
Prospectus. Requests for copies should be directed to Thomas L. Easley, Chief
Financial Officer, Boots & Coots International Well Control, Inc., 5151 San
Felipe, Suite 450, Houston, Texas 77056 (Telephone: (713) 621-7911).

2
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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 4
Risk Factors.............................................................. 9
Use of Proceeds........................................................... 16
Capitalization............................................................ 16
Dividend Policy........................................................... 17
Common Stock Price Information............................................ 18
Selected Consolidated Financial Data...................................... 19
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 20
Business.................................................................. 23
Management................................................................ 34
Principal Shareholders.................................................... 42
Selling Security Holders.................................................. 43
Plan of Distribution...................................................... 44
Certain Transactions...................................................... 45
Description of Securities................................................. 46
Shares Available for Future Sale.......................................... 52
Transfer Agent............................................................ 52
Legal Matters............................................................. 53
Experts................................................................... 53
Financial Statements...................................................... F-1
Schedule A--List of Selling Security Holders.............................. A-1
</TABLE>

NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE OFFERING OF THE SHARES MADE HEREBY AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS CANNOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY OTHER PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY DISTRIBUTION OF SECURITIES MADE PURSUANT THERETO SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

3
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PROSPECTUS SUMMARY

The following summary is qualified by, and must be read in conjunction with,
the more detailed information and financial statements and the notes thereto
set forth elsewhere in this Prospectus. As used herein, the "Company" refers to
Boots & Coots International Well Control, Inc., together with its consolidated
subsidiaries, unless the context otherwise requires.

THE COMPANY

Boots & Coots International Well Control, Inc. (the "Company"), is a global-
response oil and gas service company that specializes in responding to and
controlling oil and gas well emergencies, including blowouts and well fires. In
connection with such services, the Company has the capacity to supply the
equipment, expertise and personnel necessary to contain the oil and hazardous
materials spills and discharges associated with such oil and gas emergencies,
to remediate affected sites and restore affected oil and gas wells to
production. In addition to providing emergency response services, the Company
provides snubbing and other non-critical well control services, including pre-
event planning, training and consulting services. The Company also manufactures
and markets oil and hazardous materials spill containment and recovery
equipment. In addition, the Company provides environmental remediation services
to the chemical manufacturing and transportation industries, as well as to
various state and federal agencies, and provides materials and equipment
procurement, transportation and logistics services to the energy industry. See
"Business."

The Company's business was established by six former key employees of the Red
Adair Company, an oil well firefighting and blowout control company that
dominated the industry during the 1960's and 1970's. Those key employees
resigned their positions with the Red Adair Company and, in June 1995, formed
IWC Services, Inc. ("IWC Services"), a subsidiary of the Company, after Mr.
Adair retired and sold his business to outsiders. In 1997, the Company acquired
all of the operating assets of Boots & Coots, L.P. ("Boots & Coots"), a
provider of oil and gas well firefighting and blowout control services, and
hired the majority of Boots & Coots' senior well control specialists. The
Company's current staff of well control specialists has a combined total of
over 220 years' experience in blowout control and oil and gas well firefighting
and an excellent safety record. Throughout their careers, these professionals
have worked in nearly all of the major oil and gas producing regions in the
world and have controlled more than 4,000 blowouts and well fires, including
the 1963 Devil's Cigarette Lighter fire, the 1988 Piper-Alpha Platform disaster
and the 1991 Burgan Field fires that were started by Iraqi troops during their
retreat from Kuwait during the Gulf War. See "Business" and "Management."

RECENT DEVELOPMENTS

The Company has undertaken a number of initiatives to respond to ongoing
changes in the oil and gas well firefighting and blowout control business and
to expand the scope of services it offers, including: (i) in September 1995,
the Company entered into a global strategic alliance with Halliburton Energy
Services, a division of Halliburton Company ("Halliburton"); (ii) in 1995 the
Company began offering consulting services to oil and gas producers and well
operators, including training, contingency planning, safety inspections and
emergency response drills; (iii) in December 1996, the Company entered into an
agreement with a consortium of oil producers to establish and maintain an
industry supported "Emergency Response Center" on the North Slope of Alaska and
in connection therewith, the Company has sold to such producers the equipment
required to respond to a well blowout or fire and agreed to maintain the
equipment and to conduct on-site safety inspections and emergency response
drills; (iv) on July 31, 1997, the Company completed the purchase of the
operating assets of Boots & Coots, L.P., one of its principal oil and gas well
firefighting competitors, including all of the capital stock of its
subsidiaries, Boots & Coots Overseas, Ltd. and Boots & Coots de Venezuela, S.A.
(hereinafter collectively referred to as "Boots & Coots"), (v) on September 25,
1997, the Company completed the purchase of all of the outstanding capital
stock of Abasco, Inc. ("Abasco"), a manufacturer of oil containment booms, mops
and other oilfield emergency equipment and products, (vi) on January 2, 1998,
the Company purchased all

4
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of the outstanding capital stock of ITS Supply Corporation ("ITS"), formerly
the supply and logistics division of International Tool & Supply Company, Inc.,
(vii) on February 6, 1998, the Company announced the formation of an alliance
with Global Special Risks, Inc. ("Global Special Risks"), pursuant to which
Global Special Risks, a managing general insurance agent located in Houston,
Texas, and New Orleans, Louisiana, will offer traditional well and blowout
insurance combined with the Company's post-event response and pre-event
planning and preventative services in a program known as "WELLSURE"(SM), (viii)
on February 20, 1998, the Company completed the acquisition of all of the
outstanding capital stock of Code 3, Inc. ("Code 3"), an emergency response
hazardous materials and oil spill containment and remediation company, and (ix)
on May 5, 1998, the Company announced that it had entered into a letter of
intent to purchase Elmagco, Inc., d/b/a Baylor Company ("Baylor"), a
manufacturer of an extensive line of industrial and oil field equipment. The
Company believes that these initiatives, along with other components of the
Company's business strategy, will strengthen the Company's competitive position
in the worldwide oil, gas and petrochemical emergency response business while
expanding its operations into complementary businesses. See "Business."

HALLIBURTON ALLIANCE

In response to changes in the emergency response segment of the oil field
services industry, the Company has, among other things, entered into a global
strategic alliance with Halliburton, a leader in the pumping, cementing,
snubbing, production enhancement, coiled tubing and related services segment of
the oil field services industry. The alliance between the Company and
Halliburton (the "Halliburton Alliance"), which is called "WELLCALL"(SM), draws
on the expertise and abilities of both companies to offer an integrated well
control solution for oil and gas producers worldwide. The Halliburton Alliance
provides a complete range of well control services including pre-event
troubleshooting and contingency planning, snubbing, pumping, blowout control,
debris removal, firefighting, relief and directional well planning, and other
specialized services. As a result of the Halliburton Alliance, the Company is
directly involved in all Halliburton well control projects that require
firefighting expertise. Halliburton is a primary service vendor to the Company
and the Company has exclusive rights to use certain tools and technologies
developed by Halliburton.

A component of the Company's business strategy is to pre-position in selected
geographic locations throughout the world complete complements of specialty
firefighting equipment and ancillary tools and equipment ("Emergency Response
Center") as warranted to support its firefighting operations. The Company
currently has Emergency Response Centers in Houston, Texas, Duncan, Oklahoma,
Anaco, Venezuela and maintains an industry supported Emergency Response Center
on the North Slope of Alaska. The Company believes that a majority of future
Emergency Response Centers will be established at existing Halliburton
facilities. It is also expected that the maintenance of the Emergency Response
Center equipment and the initial mobilization of emergency response teams from
such Emergency Response Centers will be handled by Halliburton employees who
have been specially trained by the Company to act as "First Responders." The
Halliburton Alliance also gives the Company direct access to the administrative
and logistical support of Halliburton's credit department and global
communications and currency management systems. This access is expected to
improve the administrative efficiency of the Company's international
operations. Management of the Company believes that the Halliburton Alliance
provides a distinct strategic marketing advantage over certain competitors. See
"Business--Halliburton Alliance."

BAYLOR ACQUISITION

On May 5, 1998, the Company announced that it had entered into a letter of
intent to acquire Baylor, a Houston-based manufacturer of an extensive line of
products for industrial, commercial oil and gas services, as well as
governmental applications. Baylor's line of products include Elmagco(R) Brakes,
brake controls, brake monitors, closed loop cooling systems, Thyrig(TH) Drive
Systems, deepwater thrusters and mooring systems as well as AC generators sold
under the trade names EMD, Delco and Baylor, worldwide. Baylor reported audited
1997 revenues of approximately $31 million and net income of approximately
$3,409,000. The acquisition of Baylor is subject to customary conditions to
closing, including the negotiation of definitive agreements and obtaining
necessary regulatory approvals. Prudential Securities Incorporated has been
retained by the Company as investment banking advisor for the transaction and
other capital raising activities currently underway.

5
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The Company views the acquisition of Baylor as complementary to its business
strategy of expanding its suite of services to include everything from pre-
event engineering and contingency planning through the control and restoration
to production of the well, as well as the Company's objective of achieving a
more diversified revenue base.

The purchase price to be paid by the Company for Baylor, subject to certain
adjustments, is $30,000,000, of which $25,000,000 will be paid in cash at
closing, with the remainder to be paid in shares of Common Stock of the
Company. The basis for valuing the shares to be issued has yet to be
determined. The letter of intent provides for a fee of $1,000,000 to be paid by
the Company in the event that the Company unilaterally terminates negotiations,
fails to enter into a definitive agreement by June 15, 1998, or fails to close
the transaction by July 15, 1998, unless (A) a material adverse change occurs
in comparison to December 31, 1997: (i) in the financial condition, operations
or business prospects of Baylor and its subsidiaries, taken as a whole, (ii) in
the fair market value of Baylor's assets, or (iii) the amount of Baylor's
liabilities required to be accrued under generally accepted accounting
principles; (B) the parties are unable, after using their best efforts, to
obtain necessary regulatory approvals, (C) Begemann, Inc., the seller under the
letter of intent, fails to proceed expeditiously in good faith to enter into a
definitive agreement by June 15, 1998, or thereafter to close by July 15, 1998,
or (D) the Company is unable, after using its best efforts in good faith, to
negotiate a reasonably satisfactory employment agreement with H.B. Payne, Jr,
President of Baylor.

BUSINESS STRATEGY

Over the next few years, the Company intends to continue to expand its
operations and to build upon its demonstrated strengths. The Company intends to
promote the Halliburton Alliance and the WELLSURE(SM) program, continue to
integrate the acquired businesses of Boots & Coots, Abasco, ITS and Code 3,
consummate the acquisition of Baylor, increase the geographical scope of its
training and consulting programs, and establish additional Company-owned
Emergency Response Centers at locations outside the United States. In general,
the Company plans to offer a broader range of services to oil and gas producers
worldwide, thereby increasing both the scope of its target market and its
market share. The Company intends to expand its service capabilities through a
combination of internal growth, additional acquisitions, joint ventures and
strategic alliances.

The implementation of the Company's business strategy, including the
consummation of the acquisition of Baylor and any additional acquisitions, is
expected to require substantial additional capital from outside sources. The
completion of the acquisitions of Boots & Coots, Abasco, ITS and Code 3
required a substantial portion of the Company's cash reserves. The acquisition
of Baylor is expected to require cash of approximately $25,000,000. In
addition, the Company has short-term debt obligations incurred in connection
with the acquisitions of Boots & Coots, ITS and Code 3 of approximately
$9,250,000 which comes due on or before October 1, 1998, and the Company
anticipates redeeming all of the Company's 10% Junior Redeemable Convertible
Preferred Stock, $.00001 par value ("Redeemable Stock") issued in the Company's
private placement of up to 400,000 Units, each consisting of one share of
Redeemable Stock and one warrant representing the right to purchase five shares
of Common Stock at $5.00 per share, before such shares become convertible into
Common Stock. As of the date hereof, 112,000 shares of Redeemable Stock are
issued and outstanding. See "Description of Securities--Description of Units."
The Company is pursuing a number of financing alternatives to meet its capital
requirements. However, the Company does not currently have any commitments in
this regard. See "Risk Factors--Need for Additional Capital" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 (the "Securities Act") and Section
21E of the Securities Exchange Act of 1934 (the "Exchange Act"). All statements
other than statements of historical facts included or incorporated by reference
in this

6
<PAGE>

Prospectus, including, without limitation, statements regarding the Company's
financial position, business strategy, budgets, and plans and objectives of
management for future operations are forward-looking statements. In addition,
the words "anticipate," "estimate," "except," and similar expressions are
intended to identify forward-looking statements. Although the Company believes
that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to have
been correct. Important factors that could cause actual results to differ
materially from the Company's expectations ("Cautionary Statements") are
disclosed under "Risk Factors" and elsewhere in this Prospectus and the
documents incorporated by reference herein. All written and oral forward-
looking statements attributable to the Company, or persons acting on its
behalf, are expressly qualified in their entirety by the Cautionary Statements.

OFFICES

The Company's principal executive office is located at 5151 San Felipe, Suite
450, Houston, Texas, 77056 (Telephone: (713) 621-7911).

THE OFFERING

SECURITIES OFFERED.......... 19,196,584 shares of Common Stock of the Company,
including 3,833,541 shares underlying warrants to
purchase Common Stock. See "Description of
Securities."

SECURITIES REGISTERED FOR
THE SELLING SECURITY
HOLDERS.................... All of the shares of Common Stock being
registered hereby are being registered for the
account of the stockholders of the Company listed
on Schedule A hereto (each a "Selling Security
Holder" and, collectively, the "Selling Security
Holders.") The Selling Security Holders' Shares
are being registered for resale only, and the
Company will not receive any of the proceeds from
any sales of such Shares by the Selling Security
Holders. See "Use of Proceeds"

COMMON STOCK
OUTSTANDING(1).............. 30,728,298 shares

USE OF PROCEEDS............. All of the Shares offered hereby are being
registered for the account of the Selling
Security Holders for resale only, and the Company
will not receive any of the proceeds from any
sales of such Shares by the Selling Security
Holders. See "Use of Proceeds."
- --------
(1) None of the Shares being offered hereby will be newly-issued shares;
rather, the Shares are being registered for the account of the Selling
Security Holders and are already outstanding. Therefore, the number of
shares of the Company's Common Stock outstanding both prior to and after
the Offering will be the same. This number does not take into account
outstanding options and warrants to purchase an aggregate of 6,502,269
shares of Common Stock, or restricted stock grants of 1,835,000 shares of
Common Stock.

SEE "RISK FACTORS" BEGINNING ON PAGE 9, FOR A DISCUSSION OF CERTAIN RISKS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OF COMMON
STOCK OFFERED HEREBY.

7
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL INFORMATION

The following table sets forth certain historical financial data of the
Company for each of the fiscal years ended from inception and as of June 30,
1996 and 1997 and the six months ended December 31, 1996 and 1997, which was
derived from the Company's audited consolidated financial statements. Also set
forth below is selected financial data for the three months ended March 31,
1997 and 1998, which was derived from the unaudited consolidated financial
statements of the Company. In the opinion of management of the Company, the
unaudited consolidated financial statements include all adjustments (consisting
only of normal recurring adjustments) necessary for a fair presentation of the
financial data for such period. The results of operations for the three months
ended March 31, 1997 and 1998 are not necessarily indicative of results for a
full fiscal year. The data should be read in conjunction with the Consolidated
Financial Statements (including the Notes thereto) and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
elsewhere herein.

<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS ENDED THREE MONTHS ENDED
---------------------- ------------------------- ------------------------
JUNE 30, JUNE 30, DECEMBER 31, DECEMBER 31, MARCH 31, MARCH 31,
1996 1997 1996 1997 1997 1998
---------- ---------- ------------ ------------ ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.............. $1,662,000 $2,564,000 $ 743,000 $5,389,000 $ 240,000 $11,959,000
Operating income
(loss)............... $ (481,000) $ (68,000) $ (397,000) $ (432,000) $ (350,000) $ 981,000
Net income (loss)..... $ (339,000) $ (156,000) $ (409,000) $ (759,000) $ (360,000) $ 156,000
Net income (loss) per
share................ $ (0.03) $ (0.01) $ (0.04) $ (0.03) $ (0.03) $ 0.01
Weighted average
common shares
outstanding.......... 11,500,000 12,191,000 11,500,000 23,864,000 12,136,000 30,228,000
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31, MARCH 31,
1997 1997 1998
---------- ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Total assets............................ $3,424,000 $14,061,000 $36,577,000
Working capital (deficiency)............ $1,235,000 $ 2,311,000 $(3,578,000)
Shareholders' equity.................... $ 826,000 $10,232,000 $13,225,000
Common shares outstanding............. 14,187,000 29,999,000 30,579,000
</TABLE>

8
<PAGE>

RISK FACTORS

The Shares of Common Stock offered hereby involve a high degree of risk,
including, but not limited to, the risk factors described below. Prospective
purchasers should carefully consider the following risk factors, together with
all other information set forth in this Prospectus, prior to making a decision
to purchase any of the shares of Common Stock offered hereby.

BUSINESS RISKS

Need for Additional Capital. The oil field services industry is capital
intensive and limited financial resources have impeded the Company's growth in
the past. The Company's cash expenditures in connection with the acquisitions
of Abasco, ITS and Code 3 required a substantial portion of the Company's cash
reserves. Further, the terms upon which Abasco, ITS and Code 3 were acquired
allowed the sellers to retain most or all of the working capital of such
companies. The Company currently requires additional working capital to fund
its existing operations and to repay indebtedness in the aggregate principal
amount of $9,250,000 which comes due on or before October 1, 1998. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources." The potential acquisition of
Baylor is expected to require cash of approximately $25,000,000. Additionally,
the Company's business strategy anticipates acquisitions of complementary
businesses, which will require significant additional capital. See "Business--
Business Strategy." To date, the Company has funded its operations and
acquisitions from: equity capital contributed by its officers, directors and
principal stockholders; proceeds from the sale in July 1997 of $3,000,000 of
the Company's 12% Senior Subordinated Notes due December 31, 2000 (the
"Subordinated Notes") (of which $2,900,000 has been converted into 3,866,653
shares of Common Stock); $6,481,000 in net proceeds from the private
placement, in September 1997, of 7,475,000 shares of Common Stock (the
"September Private Placement"); $4,500,000 in net proceeds from the private
placement, in January 1998, of the Company's 10% Senior Secured Notes due May
2, 1998 (the "Senior Notes") which have been extended until October 1, 1998;
$2,250,000 in net proceeds from the private placement, in March 1998, of
additional Senior Notes due June 15, 1998 ("Additional Senior Notes") which
have been extended until October 1, 1998; seller financing in the aggregate
principal amount of $5,760,977, of which approximately $2,000,000 remains
outstanding as of the date hereof; and approximately $2,618,000 in net
proceeds from the private placement of 112,000 Units through May 27, 1998,
each consisting of one share of the Company's Redeemable Stock and one warrant
("Unit Warrant") representing the right to purchase five shares of Common
Stock of the Company at a price of $5.00 per share.

If the Company is unable to obtain adequate financing to meet its capital
requirements, it may be forced to restructure its current indebtedness, sell
assets to repay the indebtedness, curtail its plans for expansion and finance
its business activities with only such internally generated funds as may then
be available. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources."

Risks Related to the Company's Acquisition Strategy; History of Losses;
Uncertainty of Future Profitability. A primary component of the Company's
business strategy is to increase the size and scope of the Company's business
operations through acquisitions of complementary businesses. Since mid-1997,
the Company has been engaged in an aggressive acquisition program--having
acquired the business operations of Boots & Coots, Abasco, ITS and Code 3 and
having entered into a letter of intent to acquire Baylor. The Company
anticipates that acquisitions will continue to play an important role in its
growth for the foreseeable future. There can be no assurance, however, that
the Company will be able to identify and acquire additional companies. As of
June 30, 1997, IWC Services, an operating subsidiary of the Company, had
incurred cumulative operating losses of approximately $222,606 since
commencement of business activities in May 1995. In connection with the
acquisitions of Boots & Coots, Abasco, ITS and Code 3, and the potential
acquisition of Baylor, a primary acquisition evaluation criteria was that each
company was profitable and possessed seasoned and capable management. The
Company has retained such management and the key employees of the acquired
businesses in their previous roles. However, in certain instances the acquired
companies have only recently achieved

9
<PAGE>

profitability and there can be no assurance that the Company will be able to
profitably manage the companies that it has acquired or that it may acquire in
the future, or that the Company will successfully integrate such companies
with its existing operations without substantial costs, delays or other
problems. Further, there can be no assurance that such acquired companies will
achieve sales and profitability that justify the Company's investment in them.

Acquisitions may involve a number of special risks, including adverse short-
term effects on the Company's reported operating results, diversion of
management's attention from the Company's on-going operations, dependence on
retention, hiring and training of key personnel, unanticipated problems
related to the acquired businesses or resulting from the acquisition, legal
liabilities associated with the acquired businesses and amortization of
acquired intangible assets, some or all of which could have a material adverse
effect on the Company's operations and financial performance. Further,
acquisitions place a significant strain on the Company's managerial,
administrative, operational and financial resources and increased demands on
its systems and controls. To manage growth effectively, the Company will need
to expand and improve its operational, management and financial systems and
controls. Although the Company has sought to acquire well-managed businesses
and has entered into employment agreements to retain key management personnel,
certain of the Company's key employees have not had experience in managing a
company the size of the Company or larger. If the Company's management is
unable to manage the Company's expansion effectively, the Company's business,
results of operations and financial condition could be materially adversely
affected. See "Business--Business Strategy."

Volatility of Revenues. The Company's well control business revenues, which
accounted for approximately 82% of its revenues for the six month period ended
December 31, 1997, and 20% of its revenues for the three months ended March
31, 1998, are dependent, to a significant extent, on the global market for oil
and gas well firefighting and blowout control services, which market is highly
volatile due to factors beyond the control of the Company. While the demand
for firefighting and blowout control services ordinarily follows predictable
trends in the oil and gas industry, extraordinary events such as the Bay
Marchand and Piper Alpha disasters can be expected to occur only every four to
six years. Wars, acts of terrorism and other unpredictable factors may
increase the need for oil and gas well firefighting and blowout control
services from time to time. The Company's historical revenue levels are
therefore not necessarily indicative of the Company's future revenue levels.
While the Company believes that its acquisitions of Boots & Coots, Abasco, ITS
and Code 3 and anticipated revenues from the WELLSURESM program and from the
Company's consulting, well plugging and abandonment, training and industrial
and marine firefighting services will help to provide an expanded and
predictable revenue and earnings base in the future, there can be no assurance
that the Company will be successful in further developing these acquired
businesses and added services. Accordingly, the Company expects that its
revenues and operating performance may vary considerably from year to year for
the foreseeable future.

Operating Hazards; Liability Insurance Coverage; Litigation. The Company's
operations involve ultra-hazardous activities that present an extraordinarily
high degree of risk. Such operations are subject to accidents resulting in
personal injury and the loss of life or property, environmental mishaps and
mechanical failures, and litigation arising from such events may result in the
Company being named a defendant in lawsuits asserting large claims. The
Company may be held liable in certain circumstances, including if it fails to
exercise reasonable care in connection with its activities, and it may also be
liable for injuries to its agents, employees and contractors who are acting
within the course and scope of their duties. The Company and its subsidiaries
presently maintain liability insurance coverage with aggregate policy limits
which are believed to be adequate for their respective operations. However, it
is generally considered economically unfeasible in the oil and gas service
industry to maintain insurance sufficient to cover large claims. Accordingly,
there can be no assurance that the Company's insurance will be sufficient or
effective under all circumstances or against all hazards to which the Company
may be subject. A successful claim for which the Company is not fully insured
could have a material adverse effect on the Company. No assurance can be given
that the Company will not be subject to future claims in excess of the amount
of insurance coverage which the Company deems appropriate and feasible to
maintain.

10
<PAGE>

Reliance Upon Officers, Directors and Key Employees. The Company's emergency
response services require highly specialized skills. Because of the unique
nature of the industry and the small number of persons who possess the
requisite skills and experience, the Company is highly dependent upon the
personal efforts and abilities of its officers, directors and key employees.
In seeking qualified personnel, the Company will be required to compete with
companies having greater financial and other resources than the Company. Since
the future success of the Company will be dependent upon its ability to
attract and retain qualified personnel, the inability to do so, or the loss of
personnel, could have a material adverse impact on the Company's business. See
"Management."

Reliance on Major Customers; No Assurance of Contract Extension.
Approximately $12,230,000, or approximately 90%, of Boots & Coots' revenue for
the year ended December 31, 1996, was attributable to the use of its snubbing
equipment and crews on the Pedernales Old Well Abandonment Project in
Venezuela's lower Orinoco River Delta pursuant to a contract with British
Petroleum. The contract with British Petroleum was completed during the first
quarter of 1997. While the Company is presently seeking additional plugging
and abandonment contracts in Venezuela and elsewhere, and the Company believes
it may be able to lease certain of the snubbing units acquired from Boots &
Coots to Halliburton or other operators on a long-term basis, there can be no
assurance that the Company will be successful in its efforts to obtain
additional plugging and abandonment contracts or that the Company will be able
to lease or otherwise generate revenues from such snubbing units. The failure
to secure one or more plugging and abandonment contracts or to lease the
snubbing units to Halliburton or other operators could have a material adverse
effect on the Company's future operating performance. See "Business."

Control of the Company by Significant Stockholders. The Company's current
officers and directors own beneficially, on a combined basis, 10,943,473
shares of Common Stock, including currently exercisable options to purchase
Common Stock. The shares of Common Stock owned by the Company's current
officers and directors represent, in the aggregate, approximately 35.79% of
the issued and outstanding Common Stock (without taking into account the
potential conversion of the Redeemable Stock into shares of Common Stock or
the potential issuance of additional shares of Common Stock upon the exercise
of options or warrants). As a result, the current officers and directors of
the Company collectively have significant and perhaps controlling influence in
the election of the Company's Board of Directors and with respect to the
determination and authorization of corporate actions for an indefinite period
of time. See "Principal Shareholders." Further, in May 1995, Brian Krause, the
Company's President, Raymond Henry, the Company's Director of Well Control
Operations, Richard Hatteberg, the Company's Senior Vice President, Well
Control, and Danny Clayton, the President of IWC de Venezuela, entered into a
Voting Trust Agreement that gives Larry H. Ramming, the Company's Chairman and
Chief Executive Officer, and Mr. Henry, as co-trustees, the absolute right to
vote all shares of Common Stock now owned or hereafter acquired by Messrs.
Krause, Henry, Hatteberg and Clayton during the five-year period ending
December 31, 2000 (the "Voting Trust Agreement"); provided, that twenty
percent of the shares subject to such agreement are eligible for release
therefrom on each one year anniversary date of the Voting Trust Agreement upon
the written request of the party owning such shares. Currently, sixty percent
of such shares may be released from the Voting Trust Agreement but have not
been released. In the event that Messrs. Ramming and Henry are unable to reach
an agreement respecting the voting of such shares, the Voting Trust Agreement
designates Charles T. Phillips, attorney at law, as the tiebreaker.

Halliburton Alliance. The agreement documenting the alliance between the
Company and Halliburton (the "Alliance Agreement") provides that it will
remain in effect for an indefinite period of time, and may be terminated prior
to September 15, 2000, only for cause, or by mutual agreement between the
parties. Under the Alliance Agreement, cause for termination is limited to (i)
a fundamental breach of the Alliance Agreement, (ii) a change in the business
circumstances of either party, (iii) the failure of the Alliance to generate
economically viable business, or (iv) the failure of either party to engage in
good faith dealing. See "Business--Halliburton Alliance." Since certain of the
enumerated causes for termination of the Alliance Agreement are broadly
defined and the Alliance Agreement does not provide for specific performance
as a remedy, it is possible that Halliburton could terminate the Alliance
Agreement and enter into an agreement or agreements with one or more of the

11
<PAGE>

Company's competitors or establish one or more lines of business that are
directly competitive with the business of the Company. While the Company
considers its relationship with Halliburton to be good and believes there
currently exists no basis for termination, there can be no assurance that the
Alliance Agreement will not be terminated by Halliburton. The termination of
the Alliance Agreement could have a material adverse effect on the Company's
future operating performance.

Competition. The emergency response segment of the oil and gas services
business is a rapidly evolving field in which developments are expected to
continue at a rapid pace. The Company believes that the Halliburton Alliance,
the WELLSURE(SM) program, and its recent acquisitions of Boots & Coots, Abasco,
ITS and Code 3 will strengthen its competitive position in the industry by
expanding the scope of services that the Company offers to its customers.
However, the Company's ability to compete depends upon, among other factors,
retaining experienced personnel, increasing industry awareness of the variety
of services the Company offers, expanding the Company's network of Emergency
Response Centers, and further expanding the breadth of its available services.
Competition from other emergency response companies, some of which may have
greater financial resources than the Company, is intense and is expected to
increase as the industry undergoes additional anticipated change. The
Company's competitors may also succeed in developing new techniques, products
and services that are more effective than any that have been or are being
developed by the Company or that render the Company's techniques, products and
services obsolete or noncompetitive. The Company's competitors may also
succeed in obtaining patent protection or other intellectual property rights
that might hinder the Company's ability to develop, produce or sell
competitive products or the specialized equipment used in its business. See
"Business--Competition."

Lack of Diversification. The Company's revenues to date have been generated
principally by consulting, well control and oil and gas well firefighting
services. The addition of the plugging and abandonment, snubbing and
industrial and marine firefighting business of Boots & Coots, the oil and
chemical spill containment and remediation equipment business of Abasco, the
materials and equipment procurement and logistics business of ITS and the oil
spill and hazardous materials containment and remediation business of Code 3
are expected to mitigate the risk associated with the Company's dependence
upon its consulting, well control and oil and gas well firefighting services.
However, as these new businesses have been recently acquired, they have not
yet made a significant contribution to the operating revenues of the Company.
While the Company will seek to capitalize on the diversity provided by the
acquired businesses and, in addition, will continue to seek to develop and/or
acquire new products and services, such as the recently introduced WELLSURE(SM)
program, there can be no assurance that such efforts will prove successful.

Contractual Obligations to Customers; Indemnification. The Company
customarily enters into service contracts with its customers which frequently
contain provisions that hold the Company liable for various losses or
liabilities incurred by the customer in connection with the activities of the
Company, including, without limitation, losses and liabilities relating to
claims by third parties, damage to property, violation of governmental laws,
regulations or orders, injury or death to persons, and pollution or
contamination caused by substances in the Company's possession or control. The
Company may be responsible for any such losses or liabilities caused by
contractors retained by the Company in connection with the provision of its
services. In addition, such contracts generally require the Company, its
employees, agents and contractors to comply with all applicable laws, rules
and regulations (which may include the laws, rules and regulations of various
foreign jurisdictions) and to provide sufficient training and educational
programs to such persons in order to enable them to comply with applicable
laws, rules and regulations. Consequently, the Company may be exposed to
substantial liabilities in connection with its services. In the case of
emergency response services, the Company frequently enters into agreements
with customers which limit the Company's exposure to liability and/or require
the customer to indemnify the Company for losses or liabilities incurred by
the Company in connection with such services, except in the case of gross
negligence or willful misconduct by the Company. There can be no assurance,
however, that such contractual provisions limiting the liability of the
Company will be enforceable in whole or in part under applicable law.

Governmental Regulation. Extensive federal, state and local laws and
regulations relating to health and environmental quality in the United States,
as well as environmental laws and regulations of other countries in

12
<PAGE>

which the Company operates, may affect the operations of the Company. These
laws and regulations set various standards regulating certain aspects of
health and environmental quality and provide for penalties and other
liabilities for the violation of such standards. However, many jurisdictions
have passed legislation that exempts emergency response service companies,
such as the Company, from compliance with certain of these laws and
regulations. In certain instances, such legislation may also limit the
potential liability of the Company to third parties from its emergency
response services. However, under federal law and certain state laws, the
Company would nonetheless remain liable for its own negligence or misconduct
or for warranty claims (such as under customer contracts described above).
Liability resulting from the violation of any of these laws or regulations
could have a material adverse effect on the Company and its financial
condition. Moreover, the Company cannot predict the effects on its business of
environmental legislation or regulations that may be enacted in the future or
how existing or future laws or regulations will be administered or enforced.
The Company is required by various governmental and quasi-governmental
agencies to obtain certain permits, licenses and certificates with respect to
its operations. There can be no assurance that the Company will, in the
future, be successful in obtaining all permits, licenses and certificates
necessary to the conduct of its business.

OFFERING RISKS

Securities Market Factors. There is a limited public market for the Common
Stock, with daily trading volumes averaging approximately 36,000 shares since
January 30, 1998, when the Common Stock began trading on AMEX. Prior to such
date, the Common Stock was traded on the NASD's Over-the-Counter Electronic
Bulletin Board under the symbol "BCWC". The "public float" of the Company's
Common Stock was 2,587,094 shares on May 28, 1998, or 13.5% of the shares
being offered hereby. The large number of shares being registered hereby in
relation to the Company's existing "public float" and the limited market for
the Common Stock coupled with an imbalance of sale orders to buy orders may
result in significant instability in the market price of the Common Stock. In
addition, the stock markets are subject to periods of volatility during which
the market prices of securities can fluctuate substantially. The price of an
issuer's securities may be adversely affected by market volatility
notwithstanding a strong operating performance. General market price declines
or market volatility in the future could adversely affect the price of the
Common Stock.

Restrictive Covenants Relating to Senior Notes and Additional Senior Notes.
In connection with the sale of the Senior Notes and Additional Senior Notes in
January and March 1998, the Company and its subsidiaries have pledged all of
their assets to secure such notes and the Company has agreed to abide by
certain restrictive covenants, including that it will not redeem or otherwise
acquire its capital stock (including the Redeemable Stock), pay dividends or
make other distributions on its capital stock, be a party to certain
fundamental changes in corporate organization, incur or assume any
indebtedness, create, incur or suffer any liens on its properties or assets
(with certain limited exceptions), acquire any securities of any other entity
without consent, or transfer assets out of the ordinary course of business to
third parties. Such restrictions may make it difficult for the Company to
acquire businesses and raise the capital necessary to pursue its business
strategy without the consent and cooperation of Larry H. Ramming, the Chief
Executive Officer of the Company who purchased the Senior Notes and Additional
Senior Notes from the original holders thereof.

Conversion of the Redeemable Stock. The Company anticipates redeeming each
share of Redeemable Stock on or before the six month anniversary of its date
of issuance (from October 17, 1998, through November 22, 1998, as of the date
hereof), which is the date upon which shares of Redeemable Stock become
convertible into Common Stock. However, the Note Purchase Agreement relating
to the purchase of the Senior Notes and Additional Senior Notes (the "Senior
Note Purchase Agreement"), restricts the Company from redeeming any shares of
the Redeemable Stock until such time as the Company has retired all of the
outstanding Senior Notes and Additional Senior Notes, the aggregate principal
balance of which is currently $7,250,000. On or before October 1, 1998 (the
maturity date of the Senior Notes and Additional Senior Notes), the Company
will attempt to obtain adequate financing to retire all of the remaining
outstanding Senior Notes and Additional Senior Notes, to finance future
acquisitions and to redeem all of the shares of Redeemable Stock. If the
Company is unable to

13
<PAGE>

obtain such financing on acceptable terms and, as a result, is unable to
retire all of the remaining outstanding Senior Notes and Additional Senior
Notes, then the redemption of the Redeemable Stock may be delayed
indefinitely. Furthermore, even if the Company is successful in obtaining such
financing on a timely basis, the Company may, in its sole discretion,
determine not to redeem the Redeemable Stock if such a redemption would not be
in the best interests of the Company. Each share of Redeemable Stock that is
not redeemed on or before the six month anniversary of its date of issuance
will become convertible into Common Stock of the Company at 85% of the average
of the last reported sales prices per share of Common Stock for the ten
trading days preceding conversion, not to exceed $6.00 per share. Each
outstanding share of Redeemable Stock that is not redeemed on or before the
nine month anniversary of its date of issuance will become convertible into
such number of shares of Common Stock of the Company as is obtained by
dividing $25.00 by $2.75 (proportionately adjusted for Common Stock splits,
combinations of Common Stock and dividends paid in shares of Common Stock).
The conversion of the Redeemable Stock, therefore, might result in the
issuance of shares of Common Stock at prices below the market price of the
Common Stock. See "Risk Factors--Need for Additional Capital."

Inability of the Company to Pay Cash Dividends. The Senior Note Purchase
Agreement restricts the Company from declaring or paying any dividends on its
capital stock until such time as the Company has retired all of the
outstanding Senior Notes and Additional Senior Notes. On or before October 1,
1998 (the maturity date of the Senior Notes and Additional Senior Notes), the
Company will attempt to obtain adequate financing to retire all of the
remaining outstanding Senior Notes and Additional Senior Notes. If the Company
is unable to obtain such financing on acceptable terms and, as a result, is
unable to retire all of the Senior Notes and Additional Senior Notes on or
prior to the date dividends on the Redeemable Stock are required to be paid,
then the Company will not be permitted to declare or pay any cash dividends on
the Redeemable Stock until such time as all of the Senior Notes and Additional
Senior Notes have been retired. Accordingly, the Company may be required to
issue additional shares of Redeemable Stock (valued at $25.00 per share for
such purposes) in lieu of cash dividends.

Under Delaware law, cash dividends on capital stock may only be paid from
"surplus" or if there is no "surplus," from the corporation's net profits for
the then current or the preceding fiscal year. The ability of the Company to
pay cash dividends on its capital stock will require the availability of
adequate "surplus," which is defined as the excess, if any, of the Company's
net assets (total assets less total liabilities) over its capital (generally
the par value of its issued capital stock). There can be no assurance that
adequate surplus will be available to pay cash dividends on the Company's
capital stock or that, even if such surplus is available, the Company will
have sufficient cash to pay dividends on the Company's capital stock or that,
even if such surplus is available, that the Company will elect to pay cash
dividends. The Company has never declared or paid cash dividends on its Common
Stock and it is not anticipated that any cash dividends will be paid on its
Common Stock in the foreseeable future. While the Company's dividend policy
will be based upon the operating results and capital needs of the business, it
is anticipated that all future earnings, if any, will be retained to finance
ongoing operations and the expansion of the Company's business.

Rule 144 Sales; Shares Available for Future Sale. There are 30,728,298
shares of Common Stock issued and outstanding at the date of this Prospectus,
together with outstanding options and warrants that represent the right to
purchase up to 6,502,269 shares of Common Stock at prices ranging from $0.43
per share to $5.00 per share. Additionally, the Company has issued 112,000
shares of Redeemable Stock and Unit Warrants representing the right to
purchase 560,000 shares of Common Stock at a price of $5.00 per share and has
made restricted stock grants of 1,835,000 shares of Common Stock. Of the
30,728,298 shares of Common Stock outstanding, 8,944,620 shares are
"restricted securities" under the federal securities laws and have not been
registered for resale pursuant to this Prospectus. All such restricted
securities may, in the future, be sold in compliance with the requirements of
Rule 144 promulgated under the Act ("Rule 144"). In general, under Rule 144 as
currently in effect, any person (or persons whose shares are aggregated in
accordance with Rule 144) who has beneficially owned restricted securities for
at least one year is entitled to sell within any three-month period a number
of shares that does not exceed the greater of 1% of the issued and outstanding
shares of

14
<PAGE>

Common Stock or the reported average weekly trading volume for the four weeks
preceding the sale. Sales under Rule 144 are also subject to certain manner-
of-sale restrictions and notice requirements and to the availability of
current public information concerning the Company. Persons who have not been
affiliates of the Company for at least three months and who have held their
shares for more than two years are entitled to sell restricted securities
without regard to the volume, manner-of-sale, notice and public information
requirements of Rule 144. As a consequence, substantially all the Company's
currently restricted Common Stock will be eligible for public sale within one
year. Significant sales of currently restricted Common Stock may adversely
affect the market price for the Common Stock, particularly given the limited
trading market for such securities. See "Risk Factors--Securities Market
Factors."

15
<PAGE>

USE OF PROCEEDS

All of the Shares being offered hereby are being registered for resale only,
for the account of the Selling Security Holders, and the Company shall receive
no proceeds with respect thereto.

CAPITALIZATION

The following table sets forth the capitalization of the Company as of March
31, 1998. This table should be read in conjunction with the financial
statements of the Company, including the notes thereto, appearing elsewhere in
this Prospectus.

<TABLE>
<CAPTION>
MARCH 31,
1998(1)
-----------
ACTUAL
-----------
<S> <C>
LONG-TERM DEBT.................................................... $ 90,000
-----------
SHAREHOLDERS' EQUITY:
-----------
Preferred stock $.00001 par value; 5,000,000 shares authorized;
-0- shares issued and outstanding at March 31, 1998............ --
-----------
Common stock $.00001 par value; 50,000,000 shares authorized;
30,728,000 shares issued and outstanding at March 31, 1998..... --
-----------
Additional paid-in capital...................................... 14,050,000
-----------
Accumulated deficit............................................. (825,000)
-----------
Total shareholders' equity...................................... 13,225,000
-----------
Total capitalization............................................ $13,315,000
===========
</TABLE>
- --------
(1) This number does not take into account outstanding options and warrants
to purchase an aggregate of 6,502,269 shares of Common Stock, restricted
stock grants of 1,835,000 shares or 112,000 shares of Redeemable Stock
and Unit Warrants representing the right to purchase up to 560,000 shares
of Common Stock which have issued by the Company through May 27, 1998, in
its subsequent private offering of up to 400,000 Units. See "Description
of Securities--Stock Options and Warrants" and "Description of
Securities--Description of Units."

<PAGE>

DIVIDEND POLICY

The Company has not paid dividends on its Common Stock since its inception
and does not expect to pay any cash or other dividends in the foreseeable
future. Earnings of the Company, if any, are expected to be retained for use
in expanding the Company's business. The payment of dividends is within the
discretion of the Board of Directors of the Company and will depend upon the
Company's earnings, if any, capital requirements, financial condition and such
other factors considered relevant by the Board of Directors.

The Senior Note Purchase Agreement prohibits the Company from paying cash
dividends on the Common Stock so long as the Senior Notes or Additional Senior
Notes are outstanding. See "Risk Factors--Restrictive Covenants Relating to
Senior Notes and Additional Senior Notes." The terms of the Redeemable Stock
prohibit the Company from paying any dividends on any junior stock, including
the Common Stock, unless all dividends owing on the Redeemable Stock have been
paid in full and all shares of Redeemable Stock have been redeemed. See
"Description of Securities--Description of Units."

17
<PAGE>

COMMON STOCK PRICE INFORMATION

The Company's Common Stock is traded on AMEX under the symbol "WEL." Prior
to January 30, 1998, the Company's Common Stock was traded on the NASD's OTC
Electronic Bulletin Board under the symbol "BCWC". Prior to July 29, 1997,
there was no sustained public trading market for the Company's Common Stock.
The following table sets forth the high and low bid and asked prices per share
of the Common Stock for the calendar quarters ended September 30, 1997 and
December 31, 1997, and the high and low sales prices of the Common Stock
reported on AMEX for the calendar quarter ended March 31, 1998, and quarter
ending June 30, 1998 (through May 22, 1998).

<TABLE>
<CAPTION>
HIGH LOW
------------- -------------
BID ASKED BID ASKED
------ ------ ------ ------
<S> <C> <C> <C> <C>
Quarter ended September 30, 1997............. $ 5.50 $ 8.00 $ 1.50 $1.625
Quarter ended December 31, 1997.............. $5.625 $5.875 $3.625 $3.875
</TABLE>

The above information was obtained from National Quotation Bureau, Inc. The
above quotations reflect inter-dealer prices without retail mark-up, mark-down
or commissions and may not necessarily represent actual transactions.

<TABLE>
<CAPTION>
SALES PRICES
-------------
HIGH LOW
------ ------
<S> <C> <C>
Quarter ended March 31, 1998............................... $5.750 $4.750
Quarter ending June 30, 1998
(through May 22, 1998).................................... $7.937 $4.750
</TABLE>

On May 22, 1998, the last reported sale price of the Common Stock as
reported on AMEX was $6.00 per share. As of May 27, 1998, there were
approximately 262 holders of record of the Company's Common Stock. The Company
believes that there was a significantly larger number of beneficial holders of
Common Stock as of such date.

18
<PAGE>

SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth certain historical financial data of the
Company for each of the fiscal years ended from inception and as of June 30,
1996 and 1997 and the six months ended December 31, 1996 and 1997, which was
derived from the Company's audited consolidated financial statements. Also set
forth below is selected financial data for the three months ended March 31,
1997 and 1998, which was derived from the unaudited consolidated financial
statements of the Company. In the opinion of management of the Company, the
unaudited consolidated financial statements include all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of the financial data for such period. The results of operations
for the three months ended March 31, 1997 and 1998 are not necessarily
indicative of results for a full fiscal year. The data should be read in
conjunction with the Consolidated Financial Statements (including the Notes
thereto) and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere herein.

19
<PAGE>

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

RESULTS OF OPERATIONS

As discussed in Note B--Significant Accounting Policies in Notes to
Consolidated Financial Statements, the Company elected to change its fiscal
year from June 30, 1997, to December 31, 1997. A summary of operating results
for the fiscal years ended June 30, 1996 and 1997, the six months ended
December 31, 1996 and 1997, and the three months ended March 31, 1997 and 1998
is as follows:

<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
YEARS ENDED JUNE 30, DECEMBER 31, MARCH 31,
---------------------- ---------------------- -----------------------
1996 1997 1996 1997 1996 1997
---------- ---------- ----------- ---------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Revenues................ $1,662,000 $2,564,000 $743,000 $5,389,000 $240,000 $11,959,000
Costs and expenses:
Operating expenses.... 1,320,000 1,460,000 732,000 3,785,000 214,000 8,095,000
General and
administrative....... 773,000 1,061,000 371,000 1,536,000 343,000 2,572,000
Depreciation and
amortization......... 50,000 111,000 37,000 500,000 33,000 311,000
Operating income
(loss)............... (481,000) (68,000) (397,000) (432,000) (350,000) 981,000
Loss on debt
extinguishment....... -- -- -- (193,000) -- --
Other income
(expenses)........... 4,000 (63,000) (1,000) (92,000) (9,000) (567,000)
Income taxes
(benefit)............ (138,000) 25,000 13,000 42,000 1,000 258,000
Net income (loss)..... (339,000) (156,000) (409,000) (759,000) (360,000) 156,000
</TABLE>

Comparison of Year Ended June 30, 1996 with Year Ended June 30, 1997

Revenues were $1,662,000 for the year ended June 30, 1996 ("fiscal 1996")
compared to $2,564,000 for the year ended June 30, 1997 ("fiscal 1997"). This
increase was the result of increased market share from diversification of IWC
Service's client base.

Operating expenses were $1,320,000 for fiscal 1996, compared to $1,460,000
for fiscal 1997. The increase was the result of expanded operations in the
fourth quarter of fiscal 1997 due to expanded business activity.

General and administrative expenses were $773,000 for fiscal 1996, compared
to $1,061,000 for fiscal 1997. The increase was primarily the result of
investments in expanded corporate infrastructure and expanded marketing and
advertising to increase market share and diversify the Company's client base.

Depreciation and amortization expense increased from $50,000 for fiscal
1996, compared to $111,000 for fiscal 1997, primarily as the result of a full
year of depreciation on equipment additions made in fiscal 1996.

Other income (expenses) was $4,000 for fiscal 1996, compared to a net
expense of ($63,000) for fiscal 1997, resulting primarily from higher interest
expense on financed equipment purchases made during the 1996 period and
interest expense on the 12% Senior Subordinated Notes sold through June 30,
1997.

Income taxes for fiscal 1996, includes a credit for the reversal of a
deferred federal income tax provision of $139,000 for the 1995 start-up
period. Substantially all of the balance of income taxes for both fiscal 1996
and fiscal 1997 represents foreign taxes withheld on various international
projects.

IWC Services sustained a net loss of $339,000 for fiscal 1996, compared to a
net loss of $156,000 for the comparable period in 1997 as a result of the
revenue and expense variations discussed above.

Comparison of Six Months Ended December 31, 1996 with Six Months Ended
December 31, 1997

Revenues were $743,000 for the six months ended December 31, 1996 ("1996
Interim Period") compared to $5,389,000 for the six months ended December 31,
1997 ("1997 Interim Period"). This increase principally

20
<PAGE>

resulted from: (1) product sales from the Abasco acquisition completed in
September 1997 ($972,000); (2) sales of two fire fighting equipment packages
in the 1997 Interim Period ($908,000); and, (3) increased market share for the
Company's Well Control business unit.

Operating expenses were $732,000 for the 1996 Interim Period compared to
$3,785,000 for the 1997 Interim Period. This increase principally resulted
from: (1) cost of sales and operating expenses from the Abasco acquisition
completed in September 1997; ($632,000); (2) costs associated with the sales
of two fire fighting equipment packages in the 1997 Interim Period ($686,000);
(3) personnel and equipment mobilizations costs incurred in connection with an
international well control incident in October 1997 ($540,000); and, (4) costs
associated with an increase in personnel and support facilities resulting from
the July 31, 1997 acquisition of the Boots & Coots operating assets and growth
in the Company's Well Control business unit.

General and administrative expenses were $371,000 for the 1996 Interim
Period compared to $1,536,000 for the 1997 Interim Period. This increase
principally resulted from: (1) expenses associated from the Abasco acquisition
completed in September 1997 ($246,000); and, (2) expenses associated with an
increase in personnel and other overhead to support the Company's increased
operational level in Well Control.

Depreciation and amortization expenses increased from $37,000 for the 1996
Interim Period compared to $500,000 for the 1997 Interim Period due to the
significant increase in property and equipment acquired with the July 31, 1997
acquisition of the Boots & Coots operating assets.

The loss of debt extinguishment of $193,000 resulted from the early
conversion to common stock of $2,900,000 in face amount of the Company's 12%
Senior Subordinated Notes during the 1997 Interim Period.

The increase in other expenses from $1,000 during the 1996 Interim Period to
$92,000 during the 1997 Interim Period is principally due to interest expense
on the Company's 12% Senior Subordinated Notes.

Income taxes of $13,000 during the 1996 Interim Period and $42,000 during
the 1997 Interim Period results from foreign taxes incurred on Well Control
projects.

COMPARISON OF THREE MONTHS ENDED MARCH 31, 1997 WITH THREE MONTHS ENDED MARCH
31, 1998

Between July 31, 1997 and March 31, 1998 the Company has completed four
business acquisitions and at the same time substantially expanded its well
control and firefighting business unit. Thus, the results of operations for
the three months ended March 31, 1997 and 1998 are not comparative in nature
or scope and a traditional numerical comparison would not be meaningful.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash expenditures in connection with the acquisitions of
Abasco, ITS and Code 3 required a substantial portion of the Company's cash
reserves. Further, the terms upon which Abasco, ITS and Code 3 were acquired
allowed the sellers to retain most or all of the working capital of such
companies. To date, the Company has funded its operations and acquisitions
from: equity capital contributed by its officers, directors and principal
stockholders; proceeds from the sale in July 1997 of $3,000,000 of the
Company's 12% Senior Subordinated Notes due December 31, 2000 (the
"Subordinated Notes") (of which $2,900,000 has been converted into 3,867,000
shares of Common Stock); $6,481,000 in net proceeds from the private
placement, in September 1997, of 7,475,000 shares of Common Stock (the
"September Private Placement"); $4,500,000 in net proceeds from the private
placement, in January 1998, of the Company's 10% Senior Secured Notes due May
2, 1998 (the "Senior Notes"); $2,250,000 in net proceeds from the private
placement, in March 1998, of additional Senior Notes due June 15, 1998
("Additional Senior Notes"); and seller financing of the acquired businesses
in the aggregate principal amount of $5,761,000, of which approximately
$2,000,000 remains outstanding as of the date hereof; and approximately
$2,618,000 in net proceeds from the private placement of 112,000 Units through
May 27, 1998, each Unit consisting of one share of the Company's Redeemable
Stock and one Unit Warrant representing the right to purchase five shares of
Common Stock of the Company at a price of $5.00 per share.

21
<PAGE>

Accordingly, the Company currently needs additional working capital to fund
its existing operations and to repay indebtedness in the aggregate principal
amount of $9,250,000 which comes due on or before October 1, 1998. The Company
will continue to offer the remaining Units in its Unit offering through June
15, 1998, and is exploring various financing alternatives to enable it to
retire all of the outstanding Senior Notes, Additional Senior Notes, seller
notes and to finance future acquisitions by the Company. Such financing
alternatives include: (1) consideration for the offering through private
placement on a best-efforts basis of a convertible preferred stock offering;
(2) discussions with certain commercial banks for a secured debt facility;
and, (3) discussions regarding the possible private placement of Subordinated
Notes. Although these financing efforts are in process and not yet completed,
management believes these actions, together with cash flows from operations,
will provide adequate funding to the Company. In the event that one or more of
these financing alternatives under consideration are not accomplished, the
Company could be required to restructure current indebtedness, sell assets to
repay indebtedness, curtail expansion plans and fund business activities from
only internally generated funds. There can be no assurance, however, that the
Company will be successful in obtaining financing through alternative means on
acceptable terms.

22
<PAGE>

BUSINESS

GENERAL

Boots & Coots International Well Control, Inc. (the "Company"), is a global-
response oil and gas service company that specializes in responding to and
controlling oil and gas well emergencies, including blowouts and well fires.
In connection with such services, the Company has the capacity to supply the
equipment, expertise and personnel necessary to contain the oil and hazardous
materials spills and discharges associated with such oil and gas emergencies,
to remediate affected sites and restore affected oil and gas wells to
production. In addition to providing emergency response services, the Company
provides snubbing and other non-critical well control services, including pre-
event planning, training and consulting services. The Company also
manufactures and markets oil and hazardous materials spill containment and
recovery equipment. In addition, the Company provides environmental
remediation services to the chemical manufacturing and transportation
industries, as well as to various state and federal agencies, and provides
materials and equipment procurement, transportation and logistics services to
the energy industry.

The Company acts as a holding company for its operating subsidiaries, IWC
Services and Code 3. With the exception of Code 3, the assets and businesses
acquired as discussed below have been acquired by the Company through IWC
Services.

ACQUISITION OF IWC SERVICES

The Company acquired IWC Services on July 29, 1997, pursuant to a merger of
a wholly owned subsidiary of the Company with IWC Services whereby the Company
issued shares of Common Stock to the stockholders of IWC Services in exchange
for all of the issued and outstanding common stock of IWC Services and issued
options and warrants to purchase Common Stock of the Company in exchange for
all of the options and warrants to purchase common stock of IWC Services then
outstanding. As a result of the merger, IWC Services became a wholly-owned
subsidiary of the Company, the stockholders of IWC Services became the
beneficial holders of approximately 93% of the post-merger issued and
outstanding shares of Common Stock and the board of directors and management
of IWC Services took over the management of the Company.

IWC Services is a global-response oil and gas well control service company
that specializes in responding to and controlling oil and gas well
emergencies, including blowouts and well fires. In addition, IWC Services
provides snubbing and other non-critical well control services. IWC Services
was organized in June 1995 by six former key employees of the Red Adair
Company who resigned their positions after Mr. Adair retired and sold his
business.

ACQUISITION OF THE ASSETS OF BOOTS & COOTS

On July 31, 1997, the Company completed the acquisition of substantially all
of the operating assets of Boots & Coots, an oil well firefighting, snubbing
and blowout control services company. In connection with the acquisition of
Boots & Coots the Company acquired all interests of Boots & Coots in its
subsidiary corporations, Boots & Coots Overseas, Ltd., and Boots & Coots de
Venezuela, S.A. (collectively referred to herein as "Boots & Coots"). The
consideration paid consisted of (i) $369,000 cash payable to Boots & Coots,
(ii) $681,000 placed in escrow to pay certain debts of Boots & Coots, (iii)
the issuance of secured promissory notes of the Company in the aggregate
principal amount of $4,761,000 and (iv) 260,000 shares of Common Stock of the
Company. The Company also granted registration rights for the shares of Common
Stock received by Boots & Coots in the transaction. See "Description of
Securities--Registration Rights of Certain Security Holders."

Boots & Coots was organized by Boots Hansen and Coots Mathews, two former
employees of the Red Adair Company who, like the founders of IWC Services,
left that firm to form an independent company, which became a primary
competitor of IWC Services. As a consequence of the acquisition of Boots &
Coots, the Company became a leader in the worldwide oil well firefighting and
blowout control industry, reuniting many of the former employees of the Red
Adair Company.

23
<PAGE>

ACQUISITION OF ABASCO

On September 25, 1997, the Company completed the acquisition of Abasco,
which had acquired the operating assets of ITS Environmental, a division of
Industrial Tool and Supply Company, a recognized leader in the design and
manufacture of a comprehensive line of rapid-response oil and chemical spill
containment and reclamation equipment and products since 1975. Abasco's
products and services include mechanical skimmers, containment booms and boom
reels, dispersant sprayers, agent absorbents, response vessels, oil and
chemical spill industrial products, spill response packages, oil and chemical
spill ancillary products and waste oil recovery and remediation services. The
Company acquired Abasco for aggregate consideration consisting of
approximately $1,590,000 cash and 300,000 shares of Common Stock.

ACQUISITION OF ITS

On January 2, 1998, the Company completed the acquisition of all of the
capital stock of ITS for aggregate consideration of $6,000,000. Financing for
the acquisition of ITS was provided from working capital ($500,000); proceeds
from the issuance of the Senior Notes ($4,500,000) (see "Description of
Securities--Senior Notes and Additional Senior Notes"); and short-term bridge
financing from the seller ($1,000,000).

ITS is an ISO 9002 certified materials and equipment procurement,
transportation and logistics company that serves the energy industry
worldwide, with offices in Houston, Venezuela, Peru, Dubai (UAE) and the
United Kingdom.

ACQUISITION OF CODE 3

On February 20, 1998, the Company completed the acquisition of all of the
capital stock of Code 3. Consideration for the acquisition of Code 3 was (i)
$571,000 cash, (ii) the repayment of corporate secured debt and interest
thereon of approximately $1,250,000 through closing, and (iii) the issuance of
488,000 shares of the Company's Common Stock, of which 159,000 shares were
delivered into escrow to secure the indemnification obligations of the
stockholders of Code 3 for claims that may arise as a consequence of a breach
by such stockholders or Code 3 of the representations, warranties and
covenants contained in the definitive agreements.

Code 3, originally headquartered in Harlingen, Texas, provides containment
and remediation of hazardous material and oil spills for the railroad,
transportation and shipping industries, as well as various state and federal
governmental agencies. Code 3 also specializes in the transfer of hazardous
materials and high and low pressure liquids and industrial fire fighting and
provides in-plant remedial plan implementation, hazardous waste management,
petroleum tank management, industrial hygiene, environmental and occupational,
health and safety services. Through December 31, 1997, Code 3 operated out of
facilities in Harlingen, El Paso, Laredo, San Antonio and Houston, Texas. In
1998, emergency response facilities and equipment were added in Ft. Worth,
Texas, and Denver, Colorado.

HALLIBURTON ALLIANCE

The Company also conducts business in a global strategic alliance with the
Halliburton Energy Services division of Halliburton. The alliance operates
under the name "WELLCALL(SM)" and draws on the expertise and abilities of both
companies to offer a total well control solution for oil and gas producers
worldwide. The Halliburton Alliance provides a complete range of well control
services including pre-event troubleshooting and contingency planning,
snubbing, pumping, blowout control, debris removal, firefighting, relief and
directional well planning, and other specialized services. See "Business--
Halliburton Alliance."

HISTORY OF THE COMPANY

Boots & Coots International Well Control, Inc., formerly known as Havenwood
Ventures, Inc. ("Havenwood"), was incorporated in Delaware in April 1988.
Havenwood was originally formed to serve as a blind pool investment fund, and
in July 1988 Havenwood raised $500,000 in an initial public offering of its
Common Stock. After completing its initial public offering, Havenwood expended
its available resources in the

24
<PAGE>

development of a business enterprise which it ultimately divested, thereafter
remaining inactive, with no material assets or liabilities, until it entered
into a business combination with IWC Services on July 29, 1997.

EXECUTIVE OFFICES

The Company's principal executive office is located at 5151 San Felipe,
Suite 450, Houston, Texas, 77056 (Telephone (713) 621-7911).

INDUSTRY OVERVIEW

The oil and gas industry has enjoyed a sustained resurgence over the last
several years due to improved market conditions. The fundamental supply and
demand balance for oil and gas products began to shift in late 1992 and has
continued to improve with increased global demand for petroleum products.
Historically, the oil and gas cycle has been characterized by alternating
"boom" and "bust" periods that typically last for 12 to 14 years. The last
down cycle began in 1981 and continued through 1992, when signs of recovery
began, and by 1995, the current recovery cycle had been confirmed. Although
oil and natural gas prices have recently softened, management believes that
the fundamental market statistics and trends suggest favorable near and longer
term conditions.

The three major segments on the production side of the oil and gas industry
have generally experienced the effects of the "boom" and "bust" cycle in
distinctly different time frames. The first group to experience the effects of
cycle changes consists of exploration and production companies who plan their
drilling and development activities on the basis of current and anticipated
oil and gas prices. The next group to experience the effects of cycle changes
consists of oil field service providers, including seismic companies, contract
drilling companies, and other companies that provide pipe and drill bits,
together with logging, cementing, and other services. The last group to
experience the effects of cycle changes consists of equipment manufacturers
who are usually the last to recover when oil and gas prices increase and the
first to decline when oil and gas prices decline. Last year, for the first
time since 1982, plans were announced for the construction of a meaningful
number of new offshore drilling rigs.

Drilling activity increased in 1996 and in 1997, which, combined with
stronger drilling levels since 1993, resulted in increased numbers of wells
coming on line. Although drilling technology has improved in recent years,
thereby reducing the likelihood of a major well control event, several
industry conditions tend to offset this factor. Relatively old drilling
equipment (although generally well maintained) continues to be used. There
have been few new land or offshore drilling rigs constructed since 1981
because rig rental rates have been insufficient to justify the required
capital investment. Current worldwide utilization rates for offshore drilling
rigs are at substantially full capacity for marketable rigs and utilization
rates for land drilling rigs is increasing. Several contract drilling
companies are experiencing problems hiring experienced crews, prices for new
drill pipe have increased significantly and delivery schedules have been
extended. Management believes that these factors tend to increase the
likelihood of a major well control event. In addition, existing environmental
constraints in the U.S. and increasing awareness of environmental issues in
developing countries will require operators to emphasize training, safety and
contingency planning for potential blowout or other well control events.

THE EMERGENCY RESPONSE SEGMENT OF THE OIL FIELD SERVICE INDUSTRY

History. The emergency response segment of the oil field services industry
traces its roots to the late 1930's when Myron Kinley organized the Kinley
Company, the first oil and gas well firefighting specialty company. Shortly
after organizing the Kinley Company, Mr. Kinley hired Red Adair as an
assistant who learned the firefighting business under Mr. Kinley's supervision
and remained with the Kinley Company until Mr. Kinley's retirement. Upon Mr.
Kinley's retirement in the late 1950's, Mr. Adair organized the Red Adair
Company and subsequently hired Boots Hansen, Coots Mathews and Raymond Henry
as members of his professional firefighting staff. Thereafter, Mr. Adair added
Richard Hatteberg, Danny Clayton, Brian Krause, Mike Foreman and Juan Moran to
his professional firefighting staff and the international reputation of the
Red Adair Company

25
<PAGE>

grew to the point where it was a subject of popular films and the dominant
competitor in the industry. Boots Hansen and Coots Mathews remained with the
Red Adair Company until 1978 when they organized Boots & Coots, an independent
firefighting, snubbing and blowout control company. IWC Services was organized
in June 1995 by Messrs. Henry, Hatteberg, Clayton, Krause, Foreman and Moran
after Mr. Adair retired and sold his business.

Historically, the well control emergency response segment of the oil and gas
services industry has been reactive, rather than proactive, and a small number
of Houston-based companies have dominated the market. As a result, if an
operator in Indonesia, for example, experienced a blowout and fire, he would
likely call a well control emergency response company in Houston that would
take the following steps:

. Immediately dispatch a control team to the blowout location to supervise
debris removal, local equipment mobilization and site preparation;

. Gather and analyze the available data, including drilling history,
geology, availability of support equipment, personnel, water supplies and
ancillary firefighting resources;

. Develop a detailed fire suppression and well-control plan;

. Mobilize additional well-control and firefighting equipment in Houston;

. Air freight equipment from Houston to the blowout location;

. Extinguish the fire and bring the well under control; and

. Transport the control team and equipment back to Houston.

On a typical blowout, debris removal, fire suppression and well control can
require several weeks of intense effort and consume millions of dollars,
including several hundred thousand dollars in air freight costs alone.

The 1990's have been a period of rapid change in the oil and gas well
firefighting business. The hundreds of oil well fires that were started by
Iraqi troops during their retreat from Kuwait spurred the development of new
firefighting techniques and tools that have become industry standards.
Moreover, after extinguishing the Kuwait fires, the entrepreneurs who created
the oil and gas well firefighting industry, including Red Adair, Boots Hansen
and Coots Mathews retired, leaving the Company's senior staff as the most
experienced active oil and gas well firefighters in the world. At present, the
principal competitors in the oil and gas well firefighting business are the
Company, Wild Well Control, Inc., and Cudd Pressure Control, Inc.

Emerging Trends. Corporate downsizing and outsourcing of services, when
coupled with increased recognition of the importance of training,
environmental protection and emergency preparedness, are having a profound
impact on the emergency response segment of the oil field services industry.
Instead of waiting for a blowout, fire or other disaster to occur, major oil
producers are coming to the Company for proactive preparedness and incident
prevention programs, together with pre-event consultation on matters relating
to well control training, blowout contingency planning, on-site safety
inspections and formal fire drills.

In addition to seeking pre-event consulting services, a number of major oil
and gas producers have come to the realization that servicing the worldwide
firefighting and well control market from Houston is inefficient: the response
time is too long and the cost of transporting equipment by air freight is
prohibitive. As a result, the Company recently entered into an agreement to
establish and maintain an industry supported "Emergency Response Center" on
the North Slope of Alaska. Under the terms of the agreement, the Company has
sold to a consortium of producers the equipment required to respond to a
blowout or oil or gas well fire, and has agreed to maintain the equipment and
conduct on-site safety inspections and emergency response drills. Over the
next five years, the Company plans to establish a worldwide network of Company
owned Emergency Response Centers and to use this global presence as the
foundation to seek to establish a preeminent position in the oil and gas well
firefighting business.

26
<PAGE>

months ended March 31, 1998, are dependent, to a significant extent, on the
global market for oil and gas well firefighting and blowout control services,
which market is highly volatile due to factors beyond the control of the
Company. While the demand for firefighting and blowout control services
ordinarily follows predictable trends in the oil and gas industry,
extraordinary events such as the Bay Marchand and Piper Alpha disasters can be
expected to occur only every four to six years. Wars, acts of terrorism and
other unpredictable factors may increase the need for oil and gas well
firefighting and blowout control services from time to time. As a result, the
Company can expect to experience large fluctuations in its revenues from oil
and gas well firefighting and blowout control services. While the Company
believes that its acquisitions of Abasco, ITS and Code 3 and anticipated
revenues from the WELLSURESM program and from the Company's consulting,
snubbing, training and industrial and marine firefighting services will help
to provide an expanded and predictable revenue and earnings base in the
future, there can be no assurance that the Company will be successful in
further developing these acquired businesses and added services. Accordingly,
the Company expects that its revenues and operating performance may vary
considerably from year to year for the foreseeable future.

SERVICES PROVIDED BY THE COMPANY

The Company is a global-response oil and gas service company that
specializes in responding to and controlling oil and gas well emergencies,
including blowouts and well fires. In connection with such services, the
Company has the capacity to supply the equipment, expertise and personnel
necessary to contain the oil and hazardous materials spills and discharges
associated with such oil and gas well emergencies, to remediate affected sites
and to restore affected oil and gas wells to production. In addition to
providing emergency response services, the Company provides snubbing and other
non-critical well control services, including pre-event planning, training and
consulting services. The Company also manufactures and markets oil and
hazardous materials spill containment and recovery equipment. The Company
provides environmental remediation services to the chemical manufacturing and
transportation industries, as well as to various state and federal agencies,
and also provides materials and equipment procurement, transportation and
logistics services to the energy industry. The Company's principal services
include:

Well Control. This service line is divided into two distinct levels: (1)
"Critical Event" response is ordinarily reserved for well control projects
where hydrocarbons are escaping from a well bore, regardless of whether a fire
has occurred. (2) "Non-critical Event" response, on the other hand, is
intended for the more common operating problems that do not involve escaping
hydrocarbons.

Critical Events. Critical Events frequently result in explosive fires, the
loss of life, the destruction of drilling and production facilities,
substantial environmental damage and the loss of hundreds of thousands of
dollars per day in production revenue. Since Critical Events ordinarily
arise from equipment failures or human error, it is impossible to
accurately predict the timing or scope of the Company's Critical Event
work. Notwithstanding the foregoing, a Critical Event of catastrophic
proportions could result in significant revenues to the Company in the year
of the incident. The Company's professional firefighting staff has more
than 220 years of aggregate industry experience in responding to Critical
Events, oil well fires and blowouts.

Non-critical Events. Non-critical Events frequently occur in connection
with the drilling of new wells into high pressure reservoirs. In most Non-
critical Events, the blowout preventers and other safety systems on the
drilling rig function according to design and the Company is then called
upon to supervise and assist in the well control effort so that drilling
operations can resume as promptly as safety permits. While Non-critical
Events do not ordinarily have the revenue impact of a Critical Event, they
are much more common and predictable.

Equipment Rentals. This service includes the rental of specialty well
control and firefighting equipment by the Company primarily for use in
conjunction with Critical Events. Such equipment includes, but is not limited
to, firefighting pumps, pipe-racks, Athey wagons, pipe cutters, crimping tools
and deluge safety systems. The Company charges this equipment out on a per
diem basis. Past experience indicates that rentals can be expected to average
approximately 40% of the revenues associated with a Critical Event.

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<PAGE>

Equipment Sales and Service. This service line involves the sale of complete
firefighting equipment packages, together with maintenance, monitoring,
updating of equipment and ongoing consulting services. A typical example of
this service line is the industry supported Emergency Response Center that the
Company has established on the North Slope of Alaska. The establishment of
this Emergency Response Center, completed during the six month period ended
December 31, 1997, included the sale of approximately $485,000 in equipment.
The Company has also entered into a long-term agreement to provide ongoing
consulting services relating to the Emergency Response Center, including
training, contingency planning, safety inspections and emergency response
drills. The Company believes that the follow-on revenue from the North Slope
Emergency Response Center may approximate $100,000 per year.

Snubbing Operations. A snubbing unit is a high pressure workover rig that
permits an operator to repair or change-out damaged casing, production tubing
and down-hole production equipment in a high pressure environment. Using a
series of highly sophisticated blowout prevention devices, a snubbing unit
makes it possible to remove and replace down-hole equipment in a pressurized
well. Since snubbing is a very hazardous process that entails a high risk of
flash fire or explosion, the snubbing segment of the oil and gas services
industry is concentrated in a few operators, such as Halliburton, who have the
experience and knowledge required to safely and efficiently perform such
services.

Industrial and Marine Firefighting. This service is divided into two
distinct elements: pre-event consulting and Critical Event management. The
pre-event services offered in the industrial and marine firefighting business
include complete on-site inspection services, safety audits and pre-event
planning. Based on these pre-event services, the Company can recommend the
equipment, facilities and manpower resources that a client should have
available in order to effectively respond to a fire. The Company can also
consult with the client to ensure that the equipment and services required by
the client will be available when needed. If a Critical Event subsequently
occurs, the Company is ready to respond at a client's facility with
experienced firefighters and auxiliary equipment.

Oil and Chemical Spill Containment and Reclamation Equipment. The Company is
a leader in the design and manufacture of a comprehensive line of rapid
response oil and chemical spill containment and reclamation equipment and
products, including mechanical skimmers, containment booms and boom reels,
dispersant sprayers, dispersal agents, absorbents, response vessels, oil and
chemical spill industrial products, spill response packages, oil and chemical
spill ancillary products and waste oil recovery and reclamation products.

Oil and Chemical Spill Containment and Remediation Services. The Company
provides containment and remediation of oil and chemical spills for the oil
and gas, petrochemical, railroad, transportation and shipping industries, as
well as various state and federal governmental agencies. The Company
specializes in the transfer of high and low pressure liquids and hazardous
materials and industrial fire fighting. The Company also provides in-plant
remedial plan implementation, hazardous waste management, petroleum tank
management, industrial hygiene, environmental and occupational, health and
safety services.

Supply, Transportation and Logistics. ITS is ISO 9002 certified and provides
material and equipment procurement, transportation and logistics services to
the energy industry worldwide.

Consulting; Drilling Engineering. The Company provides through its highly
specialized in-house engineering staff, supplemented if necessary by outside
engineering consultants and the Halliburton Energy Services division,
engineering services for such areas as: (1) planning and design of relief well
drilling (trajectory planning, directional control and equipment
specifications, and on-site supervision of the drilling operations), (2)
planning and design of production facilities which are susceptible to well
capping or other control procedures, and (3) mechanical and computer aided
designs for well control equipment.

Consulting; Inspections. A cornerstone of the Company's strategy of
providing preventive well control services involves on-site inspection
services for drilling and workover rigs, drilling and production platforms,
and field production facilities. These inspection services are offered as a
standard option in Halliburton's field service programs.

28
<PAGE>

Consulting; Training. The Company provides specialized training in well
control procedures for drilling, exploration and production personnel. To date
such training programs have been provided for both U.S. and international
operators. The Company's training services are offered in conjunction with
ongoing educational programs sponsored by Halliburton. The Company believes
the training segment of its business offers considerable potential for growth.

Strategic Event Planning (S.T.E.P.). A key element of the services offered
by the Halliburton Alliance is a strategic and tactical planning process
addressing action steps, resources and equipment necessary for an operator to
control a blowout. This planning process incorporates organizational
structures, action plans, specifications, people and equipment mobilization
plans with engineering details for well firefighting, capping, relief well and
kill operations. It also addresses optimal recovery of well production status,
insurance recovery, public information and relations and safety/environmental
issues. While the S.T.E.P. program includes a standardized package of
services, it is easily modified to suit the particular needs of a specific
client.

Regional Emergency Response Centers. The Company currently has Emergency
Response Centers in Houston, Texas, Duncan, Oklahoma, and Anaco, Venezuela,
and maintains an industry supported Emergency Response Center on the North
Slope of Alaska. The Company plans to deploy at least one Emergency Response
Center per year over the next five years. The equipment for these proposed
Emergency Response Centers will either be purchased by the Company for its own
account or purchased by a consortium of local producers who will then contract
with the Company for maintenance and consulting services. It is believed these
Emergency Response Centers, once established, will place the Halliburton
Alliance in an unique competitive position within the industry and allow the
Alliance to gain market share by reducing the mobilization time and costs
traditionally involved in controlling major blowout events.

WELLSURE(SM) Program. On February 6, 1998, the Company announced the formation
of an alliance with Global Special Risks, Inc., a managing general insurance
agent located in Houston, Texas, and New Orleans, Louisiana. The alliance
offers oil and gas exploration production companies, through retail insurance
brokers, a new program known as "WELLSURE(SM)," which combines traditional well
control and blowout insurance with the Company's post-event response services
and well control preventative services including company-wide and/or well
specific contingency planning, personnel training, safety inspections and
engineering consultation. Insurance provided under WELLSURE(SM) has been
arranged with leading London insurance underwriters. WELLSURE(SM) program
participants will be provided with the full benefit of having the Company as a
safety and prevention partner. In the event of well blowouts, the Company will
serve as the integrated emergency response service provider, as well as
function as lead contractor and project manager for control and restoration of
wells covered under the program.

HALLIBURTON ALLIANCE

In response to ongoing changes in the emergency response segment of the oil
and gas service industry, IWC Services entered into a global strategic
alliance with Halliburton in October 1995. Halliburton is widely recognized as
an industry leader in the pumping, cementing, snubbing, production
enhancement, coiled tubing and related services segment of the oil field
services industry. This alliance, "WELLCALL(SM)", draws on the expertise and
abilities of both companies to offer a total well control solution for oil and
gas producers worldwide. The Halliburton Alliance provides a complete range of
well control services including pre-event troubleshooting and contingency
planning, snubbing, pumping, blowout control, debris removal, firefighting,
relief and directional well planning and other specialized services. The
specific benefits that WELLCALL(SM) provides to an operator include:

. Quick response with a global logistics system supported by an
international communications network that operates around the clock,
seven days a week;

. A full-time team of experienced well control specialists that are
dedicated to safety;

. Specialized equipment design, rental, and sales;

29
<PAGE>

. Contingency planning consultation where WELLCALL(SM) specialists meet with
customers, identify potential problems, and help develop a comprehensive
contingency plan; and

. A single-point contact to activate a coordinated total response to well
control needs.

Operators contracting with WELLCALL(SM) receive a Strategic Event Plan, or
S.T.E.P., a comprehensive contingency plan for well control that is region-
specific, reservoir-specific, site-specific and well-specific. The S.T.E.P.
plan provides the operator with a written, comprehensive and coordinated
action plan that incorporates historical data, pre-planned call outs of
Company and Halliburton personnel, pre-planned call outs of necessary
equipment and logistical support to minimize response time and coordinate the
entire well control effort. Thereafter, in the event of a blowout, WELLCALL(SM)
provides the worldwide engineering and well control equipment capabilities of
Halliburton and the firefighting expertise of the Company through an
integrated contract with the operator.

As a result of the Halliburton Alliance, the Company is directly involved in
Halliburton's well control projects that require firefighting expertise,
Halliburton is a primary service vendor to the Company and the Company has
exclusive rights to use certain firefighting technologies developed by
Halliburton. It is anticipated that most of the Company's Emergency Response
Centers will be established at existing Halliburton facilities and that
maintenance of the Emergency Response Center equipment will be performed by
Halliburton employees. The Halliburton Alliance also gives the Company access
to Halliburton's global communications and currency management systems,
capabilities that could prove useful in connection with the Company's
international operations.

Consistent with the Halliburton Alliance, the Company's focus has evolved to
meet its clients' needs in a global theater of operations. With the increased
emphasis by operators on operating efficiencies and outsourcing many
engineering services, the Company has developed a proactive menu of services
to meet their needs. These services emphasize pre-event planning and training
to minimize the likelihood of a blowout and minimize damages in the event of
an actual blowout. The Company provides comprehensive advance training,
readiness, preparation, inspections and mobilization drills which allow client
companies to pursue every possible preventive measure and to react in the most
cohesive manner possible when an event occurs. The Halliburton Alliance
stresses the importance of safety, environmental protection and cost control,
along with asset protection and liability minimization.

Summary of Alliance Agreement. The agreement between the Company and
Halliburton ("Alliance Agreement") provides a general framework for the
exclusive relationship between the Company and Halliburton for the joint
marketing and delivery of well control services, both on land and offshore,
whether performed domestically or in the international market and whether the
project is generated by Halliburton or the Company.

The Alliance Agreement provides that Halliburton is responsible for:

. primary marketing and business development;

. all required snubbing or hydraulic workover units, together with
pumping, logging, wireline, directional drilling, pressure control
and ancillary equipment, including tubular goods and consumables;

. engineering services and support;

. overall project management and well supervision;

. transportation and other logistical support; and

. governmental and regulatory permits and certifications.

Similarly, the Alliance Agreement provides that the Company is responsible
for:

. expertise and tools necessary for the removal of damaged drilling and
production equipment, oil and gas well firefighting operations and
capping or replacement of damaged well head or pressure control
equipment;

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<PAGE>

. firefighting equipment including fire pumps, manifolds and monitors,
pipe cutting and crimping equipment and blowout preventer or capping
stacks;

. engineering support, including contingency and safety case planning,
hydraulic well modeling and computations;

. technical support to operations;

. field supervision of well control and critical well operations; and

. technical support to marketing, including technical presentations to
customers.

The Alliance Agreement requires Halliburton to refrain from entering the
blowout control and oil and gas well firefighting business during the term
of the agreement. The Alliance Agreement will remain in full force and
effect for an indefinite period of time and may be terminated prior to the
fifth anniversary only for cause or by mutual agreement of the parties.
Cause for termination is limited to (i) a fundamental breach of the
Alliance Agreement, (ii) a change in the business circumstances of either
party, (iii) the failure of the Halliburton Alliance to generate
economically viable business, or (iv) the failure of either party to engage
in good faith dealing.

BUSINESS STRATEGY

Over the next few years, the Company intends to continue to expand its
operations and to build upon its demonstrated strengths while increasing
revenues from its consulting, equipment sales, environmental containment and
remediation services and Non-critical Event activities. Recognizing that the
well control services business is a finite market whose upside potential is
dependent upon the occurrence of blowouts which cannot be reasonably
predicted, the Company's business strategy is to market its pre-event services
on a global basis and expand its range of services to establish a diversified
and expanded revenue base. The Company intends to accomplish its objectives by
promoting the Halliburton Alliance and the WELLSURESM program, continuing to
integrate the businesses of Boots & Coots, Abasco, ITS and Code 3, increasing
the geographical scope of its training and consulting programs, establishing
additional Company-owned Emergency Response Centers at locations outside the
United States and acquiring complementary businesses. Like the Company owned
Emergency Response Centers in Houston, Texas, and Duncan, Oklahoma, the
industry supported Emergency Response Center on the North Slope of Alaska and
the Emergency Response Center in Anaco, Venezuela, the proposed Company-owned
Emergency Response Centers would include the equipment required to respond to
a well blowout or fire. In general, the Company plans to offer a broader range
of services to oil and gas producers worldwide, increasing both the scope of
its target and its market share.

The Company hopes to expand its service capabilities through a combination
of internal growth, additional acquisitions, joint ventures and strategic
alliances. Because of the fragmented nature of the oil field services
industry, the Company believes a number of attractive acquisition
opportunities exist in the pressure control, emergency response and
environmental services segments of the business. The oil and gas services
business in general, and the emergency response and environmental remediation
segments in particular, are characterized by a small number of dominant global
competitors and a significant number of locally oriented businesses, many of
which tend to be viable acquisition targets. The Company believes that the
owners of locally oriented companies may be willing to consider becoming part
of a larger organization.

Management has recently commenced preliminary discussions with a number of
companies engaged in complementary businesses to explore the potential for
mutually beneficial business arrangements. While none of these discussions has
progressed to the point where the Company believes a particular transaction is
probable, management believes that additional acquisitions, joint ventures and
strategic alliances are likely.

RESEARCH AND DEVELOPMENT

The Company is not directly involved in activities that will require the
expenditure of substantial sums on research and development. The Company does,
however, as a result of the Halliburton Alliance, benefit from the

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<PAGE>

ongoing research and development activities of Halliburton to the extent that
new Halliburton technologies are or may be useful in connection with the
Company's business.

COMPETITION

The emergency response segment of the oil and gas services business is a
rapidly evolving field in which developments are expected to continue at a
rapid pace. The principal competitors of the Company in the oil and gas well
firefighting business are Wild Well Control, Inc., and Cudd Pressure Control,
Inc. The Company believes that the Halliburton Alliance, the WELLSURESM
program, and its recent acquisitions of Boots & Coots, Abasco, ITS and Code 3
will strengthen its competitive position in the industry by expanding the
scope of services that the Company offers to its customers. However, the
Company's ability to compete depends upon, among other factors, retaining
experienced personnel, increasing industry awareness of the variety of
services the Company offers, expanding the Company's network of Emergency
Response Centers, and further expanding the breadth of its available services.
Competition from other emergency response companies, some of which may have
greater financial resources than the Company, is intense and is expected to
increase as the industry undergoes additional anticipated change. The
Company's competitors may also succeed in developing new techniques, products
and services that are more effective than any that have been or are being
developed by the Company or that render the Company's techniques, products and
services obsolete or noncompetitive. The Company's competitors may also
succeed in obtaining patent protection or other intellectual property rights
that might hinder the Company's ability to develop, produce or sell
competitive products or the specialized equipment used in its business.

REGULATION

Because of the unique nature of the emergency response business, few
regulations other than those applicable to workplace health and safety
generally apply. Because the Company is not ordinarily called to perform field
services until a significant problem has developed, it is usually entitled to
rely on "emergency response" exclusions to applicable regulations.
Notwithstanding the foregoing, the Company is obligated to exercise prudent
judgment and reasonable care at all times and the failure to do so could
result in liability under any number of health, safety and environmental
regulations. See "Risk Factors--Governmental Regulation."

LEGAL PROCEEDINGS

The Company is not a party to any material pending litigation or similar
proceeding.

INSURANCE

The Company and its subsidiaries presently maintain liability insurance
coverage with aggregate policy limits which are believed to be adequate for
their operations. Nevertheless, certain potential hazards exist, including the
potential for environmental damage, for which insurance coverage is either
prohibitively expensive or unavailable. In the event the Company is subjected
to claims for uninsured losses or liabilities, the Company's funds may be
reduced and its properties may be lost. A substantial uninsured loss would
have a material adverse effect on the Company and its financial position. See
"Risk Factors--Operating Hazards; Liability Insurance Coverage; Litigation."

EMPLOYEES

As of the date of this Prospectus, the Company and its operating
subsidiaries collectively have 183 full-time employees. In addition, the
Company has several part-time consultants and also employs part-time contract
personnel who remain on-call for certain emergency response projects. The
Company is not subject to any collective bargaining agreements and it
considers its relations with its employees to be good. See "Risk Factors--
Reliance Upon Officers, Directors and Key Employees."

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<PAGE>

FACILITIES

The Company leases a 7,000 square foot office in the Halliburton Center,
Houston, Texas. This space is rented from an unaffiliated landlord through May
2002 for an average monthly rental of $7,000. The Company leases an 11,000
square foot Emergency Response Center facility in Anaco, Venezuela, which
space is rented through January 2000 for a monthly rental of $4,000. The
Company owns a facility in northwest Houston, Texas, that includes
approximately 2 acres of land, a 4,000 square foot office building and a
12,000 square foot manufacturing and warehouse building. The Company leases
approximately 10,000 square feet of office space in the Camac Plaza, Houston,
Texas, through June 30, 1999, for an average monthly rental of $9,000.
Additionally, the Company has leased office and equipment storage facilities
in various other cities within the United States, Venezuela, the United
Kingdom and Peru. The future commitments on these additional leases are
immaterial. The Company believes that these facilities will be adequate for
its anticipated needs.

EQUIPMENT

The Company is well-equipped for its current operations. In the fields of
blowout control and firefighting specifically, the Company owns five complete
sets of oil-well firefighting equipment, including Athey wagons, pumps, water
lines, monitors and nozzles. These equipment sets are presently located at
Company-owned Emergency Response Centers in Houston, Texas, Duncan, Oklahoma
and Anaco, Venezuela. In addition, the Company has the in-house capacity to
assemble additional firefighting and pump equipment packages as needed.

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<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table lists the name and age of each director and executive
officer of the Company, as well as those persons expected to make a
significant contribution to the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Larry H. Ramming.................. 51 Chairman of the Board of Directors, Chief
Executive Officer
Brian Krause...................... 42 Director, President
Thomas L. Easley.................. 52 Director, Vice President, Chief Financial
Officer, Secretary
K. Kirk Krist..................... 39 Director
Doug Johnson...................... 45 Director
Jerry Winchester.................. 38 Director
</TABLE>

Other key officers, technical and operating personnel of the Company and its
principal subsidiaries and their ages are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Well Control Business Unit
Raymond Henry.................. 53 Director of Well Control Operations
Richard Hatteberg.............. 58 Senior Vice President, Well Control
Danny Clayton.................. 49 Senior Vice President, President of Boots &
Coots/IWC de Venezuela, S.A.
Mike Foreman................... 35 Senior Well Control Specialist
Juan Moran..................... 38 Senior Well Control Specialist
James Tuppen................... 41 Senior Vice President, Well Control
Larry Flak..................... 41 Vice President, Engineering Services
Operating Subsidiaries
Charles R. Hipp................ 60 President, ITS Supply Corporation
C.E. La Bounty................. 40 President, Abasco, Inc.
Lee Thompson................... 31 President, Code 3, Inc.
</TABLE>

BACKGROUND OF DIRECTORS AND OFFICERS

Larry H. Ramming has served as the Chairman of the Board and Chief Executive
Officer of the Company since the acquisition of IWC Services by the Company on
July 29, 1997. At the Company's annual meeting of stockholders on December 8,
1997, Mr. Ramming was elected to serve as a Class I Director for a one-year
term that will expire on the date of the 1998 annual meeting of stockholders.
Mr. Ramming also serves on the Audit Committee. In addition to his positions
with the Company, Mr. Ramming has been actively involved in mortgage banking
and the packaging and resale of mortgage notes, consumer loans and other debt
instruments for over 15 years. In addition to his involvement in financial
instrument trading, Mr. Ramming is an active venture capital investor and
entrepreneur with substantial holdings in a number of public and private
corporations.

Brian Krause has served as the President and as a Director of the Company
since the acquisition of IWC Services by the Company on July 29, 1997. At the
Company's annual meeting of stockholders on December 8, 1997, Mr. Krause was
elected to serve as a Class III Director for a three year term that will
expire on the date of the annual meeting of stockholders in calendar year
2000. Mr. Krause brings over 19 years of well control and firefighting
experience to the Company. Before joining the group that founded IWC Services,
Mr. Krause was employed for 18 years by the Red Adair Company, Houston, Texas.
Mr. Krause joined the Red Adair Company

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<PAGE>

as a Well Control Specialist in August 1978, was promoted to Vice President in
June 1989 and was again promoted to Vice President & Senior Well Control
Specialist in February 1994. During his tenure with the Red Adair Company, Mr.
Krause participated in hundreds of well control events worldwide. Mr. Krause,
along with Messrs. Henry, Hatteberg and Clayton, resigned from the Red Adair
Company in August 1994 and began the independent business activities that led
to the formation of IWC Services in May 1995.

Thomas L. Easley has served, pursuant to a consulting arrangement with the
Company, as Chief Financial Officer of the Company since the acquisition of
IWC Services by the Company on July 29, 1997, as Vice-President since February
28, 1998, and as a director since March 25, 1998. Mr. Easley was elected to
serve as a Class I Director for a term that will expire on the date of the
1998 annual meeting of stockholders. From May 1995 through July 1996, Mr.
Easley served as Vice President and Chief Financial Officer of DI Industries,
Inc. a publicly held oil and gas drilling contractor with operations in the
U.S., Mexico, Central America and South America. Previously, from June 1992
through May 1995, he served as Vice President-Finance of Huthnance
International, Inc., a closely held offshore oil and gas drilling contractor.
Mr. Easley is a graduate of Tarleton State University (BS 1967) and Texas A&M
University (MBA 1968). Mr. Easley is also a certified public accountant.

K. Kirk Krist has served as a member of the Company's Board of Directors
since the acquisition of IWC Services by the Company on July 29, 1997. At the
Company's annual meeting of stockholders on December 8, 1997, Mr. Krist was
elected to serve as a Class III Director for a three year term that will
expire on the date of the annual meeting of stockholders in calendar year
2000. Mr. Krist also serves on the Audit and Compensation Committees. Mr.
Krist has been a self employed oil and gas investor and venture capitalist
since 1982. Mr. Krist is a graduate of the University of Texas (BBA 1982)

Doug Johnson was elected to the Board of Directors at the annual meeting of
stockholders on December 8, 1998, to serve as a Class II Director for a two-
year term that will expire on the date of the 1999 annual meeting of
stockholders. Mr. Johnson also serves on the Audit Committee. He has not
previously held a position or office with the Company. Mr. Johnson presently
serves as president of Johnson Broadcasting, Inc., a privately held company
that owns KNWS-TV51 in Houston, Texas and KLDT-TV55 in Dallas, Texas.
Previously, Mr. Johnson served as Vice President of DJ Broadcasting, Inc. a
family owned corporation that operated WXON-TV20 in Detroit, Michigan. Mr.
Johnson attended the University of Michigan.

Jerry Winchester was elected to the Board of Directors at the annual meeting
of stockholders on December 8, 1998, to serve as a Class II Director for a
two-year term that will expire on the date of the 1999 annual meeting of the
stockholders. Mr. Winchester also serves on the Compensation Committee. He has
not previously held a position or office with the Company. Mr. Winchester
presently serves as product manager for Well Control, Coiled Tubing and
Special Services of Halliburton Energy Services, a position he has held since
1993. Before assuming this position, Mr. Winchester was employed by
Halliburton Energy Services for 10 years in other positions of increasing
responsibility. Mr. Winchester is a graduate of Oklahoma State University.

BIOGRAPHIES OF KEY PERSONNEL

Raymond Henry has served as the Director of Well Control Operations of the
Company since the acquisition of IWC Services by the Company on July 29, 1997.
Mr. Henry brings over 34 years of well control and firefighting experience to
the Company. Before joining the group that founded IWC Services, Mr. Henry was
employed for 32 years by the Red Adair Company, Houston, Texas. Mr. Henry
joined the Red Adair Company as a Well Control Specialist in June 1962 and was
promoted to Senior Vice President in June 1979. During his tenure with the Red
Adair Company, Mr. Henry participated in hundreds of well control events
worldwide. Mr. Henry, along with the Messrs. Krause, Hatteberg and Clayton,
resigned from the Red Adair Company in August 1994 and began the independent
business activities that led to the formation of IWC Services in May 1995.

Richard Hatteberg has served as Senior Vice President of the Company since
the acquisition of IWC Services by the Company on July 29, 1997. Mr. Hatteberg
brings over 31 years of well control and firefighting

35
<PAGE>

experience to the Company. Before joining the group that founded the Company,
Mr. Hatteberg was employed for 29 years by the Red Adair Company, Houston,
Texas. Mr. Hatteberg joined the Red Adair Company as a Senior Well Control
Specialist in June 1965 and was promoted to Senior Vice President & Senior
Well Control Specialist in February 1994. During his tenure with the Red Adair
Company, Mr. Hatteberg participated in hundreds of well control events
worldwide. Mr. Hatteberg, along with Messrs. Krause, Henry and Clayton,
resigned from the Red Adair Company in August 1994 and began the independent
business activities that led to the formation of IWC Services in May 1995.

Danny Clayton has served as a Senior Vice President of the Company since the
acquisition of IWC Services by the Company on July 29, 1997 and as President
of Boots & Coots Inc. de Venezuela S.A. Mr. Clayton brings over 18 years of
well control and firefighting experience to the Company. Before joining the
group that founded the Company, Mr. Clayton was employed for 18 years by the
Red Adair Company, Houston, Texas. Mr. Clayton joined the Red Adair Company as
a Well Control Specialist in June 1979, was promoted to Vice President in
January 1989 and was again promoted to Vice President & Senior Well Control
Specialist in February 1994. During his tenure with the Red Adair Company, Mr.
Clayton participated in hundreds of well control events worldwide. Mr.
Clayton, along with Messrs. Henry, Krause and Hatteberg, resigned from the Red
Adair Company in August 1994 and began the independent business activities
that led to the formation of IWC Services in May 1995.

Mike Foreman has served as a Senior Well Control Specialist of the Company
since the acquisition of IWC Services by the Company on July 29, 1997. Mr.
Foreman brings over 11 years of well control and firefighting experience to
the Company. Before joining the Company, Mr. Foreman was employed for nine
years by the Red Adair Company, Houston, Texas, as a Well Control Specialist.
During his tenure with the Red Adair Company, Mr. Foreman participated in a
large number of well control events worldwide, including offshore blowouts in
Nigeria and Venezuela, onshore blowouts in North and South America, and the
Piper Alpha platform disaster. Mr. Foreman resigned from the Red Adair Company
in August 1994 in order to work with Messrs. Henry, Krause, Hatteberg and
Clayton in their new venture.

Juan Moran has served as a Senior Well Control Specialist of the Company
since the acquisition of IWC Services by the Company on July 29, 1997. Mr.
Moran brings over eight years of well control and firefighting experience to
the Company. Before joining IWC Services, Mr. Moran was employed for six years
by the Red Adair Company, Houston, Texas, as a Well Control Specialist. During
his tenure with the Red Adair Company, Mr. Moran participated in a large
number of well control events worldwide, including offshore blowouts in
Nigeria and Venezuela, onshore blowouts in North and South America, and the
Piper Alpha platform disaster. Mr. Moran resigned from the Red Adair Company
in August 1994 in order to work with Messrs. Henry, Krause, Hatteberg and
Clayton in their new venture.

James Tuppen was partner of Boots & Coots prior to joining the Company, and
is a 20 year well control veteran serving as a lead fire control specialist on
both offshore and onshore blowouts. Mr. Tuppen has controlled blowouts and
fires in North America, South America, Northern Africa, Australia and the
Middle East and recently served as co-manager of the Pedernales Old Well
Abandonment Project in the jungles of Venezuela's lower Orinoco River Delta.

Larry F1ak is a registered professional engineer who trained under W.C.
Goins, the father of modem well control, and has devoted more than 20 years to
drilling engineering and well control supervision. During his career, Mr. Flak
has participated in the control of numerous blowouts and has formulated and
implemented kill procedures and relief well plans in field locations
worldwide. Before joining the Company, Mr. Flak served as a consultant to
Boots & Coots and others, including as a special technical consultant to the
U.S. Armed Forces during his service with the Kuwait Oil Company, and he
managed the daily firefighting operations in Kuwait following the Gulf War. In
this capacity, Mr. Flak was personally responsible for the development,
implementation and logistical support for the control of nearly 700 burning
wells that were set ablaze by retreating Iraqi troops.

36
<PAGE>

Charles R. Hipp has served as president of ITS Supply Corporation since its
acquisition by the Company in January 1998. From 1972 through 1997 Mr. Hipp
served in various management positions, including President, of International
Tool & Supply, the predecessor operating company of ITS Supply Corporation.
Mr. Hipp has a BS in Business Administration from Texas A&M University (1959).

C.E. "Chuck" La Bounty has served as President of Abasco, Inc., since its
acquisition by the Company in September 1997. From 1991 through 1997 Mr. La
Bounty served in various management positions, including President, of the
predecessor operating company of Abasco, Inc, Mr. La Bounty has a BS in
Education from Stephen F. Austin University.

Lee Thompson has served as President of Code 3, Inc. since its acquisition
by the Company in February 1998. From 1993 through such date, Mr. Thompson
served as President and was a founding shareholder of Code 3, Inc. Prior to
1993, Mr. Thompson was employed as an engineer for Halliburton Services and as
a municipal firefighter. Mr. Thompson has a BS in Engineering Science from the
University of Oklahoma.

EXECUTIVE COMPENSATION

Boots & Coots International Well Control, Inc. is a holding company, all of
the business activities of which are conducted by its subsidiaries.

The Summary Compensation Table below sets forth individual compensation
information for the Chief Executive Officer and any other officer or director
who received cash compensation in excess of $ 100,000 for the twelve month
period ended December 31, 1997 and the six month transition period from July
1, 1997 to December 31, 1997. Long-term compensation awards reflect awards
made by the Company, while the calendar year annual compensation disclosures
reflect amounts paid by the Company and IWC Services, Inc., prior to its
acquisition by the Company on July 29, 1997.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
--------------- ------------
NAME AND PRINCIPAL RESTRICTED ALL OTHER
POSITION PERIOD SALARY BONUS STOCK AWARDS COMPENSATION
------------------ --------------- -------- ------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Larry H. Ramming........ 1997 $ 99,000 $3,000 -- --
Chairman of the Board/ 7/1/97-12/31/97 60,000 3,000 -- --
Chief Executive Officer
Thomas L. Easley........ 1997 $134,000 -- $532,000(1) --
Chief Financial Officer 7/1/97-12/31/97 $ 93,000 -- $532,000(1) --
</TABLE>
- --------
(1) An aggregate of 90,540 shares of restricted Common Stock were granted to
Mr. Easley by the Company during the six month transition period from July
1, 1997 to December 31, 1997. The aggregate value thereof on December 31,
1997, determined by multiplying the number of shares granted by the
closing sales price on such date, was $339,525. The value set forth above
and in the table has been calculated in accordance with the rules of the
Securities and Exchange Commission, which in the opinion of the Company
overstates the value thereof; the Company estimates that fair market value
on the date of grant was substantially less than the calculation from the
formula set forth above due, in part, to the restricted nature of the
grant, volatility in the public market for the Company's stock due to
limited trading volumes, and the price at which the Company had recently
offered restricted shares of Common Stock in a private placement ($1.00
per share).

RECENT COMPENSATION DEVELOPMENTS

37
<PAGE>

of his compensation arrangements a Restricted Stock Award under the Company's
1997 Executive Compensation Plan of 300,000 shares of Common Stock which will
vest at a rate of 25,000 shares per quarter commencing on June 30, 1998.
Further and in recognition of the efforts of Messrs. Ramming, Easley and
Krause in the recent successful acquisitions accomplished by the Company, the
Board authorized Restricted Stock Awards under the Company's 1997 Executive
Compensation Plan to such persons in the amounts of 300,000, 200,000 and
100,000 shares, respectively, which shall vest at a rate of 10% per annum
commencing December 31, 1999. In addition and in connection with such stock
awards, the Board authorized the payment to such persons of annual cash
bonuses in such amounts as will cover all federal income tax liability related
to such awards, including with respect to the cash bonus amount. Finally, on
May 18, 1998, the Board granted to Mr. Easley a contractual option to purchase
200,000 shares of Common Stock over a five year period at an exercise price of
$4.00 per share. The closing sales price of the Common Stock on AMEX on May
18, 1998, was $6.437. Accordingly, significant compensation costs will result
from these grants over the respective vesting periods of the grants based on
the trading prices at the grant dates.

EMPLOYMENT ARRANGEMENTS

Mr. Ramming, the Company's Chairman and Chief Executive Officer, is actively
involved in a number of independent business activities and does not devote
his full time to the affairs of the Company. Accordingly, Mr. Ramming may face
certain conflicts of interest in allocating his time between the Company and
his other business activities. Mr. Ramming has executed a one year employment
agreement with the Company which allows for his outside activities provided
that he devotes such time to the Company's affairs as is reasonably necessary
for the performance of his duties, such activities are not competitive with
the Company's business and such activities do not materially adversely affect
his performance as an officer and director of the Company. Mr. Ramming's
employment agreement, which was effective as of August 1, 1997, provided for
an annual salary of $125,000 and an annual automobile allowance of $12,000.
Mr. Ramming has agreed prospectively to curtail all material outside business
activities in connection with the current negotiation of a multiple year
employment contract with the Company. See "Recent Compensation Developments."

Mr. Easley served as Chief Financial Officer of the Company during 1997 and
performed certain other services, including sourcing and conducting due
diligence on certain acquisition prospects and raising debt and equity
capital, pursuant to a consulting arrangement with the Company. The Company is
currently negotiating an employment arrangement with Mr. Easley. See "Recent
Compensation Developments."

COMPENSATION OF DIRECTORS

1997 Outside Directors' Option Plan. On November 12, 1997, the Board of
Directors of the Company adopted the 1997 Outside Directors' Option Plan (the
"Directors' Plan") and the Company's stockholders approved such plan on
December 8, 1997. The Directors' Plan provides for the issuance each year of
an option to purchase 15,000 shares of Common Stock to each member of the
Board of Directors who is not an employee of the Company. The purpose of the
Directors' Plan is to encourage the continued service of outside directors and
to provide them with additional incentive to assist the Company in achieving
its growth objectives. Options may be exercised over a five-year period with
the initial right to exercise starting one year from the date of the grant,
provided the director has not resigned or been removed for cause by the Board
of Directors prior to such date. After one year from the date of the grant,
options outstanding under the Directors' Plan may be exercised regardless of
whether the individual continues to serve as a director. Options granted under
the Directors' Plan are not transferable except by will or by operation of
law. As of the date hereof options to purchase 45,000 shares of Common Stock
have been granted under the Directors' Plan at an exercise price of $4.375 per
share.

Other Compensation. In addition to stock option issuances under the
Directors' Plan, Directors who are not employees of the Company receive $250
for their attendance at each Board of Directors and committee meeting and are
reimbursed for their travel, lodging and food expenses incurred in connection
with attending such meetings.

38
<PAGE>

EMPLOYEE AND CONSULTANT STOCK OPTIONS AND STOCK GRANTS

1996 Incentive Stock Plan. In November 1996, IWC Services adopted its 1996
Incentive Stock Plan (the "Incentive Stock Plan") which was subsequently
approved by IWC Services' stockholders. The Incentive Stock Plan authorized
the Board of Directors to provide a number of key employees with incentive
compensation commensurate with their positions and responsibilities. The
Incentive Stock Plan permits the grant of incentive equity awards covering up
to 960,000 shares of Common Stock. In connection with the acquisition of IWC
Services by the Company, the Company issued incentive stock options covering
an aggregate of 460,000 shares of Common Stock to persons who were the
beneficial owners of 200,000 options that were previously granted by IWC
Services. These incentive stock options were exercisable by the holders
thereof for a period of 10 years from the original date of grant at an
exercise price of $0.43 per share. As of the date hereof 382,480 of such
options have been exercised.

Boots & Coots Employee Options. In June 1997, IWC Services issued options to
purchase a total of 100,000 shares of its common stock at a price of $1.00 per
share to nine employees of Boots & Coots. In connection with the acquisition
of IWC Services by the Company, the Company issued incentive stock options
covering an aggregate of 230,000 shares of Common Stock to the Boots & Coots
employees who were the beneficial owners of the 100,000 options that were
previously granted by IWC Services. These stock options will vest at the rate
of 20% per year commencing in July 1998 and be exercisable by the holders
thereof for a period of 10 years from the original date of grant at an
exercise price of $0.43 per share.

1997 Incentive Stock Plan. In December 1997, the Company adopted its 1997
Incentive Stock Plan (the "1997 Incentive Stock Plan"), the form of which was
approved by the stockholders of the Company in December 1997. The 1997
Incentive Stock Plan authorizes the Board of Directors to provide key
employees with incentive compensation commensurate with their positions and
responsibilities. The 1997 Incentive Stock Plan permits the grant of incentive
equity awards covering up to 1,475,000 shares of Common Stock. Grants may be
in the form of qualified or nonqualified stock options, restricted stock,
phantom stock, stock bonuses and cash bonuses. As of the date hereof,
restricted stock grants of 475,000 shares of Common Stock have been made under
the 1997 Incentive Stock Plan. Such grants vest ratably over a five year
period from the date of grant.

1997 Executive Compensation Plan. In December 1997, the Company proposed its
1997 Executive Compensation Plan (the "1997 Executive Compensation Plan"), the
form of which was approved by the stockholders of the Company in December
1997. The 1997 Executive Compensation Plan authorizes the Board of Directors
to provide executive officers with incentive compensation commensurate with
their positions and responsibilities. The 1997 Executive Compensation Plan
permits the grant of incentive equity awards covering up to 1,475,000 shares
of Common Stock. Grants may be in the form of qualified or nonqualified stock
options, restricted stock, phantom stock, stock bonuses and cash bonuses. As
of the date hereof, restricted stock grants of 700,000 shares of Common Stock
have been made under the 1997 Executive Compensation Plan.

Contractual Stock Options.

During the period from July 29, 1997 through the date hereof, contractual
stock options for 1,995,000 shares of Common Stock, in the aggregate, have
been granted to certain employees and consultants. Such options are
exercisable ratably over a five year period at prices ranging from $2.00 to
$4.42 per share. Certain of such options include the right to relinquish the
vested portion of the option at fair market value in exchange for the exercise
price of the balance of the option shares.

Contractual Stock Grants.

During the period from July 29, 1997 through the date hereof, contractual
restricted stock grants for 650,000 shares of Common Stock, in the aggregate,
have been made to certain employees and consultants. Such grants vest ratably
over a five year period.

39
<PAGE>

INDEMNIFICATION

The Company's Amended and Restated Certificate of Incorporation and By-laws
are intended to take full advantage of the enabling provisions of the General
Corporation Law of the State of Delaware ("GCLD") with respect to limiting the
personal liability of its officers, directors, employees and agents. The
Amended and Restated Certificate of Incorporation and By-laws provide that the
Company may indemnify current and former directors, officers, employees and
agents, and persons serving in similar capacities in the subsidiaries or other
entities in which the Company has an interest to the fullest extent permitted
by the GCLD. Thus, the Company may be prevented from recovering damages for
certain alleged errors or omissions by the officers and directors of the
Company. Under the Company's By-laws, indemnification payments may only be
made upon a determination that the indemnified person acted in good faith and
in a manner such person reasonably believed to be in, or not opposed to, the
best interests of the Company and, with respect to a criminal proceeding, had
no reasonable cause to believe such conduct was unlawful. Such determination
shall be made (i) by a majority of the disinterested members of the Board of
Directors, (ii) by independent legal counsel in a written opinion, or (iii) by
the stockholders.

DISCLOSURE OF THE COMMISSION'S POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions of the Company's Amended and
Restated Certificate of Incorporation, the GCLD, and/or the provisions of the
indemnification agreements executed between each director and executive
officer, and the Company, the Company has been informed that, in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Securities Act and is therefore
unenforceable.

ANTI-TAKEOVER PROVISIONS

The provisions of the Company's Amended and Restated Certificate of
Incorporation and By-laws summarized in the following paragraphs may be deemed
to have an anti-takeover effect and may delay, defer, or prevent a tender
offer or takeover attempt that a shareholder might consider to be in that
shareholder's best interests, including attempts that might result in a
premium over the market price for the shares held by shareholders. In
addition, certain provisions of Delaware law and the Company's 1996 and 1997
Incentive Stock Plans and 1997 Executive Compensation Plan may be deemed to
have a similar effect.

Amended and Restated Certificate of Incorporation and By-laws. The Board of
Directors of the Company is divided into three classes. The term of office of
Class I directors is one year, of Class II directors is two years and of Class
III directors is three years. The term of each class of directors expires at
each annual meeting of shareholders held during the year of the one, two or
three year anniversary of their election for Class I, Class II and Class III
directors, respectively, when their successors are elected and qualified.
Shareholders may remove a director only for cause. In general, the Board of
Directors, not the Company's shareholders, has the right to appoint persons to
fill vacancies on the Board of Directors.

Pursuant to the Company's Amended and Restated Certificate of Incorporation,
the Company's Board of Directors, by resolution, may establish one or more
classes or series of preferred shares having the number of shares,
designation, relative voting rights, dividend rates, liquidation and other
rights, preferences, and limitations that the Board of Directors fixes without
any shareholder approval. Any rights, preferences, privileges, and limitations
that are established could have the effect of impeding or discouraging the
acquisition of control of the Company.

The Company's Amended and Restated Certificate of Incorporation further
provides special meetings of shareholders may be called only by the Board of
Directors, or by the Board of Directors at the written request of the holders
of at least fifty percent of all shares entitled to vote at the proposed
special meeting.

The Company's Amended and Restated Certificate of Incorporation also
provides that the only business (including election of directors) that may be
considered at an annual or special meeting of shareholders, in addition to
business proposed (or persons nominated to be directors) by the directors of
the Company, is business proposed (or persons nominated to be directors) by
shareholders who comply with the notice and disclosure

40
<PAGE>

requirements of the Amended and Restated Certificate of Incorporation. In
general, the Amended and Restated Certificate of Incorporation requires that a
shareholder give the Company notice of proposed business or nominations no
later than sixty days before the annual meeting of shareholders (meaning the
date on which the meeting is first scheduled and not postponements or
adjournments thereof) or (if later) ten days after the first public notice of
the annual meeting is sent to shareholders. In general, the notice must also
contain certain information about the shareholder proposing the business or
nomination, his interest in the business, and (with respect to nominations for
director) information about the nominee of the nature ordinarily required to
be disclosed in public proxy solicitations.

The Amended and Restated Certificate of Incorporation provides that approval
by the holders of at least two-thirds of the outstanding voting shares is
required to amend the provisions of the By-Laws.

Delaware Anti-takeover Statute. The Company is a Delaware corporation and is
subject to Section 203 of the GCLD. In general, Section 203 prevents an
"interested shareholder" (defined generally as a person owning 15% or more of
the Company's outstanding voting shares) from engaging in a "business
combination" (as defined in Section 203) with the Company for three years
following the date that person became an interested shareholder unless (a)
before that person became an interested shareholder, the Board of Directors of
the Company approved the transaction in which the interested shareholder
became an interested shareholder or approved the business combination, (b)
upon consummation of the transaction that resulted in the interested
shareholder's becoming an interested shareholder, the interested shareholder
owns at least 85% of the voting shares of the Company outstanding at the time
the transaction commenced (excluding shares held by directors who are also
officers of the Company and by employee stock plans that do not provide
employees with the right to determine confidentially whether shares held
subject to the plan will be tendered in a tender or exchange offer), or (c)
following the transaction in which that person became an interested
shareholder, the business combination is approved by the Board of Directors of
the Company and authorized at a meeting of shareholders by the affirmative
vote of the holders of at least two-thirds of the outstanding voting shares of
the Company not owned by the interested shareholder.

Under Section 203, these restrictions also do not apply to certain business
combinations proposed by an interested shareholder following the announcement
or notification of one of certain extraordinary transactions involving the
Company and a person who was not an interested shareholder during the previous
three years or who became an interested shareholder with the approval of a
majority of the Company's directors, if that extraordinary transaction is
approved or not opposed by a majority of the directors who were directors
before any person became an interested shareholder in the previous three years
or who were recommended for election or elected to succeed such directors by a
majority of such directors then in office.

Debt. Certain provisions in the Senior Note Purchase Agreement may also
impede a change in control, in that they provide that the loans become due if
there is a change in the management of the Company or a merger with another
company.

1996 and 1997 Incentive Stock Plans and 1997 Executive Compensation Plan.
The Company's 1996 and 1997 Incentive Stock Plans and 1997 Executive
Compensation Plan provide for accelerated vesting of restricted stock grants
and stock options and awards if there is a "change of control" of the Company,
defined as (1) a "change in control" of the Company, as that term is
contemplated in the federal securities laws; or (2) the occurrence of any of
the following events: (A) any Person becomes, after the effective date of such
plan, the "beneficial owner" (as defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's then
outstanding securities; provided, that the acquisition of additional voting
securities, after the effective date of such plan, by any Person who is, as of
the effective date of such plan, the beneficial owner, directly or indirectly,
of 20% or more of the combined voting power of the Company's then outstanding
securities, shall not constitute a "Change in Control" of the Company, (B) a
majority of individuals who are nominated by the Board of Directors for
election to the Board of Directors on any date, fail to be elected to the
Board of Directors as a direct or indirect result of any proxy fight or
contested election for positions of the Board of Directors.

41
<PAGE>

PRINCIPAL SHAREHOLDERS

The following table sets forth, as of March 23, 1998, information regarding
the beneficial ownership of Common Stock of the Company owned by (i) each
person (or "group" within the meaning of Section 13(d)(3) of the Security
Exchange Act of 1934) known by the Company to own beneficially more than 5% of
the Common Stock; (ii) each director of the Company, (iii) each of the named
executive officers and (iv) all executive officers and directors of the
Company as a group.

<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER (1) OWNERSHIP OF CLASS
- ---------------------------------------- ---------- --------
<S> <C> <C>
*Larry H. Ramming (2)................................... 9,115,400(3) 29.9%
*Raymond Henry (2)...................................... 4,791,200(4) 15.7%
Mark S. Howells (5)..................................... 1,765,988 5.8%
2390 E. Camelback Road
Phoenix, Arizona 85016
Jeffrey J. Puglisi (5).................................. 1,566,615 5.1%
2390 E. Camelback Road
Phoenix, Arizona 85016
*Brian Krause (2)....................................... 1,366,200 4.4%
*Doug Johnson........................................... 1,015,333 3.3%
*Jerry Winchester....................................... -0- -0-
*K. Kirk Krist.......................................... 570,700 1.9%
*Thomas L. Easley....................................... 217,040 0.7%
---------- -----
*All executive officers and directors as a group (seven
persons)............................................... 10,943,473 35.79%
</TABLE>
- --------
(1) Unless otherwise noted, the business address for purposes hereof for each
person listed is 5151 San Felipe Suite 450, Houston, Texas 77056.
Beneficial owners have sole voting and investment power with respect to
the shares unless otherwise noted.
(2) In May 1995, Messrs. Krause, Henry, Hatteberg and Clayton entered into the
Voting Trust Agreement which gives Messrs. Ramming and Henry, as co-
trustees, the right to vote all the shares of the Company's Common Stock
now owned or hereafter acquired by Messrs. Krause, Henry, Hatteberg and
Clayton during the five-year period ending December 31, 2000; provided
that twenty percent of such securities may be released therefrom each year
upon the written request of such party. Currently sixty percent of such
shares are subject to, but have not yet been, released. In the event that
Messrs. Ramming and Henry are unable to reach an agreement respecting the
voting of such shares, the Voting Trust Agreement designates Charles T.
Phillips, attorney at law, as the tiebreaker.
(3) Includes 4,324,200 shares owned by Mr. Ramming and members of his
immediate family, including certain family owned entities. Also includes
4,791,200 shares owned by Messrs. Krause, Henry, Hatteberg and Clayton,
all of which are subject to the Voting Trust Agreement under which Messrs.
Ramming and Henry serve as co-trustees.
(4) Includes 1,150,000 shares owned by Mr. Henry and 3,641,200 owned by
Messrs. Krause, Hatteberg and Clayton, all of which are subject to the
Voting Trust Agreement under which Messrs. Ramming and Henry serve as co-
trustees.
(5) Does not include a warrant to purchase 696,500 shares of common stock held
by Arizona Securities Group, Inc., of which Messrs. Howells and Puglisi
are principals.

42
<PAGE>

SELLING SECURITY HOLDERS

An aggregate of 19,196,584 shares (the "Shares") of Common Stock, including
3,833,541 shares underlying warrants to purchase Common Stock, are being
registered in this Offering for the account of the Selling Security Holders
listed on Schedule A to this Prospectus. The Selling Security Holders' Shares
are not being underwritten in this Offering and the Company will not receive
any proceeds from the sale of the Selling Security Holders' Shares. The Shares
of Common Stock being registered for the account of the Selling Security
Holders may be sold by the Selling Security Holders or their transferees
commencing on the date of this Prospectus. Sales of such Shares of Common
Stock by the Selling Security Holders or their transferees may depress the
price of the Common Stock on AMEX and in any market that may develop for such
Shares. The Company will not receive any of the proceeds from the sale of such
Shares of Common Stock. See "Plan of Distribution."

43
<PAGE>

PLAN OF DISTRIBUTION

The sale of the Selling Security Holders' Shares may be effected from time
to time in transactions (which may include block transactions by or for the
account of the Selling Security Holders) on the AMEX or in negotiated
transactions, through the writing of options on the Selling Security Holders'
Shares, through a combination of such methods of sale, or otherwise. Sales may
be made at fixed prices which may be changed, at market prices prevailing at
the time of sale, or at negotiated prices.

The Company is not aware of any agreements, undertakings or arrangements
with any underwriters or broker-dealers regarding the sale of Selling Security
Holders' Shares. The Selling Security Holders may effect transactions in the
Shares by selling their securities directly to purchasers or to broker-dealers
who may purchase the Selling Security Holders' Shares as principals and
thereafter sell such Shares from time to time on AMEX, in negotiated
transactions, or otherwise. Such broker-dealers, if any, may receive
compensation in the form of discounts, concessions or commissions from the
Selling Security Holders and/or the purchasers for whom such broker-dealers
may act as agents or to whom they may sell as principals, or both.

The Selling Security Holders and broker-dealers, if any, acting in
connection with such sales, might be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act and any commission received by
them and any profit on the resale of such securities might be deemed to be
underwriting discounts and commissions under the Securities Act. Furthermore,
in the event of a "distribution" of his or her Shares, such Selling Security
Holders, any selling broker or dealer and any "affiliated purchasers" may be
subject to Rule 10b-6 under the Exchange Act until his or her participation in
the distribution is completed. In addition, Rule 10b-7 under the Exchange Act
prohibits any "stabilizing bid" or "stabilizing purchase" for the purpose of
pegging, fixing, or stabilizing the price of Common Stock in connection with
the offering.

There is no assurance that the Selling Security Holders will be able to sell
all or any of the Shares offered hereby.

The Company has notified the Selling Security Holders of the prospectus
delivery requirements for sales made pursuant to this Prospectus and that, if
there are material changes to the stated plan of distribution, a post-
effective amendment with current information would need to be filed before
offers are made and no sales could occur until such amendment is declared
effective.

44
<PAGE>

CERTAIN TRANSACTIONS

TRANSACTIONS WITH BUCKINGHAM CAPITAL CORPORATION

The Company had a services agreement with Buckingham Capital Corporation,
which is beneficially owned by the minor child of the Company's Chief
Executive Officer, Larry H. Ramming, which was terminated on December 31,
1997. Pursuant to such agreement, the Company paid fees to Buckingham Capital
Corporation for certain office support equipment and administrative personnel,
which fees were not materially different from the costs incurred by Buckingham
Capital Corporation. Management believes such charges were comparable to what
the Company would have paid to third parties for such equipment and personnel.
For the period from May 4, 1995 (inception) through June 30, 1995, the years
ended June 30, 1996 and June 30, 1997, and the six month period ended December
31, 1997, the Company paid $0, $215,000, $236,000 and $187,000 respectively,
to Buckingham Capital Corporation for such services.

During the year ended June 30, 1997 and the six month period ended December
31, 1997, the Company incurred $155,000 and $144,000, respectively, in
financial consulting fees for services rendered by Buckingham Capital
Corporation in connection with the Company's private offering of $3,000,000
principal amount 12% Senior Subordinated Notes.

TRANSACTIONS WITH LARRY H. RAMMING

On April 30, 1998, Larry H. Ramming, the Chief Executive Officer of the
Company, pledged 4,004,200 shares of Common Stock of the Company owned by him
to secure a loan in the aggregate amount of $7,000,000 from Prudential
Securities Incorporated. Mr. Ramming used the proceeds of such loan to
purchase the Senior Notes and Additional Senior Notes that the Company had
previously issued to two private investors. Mr. Ramming subsequently agreed to
extend the maturity date of the Senior Notes from May 1, 1998, to October 1,
1998, and to extend the maturity date of the Additional Senior Notes from June
15, 1998, to October 1, 1998, in exchange for a one-time fee of up to one
percent of the principal balance thereof ($70,000). As the assignee of the
Senior Notes and Additional Senior Notes, Mr. Ramming holds a security
interest in all of the assets of the Company and has the other rights set
forth in the Senior Note Purchase Agreement.

TRANSACTIONS INVOLVING ARIZONA SECURITIES GROUP, INC.

Arizona Securities Group, Inc. ("Arizona Securities"), served as one of two
placement agents appointed by
the Company in connection with the Company's September private placement of
7,475,000 shares of Common Stock. Among the principals of Arizona Securities
are Mark S. Howells and Jeffrey J. Puglisi. In connection therewith, the
Company paid Arizona Securities a placement fee of $710,000 and issued to
Arizona Securities a warrant to purchase 696,500 shares of Common Stock at an
exercise price of $1.20 per share. In addition, the Company paid Arizona
Securities a non-accountable expenses allowance in the amount of $224,000 and
paid approximately $57,000 to legal counsel for the placement agents for fees
incurred in connection with such offering.

Arizona Securities is serving as the placement agent appointed by the
Company in connection with the Company's private placement of up to 400,000
Units, each consisting of one share of Redeemable Stock and one Unit Warrant.
In connection therewith, through the date hereof, the Company has paid Arizona
Securities a placement fee of approximately $140,000 and paid approximately
$30,000 to legal counsel for Arizona Securities for fees incurred in
connection with such offering.

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<PAGE>

DESCRIPTION OF SECURITIES

AUTHORIZED STOCK

The authorized capital stock of the Company consists of 50,000,000 shares of
$0.00001 par value Common Stock and 5,000,000 shares of $0.00001 par value
preferred stock (the "Preferred Stock"). As of the date hereof, a total of
30,728,298 shares of Common Stock are issued and outstanding options and
warrants to purchase an aggregate of 6,502,269 shares of Common Stock have
been issued, 1,835,000 restricted stock grants have been made. 450,000 shares
of Preferred Stock have been designated as 10% Junior Redeemable Convertible
Preferred Stock ("Redeemable Stock"). As of the date hereof, 112,000 shares of
Redeemable Stock are issued and outstanding. All issued and outstanding shares
of Common Stock and Preferred Stock of the Company are fully paid and
nonassessable.

COMMON STOCK

Holders of shares of Common Stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders of the Company. Except as may
be required by applicable law, holders of shares of Common Stock will not vote
separately as a class, but will vote together with the holders of outstanding
shares of other classes of capital stock. There is no right to cumulate votes
for the election of directors. A majority of the issued and outstanding shares
of Common Stock and the Redeemable Stock, which votes with the Common Stock as
a class, constitutes a quorum at any meeting of stockholders and the vote by
the holders of a majority of the outstanding shares is required to effect
certain fundamental corporate changes such as liquidation, merger or amendment
of the Amended and Restated Certificate of Incorporation.

Holders of shares of Common Stock are entitled to receive dividends, if, as,
and when declared by the Board of Directors out of funds legally available
therefor, after payment of dividends required to be paid on any outstanding
shares of Redeemable Stock or Preferred Stock. Upon liquidation of the
Company, holders of shares of Common Stock are entitled to share ratably in
all assets of the Company remaining after payment of liabilities, subject to
the liquidation preferences of any outstanding shares of Preferred Stock.
Holders of shares of Common Stock have no conversion, redemption or preemptive
rights. The rights of the holders of Common Stock will be subject to, and may
be adversely affected by, the rights of the holders of Preferred Stock
(including the Redeemable Stock).

PREFERRED STOCK

Under the Company's Amended and Restated Certificate of Incorporation, the
Board of Directors has the power, without further action by the holders of the
Common Stock, to designate the relative rights and preferences of the
Company's Preferred Stock, when and if issued. Such rights and preferences
could include preferences as to liquidation, redemption and conversion rights,
voting rights, dividends or other preferences, any of which may be dilutive of
the interest of the holders of Common Stock.

The Board of Directors may, without further action by the stockholders of
the Company, issue shares of Preferred Stock which it has designated. The
rights of holders of Common Stock will be subject to, and may be adversely
affected by, the rights of holders of Preferred Stock. While the issuance of
Preferred Stock provides desired flexibility in connection with additional
financing, possible acquisitions and other corporate purposes, future
issuances may have the effect of delaying, deferring or preventing the change
of control of the Company without further action by the stockholders and may
discourage bids for the Common Stock at a premium over the market price.

450,000 shares of the Preferred Stock have been designated as "10% Junior
Redeemable Convertible Preferred Stock." See "Description of Securities--
Description of Units."

DESCRIPTION OF UNITS

Through the date hereof, the Company has issued in a private placement
112,000 Units, each Unit consisting of one share of Redeemable Stock and one
Warrant representing the right to purchase five shares of Common

46
<PAGE>

Stock at $5.00 per share ("Unit Warrant"), subject to anti-dilution protection
and adjustment under certain circumstances.

Redeemable Stock

Rank. The Redeemable Stock is senior to the Common Stock of the Company
with respect to the payment of dividends and rights upon liquidation,
dissolution or winding up of the affairs of the Company, but the Company
may designate and issue one or more series of preferred stock with rights
equal or superior to the rights of the holders of Redeemable Stock.

Dividends. The holders of the Redeemable Stock are entitled to cumulative
dividends at the rate of 10% per annum on the face value per share thereof
($25.00). Dividends on the Redeemable Stock are initially payable upon the
first to occur of the six month anniversary of the date of issuance or the
redemption thereof. Dividends on shares of Redeemable Stock outstanding
after the six month anniversary of issuance will be payable on the face
value thereof quarterly in arrears. Dividends on the Redeemable Stock may
be paid in cash or, at the election of the Company, in additional shares of
Redeemable Stock, each such share being valued for such purposes at $25.00
per share. The Company may not pay dividends or make any other distribution
on any shares of Common Stock or any equity securities of the Company
junior to the Redeemable Stock in respect of dividends so long as dividends
on the Redeemable Stock are in arrears.

Liquidation, Dissolution, Winding Up. In the event of the liquidation,
voluntary or involuntary, dissolution or winding up of the affairs of the
Company, the holders of the Redeemable Stock then outstanding will be
entitled to be paid out of the assets of the Company available for
distribution to its stockholders, an amount equal to $25.00 per share, plus
any accrued and unpaid dividends on such shares, before any payment or
distribution is made with respect to any Common Stock or equity securities
of the Company junior to the Redeemable Stock in respect of distributions
upon liquidation, dissolution or winding up of the affairs of the Company.

Optional Redemption by the Company. The Redeemable Stock may be redeemed by
the Company at any time on or before the six month anniversary of the date
of issuance (from October 17, 1998 through November 22, 1998, as of the
date hereof) without prior written notice in an amount per share equal to
$25.00, plus any accrued and unpaid dividends thereon. After the six month
anniversary of the date of issuance of the Redeemable Stock and for so long
as such shares are outstanding, the Company may redeem such shares upon
fifteen days prior written notice.

Optional Conversion by Holders. In the event shares of Redeemable Stock are
not redeemed by the Company on or before the six month anniversary of the
date of issuance, each unredeemed share shall thereafter, until the nine
month anniversary of the date of issuance be convertible, at the election
of the holder thereof, into such number of shares of Common Stock as shall
be obtained by dividing $25.00 by 85% of the average of the last reported
sales prices of shares of the Common Stock (or the average of the closing
bid and asked prices if no transactions have been reported), not to exceed
$6.00 per share, for the 10 trading days immediately preceding the receipt
by the Company of written notice from the holder thereof of an election to
so convert such share of Redeemable Stock. In the event the Company has not
redeemed shares of Redeemable Stock on or before the nine month anniversary
of the date of issuance, each unredeemed share shall become immediately
convertible, at the election of the holder thereof, into such number of
shares of Common Stock as shall be obtained by dividing $25.00 by $2.75
(proportionately adjusted for Common Stock splits, combinations of Common
Stock and dividends paid in shares of Common Stock).

Voting Rights. The holders of the Redeemable Stock are entitled (i) to cast
a number of votes equal to the number of shares of Common Stock in which
such shares are convertible, at the record date for the determination of
stockholders entitled to vote on such matters or, if no record date is
established, at the date such vote is taken, and (ii) have voting rights
and powers equal to the voting rights and powers of the Common Stock,
except as set forth below. The holders of the Redeemable Stock have the
right to vote as a

47
<PAGE>

separate class to amend, alter, waive the application of, or repeal
(whether by merger, consolidation or otherwise) any provision of the
Certificate of Designation thereof.

Registration Rights. The holders of Redeemable Stock have certain demand
and piggyback registration rights with respect to the shares issuable upon
the conversion thereof. See "Description of Securities--Registration Rights
of Certain Security Holders."

Unit Warrants

Each Unit includes one Unit Warrant representing the right to purchase five
shares of Common Stock at an exercise price of $5.00 per share ("Warrant
Shares"), subject to anti-dilution protection and adjustments under certain
circumstances. Each Unit Warrant is exercisable for a period of five years
from the date of issuance.

Exercise by Holders. Each Unit Warrant is exercisable for shares of Common
Stock either by the delivery of cash, cashiers check or certified bank
check payable to the Company for the exercise price of the Common Stock
being purchased thereby, or by relinquishing such number of Unit Warrant
Shares as is equal to the aggregate exercise price, based upon the market
price of the Common Stock for the ten trading days immediately preceding
the exercise of the Unit Warrant.

Adjustment of Exercise Price. The exercise price of the Unit Warrant is
subject to adjustment downward in the event the Company issues Common Stock
or securities convertible or exercisable for shares of Common Stock at a
price of less than $4.00 per share. The adjustment is calculated by
dividing (A) an amount equal to the sum of (1) the number of shares of
Common Stock outstanding immediately prior to such issuance or sale
multiplied by the then existing exercise price, and (2) the consideration,
if any, received by the Company upon such issuance or sale, by (B) the
total number of shares of Common Stock outstanding immediately after such
issuance or sale. The exercise price of the Unit Warrant is also subject to
adjustment proportionally in the event the issued and outstanding Common
Stock shall be subdivided into a greater number of shares or combined into
a lesser number of shares.

No Fractional Shares. No fractional shares will be issued upon the exercise
of the Unit Warrants. In lieu of issuing fractions of shares, the Company
will pay the holder thereof an amount in cash equal to the market price of
a share of Common Stock on the exercise date, multiplied by such fraction.

Registration Rights. The holders of the Unit Warrants have certain demand
and piggyback registration rights with respect to the Warrant Shares. See
"Description of Securities--Registration Rights of Certain Security
Holders."

SUBORDINATED NOTES

The Company has issued 12% Senior Subordinated Notes due December 31, 2000
("Subordinated Notes"), of which an aggregate of $100,000 principal amount are
outstanding as of the date of this Prospectus. The holders of Subordinated
Notes hold associated warrants to purchase an aggregate of 26,041 shares of
Common Stock at an exercise price of $3.84 per share. See "Description of
Securities--Stock Options and Warrants."

SENIOR NOTES AND ADDITIONAL SENIOR NOTES

The Company has issued 10% senior secured promissory notes due October 1,
1998 ("Senior Notes") in the aggregate principal amount of $5,000,000 and
additional 10% senior secured promissory notes due October 1, 1998
("Additional Senior Notes") in the aggregate principal amount of $2,250,000.
The Senior Notes and Additional Senior Notes are secured by all of the assets
of the Company and its subsidiaries and impose certain restrictions on the
Company and its subsidiaries. See "Risk Factors--Restrictive Covenants
Relating to Senior Notes." Among the restrictions imposed upon the Company are
that it not pay dividends on or redeem any capital stock so long as the Senior
Notes and Additional Senior Notes are outstanding. The Senior Notes and
Additional Senior Notes were purchased from the original holders thereof by
Larry H. Ramming, the Chief Executive Officer of the Company, on April 30,
1998. See "Certain Transactions."

48
<PAGE>

The Company issued warrants to the original holders of the Senior Notes and
Additional Senior Notes representing the right to purchase 2,500,000 shares,
in the aggregate, of Common Stock. See "Description of Securities--Stock
Options and Warrants." Such warrants include certain demand and piggyback
registration rights with respect to the Common Stock issuable upon the
exercise thereof. See "Description of Securities--Registration Rights of
Certain Security Holders."

Additionally, the Company agreed to give the holders of the Senior Notes and
Additional Senior Notes board visitation rights, such that they may attend
meetings of the board of directors of the Company and receive copies of all
materials distributed at board meetings, and, at the election of the holders
of the Senior Notes and Additional Senior Notes, to nominate a representative
of such holders for election to the board of directors of the Company and
recommend such nominee for election by the shareholders of the Company.

STOCK OPTIONS AND WARRANTS

In connection with the Company's private placement of $3,000,000 of
Subordinated Notes concluded in July 1997, the holders of Subordinated Notes
were issued associated warrants (the "Subordinated Note Warrants") to purchase
Common Stock of the Company. The holders of the Subordinated Notes were
subsequently offered the opportunity to convert their Subordinated Notes into
Common Stock of the Company at a price of $0.75 per share, contingent upon the
extinguishment of their Subordinated Note Warrants without exercise. The
holders of $2,900,000 of Subordinated Notes elected to convert such notes into
Common Stock. As of the date of this Prospectus $100,000 in Subordinated Notes
are outstanding, along with Subordinated Note Warrants representing the right
to purchase an aggregate of 26,041 shares of Common Stock at an exercise price
of $3.84 per share.

In connection with the private placement of 7,475,000 shares of Common Stock
of the Company in September 1997, the Company granted the placement agents in
such offering warrants to purchase an aggregate of 747,500 shares of Common
Stock of the Company at an exercise price of $1.20 per share (the "Placement
Agents' Warrants"). The Placement Agents' Warrants are exercisable for a
period of five years and include certain demand and piggyback registration
rights. See "Description of Securities--Registration Rights of Certain
Security Holders."

In connection with the purchase of the Senior Notes, the proceeds of which
were used to finance the acquisition of ITS, and the Additional Senior Notes,
the original holders thereof, Main Street Merchant Partners II, L.P. ("Main
Street"), and Geneva Associates, L.L.C. ("Geneva"), were granted warrants to
purchase an aggregate of 2,000,000 shares of the Company's Common Stock at a
price of $2.62 per share and warrants to purchase an aggregate of 500,000
shares of the Company's Common Stock at $4.50 per share, respectively
(collectively, the "Main Street/Geneva Warrants"). The Main Street/Geneva
Warrants are exercisable for a period of six years and include demand and
piggyback registration rights. The Company also agreed to issue an additional
warrant for 500,000 shares to such holders at an exercise price of $2.00 per
share in the event of a default under the terms of the Senior Notes or
Additional Senior Notes. See "Description of Securities--Registration Rights
of Certain Security Holders."

The Company has employee and director stock option plans. For a description
of the options issued or issuable pursuant to such plans, see "Executive
Compensation."

VOTING TRUST AGREEMENT

In May 1995, Brian Krause, the Company's President, Raymond Henry, the
Company's Director of Well Control Operations, Richard Hatteberg, the
Company's Senior Vice President, Well Control, and Danny Clayton, the
Company's Senior Vice President and the President of IWC de Venezuela, entered
into a five-year Voting Trust Agreement that gives Larry H. Ramming, the
Company's Chairman and Chief Executive Officer, and Mr. Henry, as co-trustees,
the right to vote all shares of Common Stock now owned or hereafter acquired
by Messrs. Krause, Henry, Hatteberg and Clayton during the five-year period
ending December 31, 2000; provided, that

49
<PAGE>

twenty percent of the shares subject to such agreement are eligible for
release therefrom beginning on each one year anniversary date of the agreement
upon the written request of the party owning such shares. Currently, sixty
percent of such shares may be released from the Voting Trust Agreement but
have not yet been released. In the event that Messrs. Ramming and Henry are
unable to reach an agreement respecting the voting of such shares, the Voting
Trust Agreement designates Charles T. Phillips, attorney at law, as the
tiebreaker.

REGISTRATION RIGHTS OF CERTAIN SECURITY HOLDERS

General. The registration rights granted by the Company generally require
the Company to pay the fees and expenses incurred by it in connection with
such registration and to indemnify the holders (and their affiliates) of
shares sold in any such offering against any losses, claims, damages,
liabilities or expenses incurred by them which arise out of or are based upon
any untrue statement (or alleged untrue statement) of a material fact incident
to such registration, unless made in reliance upon information provided by
such holder for use therein. Each holder whose securities are included in such
registration is required to indemnify the Company (and its affiliates) against
any losses, claims, damages, liabilities or expenses incurred by it which
arise out of or are based upon any untrue statement (or alleged untrue
statement) of a material fact in such registration statement if made in
reliance upon information provided by such holder for use therein.

Units. The holders of the Units have one demand registration right
commencing one year after the closing to register the shares of Common Stock
issuable upon the conversion of the Redeemable Stock and one demand
registration right commencing one year after such closing, to register shares
of Common Stock issuable upon the exercise of the Unit Warrants, such rights
to be exercisable upon the written agreement of the holders of a majority of
the shares of Common Stock issued or issuable upon the conversion of the
Redeemable Stock or a majority of the shares of Common Stock issued or
issuable upon the exercise of the Unit Warrants, respectively. Such holders
also have the right to an unlimited number of piggyback registrations of such
shares. The Company is not required to register any shares that are able to be
sold to the public without registration nor is it required to file a
registration statement for a period of 180 days after the effective date of
any registration statement filed by the Company in which Main Street or Geneva
included shares of Common Stock.

Subordinated Note Warrants. The Subordinated Note Warrants, exercisable for
an aggregate of 26,041 shares of Common Stock at $3.84 per share, have
associated piggyback registration rights entitling the holders thereof to have
the shares of Common Stock issuable upon the exercise thereof included in a
registration statement filed by the Company under the Act (other than a
registration statement on Forms S-8 or S-4).

September Private Placement. The holders of the 7,475,000 shares of Common
Stock purchased in the private placement concluded in September 1997, have
piggyback registration rights entitling the holders thereof to have the shares
of Common Stock purchased by them in such offering included in a registration
statement filed by the Company under the Act (other than a registration
statement on Forms S-8 or S-4).

Placement Agents' Warrants. In connection with the private placement of
Common Stock of the Company in September 1997, the Company agreed that if it
causes a registration statement, or offering statement under Regulation A of
the Act, to be filed with the SEC, Arizona Securities Group, Inc. ("Arizona
Securities") and Paradise Valley Securities, Inc., as the placement agents for
such offering, will have the right during the life of the Placement Agents'
Warrants issued to such agents (exercisable for an aggregate of 747,500
shares) to include in such registration statement or offering statement such
Placement Agents' Warrants and/or the securities issuable upon their exercise.
Additionally, the Company has agreed that, upon written request by a 50%
holder of such Placement Agents' Warrants made during the exercise period of
the Placement Agents' Warrants, it will register the Placement Agents'
Warrants and/or any of the securities issuable upon exercise thereof. The
initial such registration to be at the Company's expense and the second at the
expense of the holder(s).

Principals of Arizona Securities. The Company has granted to Arizona
Securities registration rights covering the 2,001,000 shares of Common Stock
issued to Arizona Securities as compensation for services rendered to the
Company for its efforts in raising capital and any additional shares of Common
Stock acquired by

50
<PAGE>

Arizona Securities and its principals. The registration rights granted to
Arizona Securities were transferred to the principals of Arizona Securities,
Mark S. Howells, Jeffrey T. Puglisi and Scott Tominaga. The registration
rights consist of unlimited "piggyback" registration rights for the five year
period commencing July 29, 1997, and a one-time demand registration right (i)
exercisable twelve months after July 29, 1997, provided that the Company is
eligible to utilize Form S-3 for such registration, or (ii) exercisable
eighteen months after July 29, 1997, regardless of the registration form which
is available to the Company, provided that no demand registration right may be
exercised in the event that piggyback registration rights were available
within the immediately preceding twelve months.

Acquisition of Boots & Coots. The Company granted a one-time demand
registration right to Boots & Coots for the 259,901 shares of Common Stock
issued to Boots & Coots on July 31, 1997, in connection with the acquisition
of its operating assets by the Company, exercisable beginning on July 31,
1999, and further agreed that if the Company files a registration statement
with the SEC at any time within seven years after July 31, 1997, Boots & Coots
will have the right to include in such registration statement such shares of
Common Stock.

Senior Notes and Additional Senior Notes. The Company granted registration
rights to the holders of the Main Street/Geneva Warrants covering the
2,500,000 shares of Common Stock issuable upon the exercise of such warrants.
The registration rights granted include the right to demand two registrations
using Form S-1, an unlimited number of demand registrations on Forms S-2 or S-
3 and an unlimited number of piggyback registrations. Additionally, the
registration rights prohibit the Company from granting any registration rights
which might lead to a registration statement being declared effective within
180 days after the effective date of any registration statement filed by the
Company in which Main Street or Geneva has included shares of Common Stock and
also grant to Main Street and Geneva registration rights no less favorable
than any registration rights subsequently granted by the Company.

Acquisition of Code 3. The stockholders of Code 3 received piggyback
registration rights for the 488,136 shares of Common Stock issued to them in
connection with the acquisition of Code 3 by the Company, which rights entitle
them to include the shares of Common Stock received by them in the acquisition
in a registration statement filed by the Company under the Act (other than
registration statements on Forms S-8 or S-4) until all such shares are
eligible to be resold under Rule 144 or the seventh anniversary of the
issuance thereof (February 20, 2005).

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<PAGE>

SHARES AVAILABLE FOR FUTURE SALE

There are 30,728,298 shares of Common Stock issued and outstanding at the
date of this Prospectus, together with options and warrants that represent the
right to purchase up to 6,502,269 additional shares of Common Stock at prices
ranging between $0.43 and $5.00 per share. Additionally, the Company has made
restricted stock grants for 1,835,000 shares of Common Stock and has issued
112,000 shares of Redeemable Stock and Unit Warrants representing the right to
purchase 560,000 shares of Common Stock at a price of $5.00 per share. Of the
30,728,298 shares of Common Stock outstanding, 8,944,620 shares are
"restricted securities" under the federal securities laws and have not been
registered for resale pursuant to this Prospectus. All such restricted
securities may, in the future, be sold in compliance with the requirements of
Rule 144 promulgated under the Act ("Rule 144"). In general, under Rule 144 as
currently in effect, any affiliate of the Company or any person (or persons
whose shares are aggregated in accordance with Rule 144) who has beneficially
owned restricted securities for at least one year would be entitled to sell
within any three month period a number of shares that does not exceed the
greater of 1% of the issued and outstanding shares of Common Stock
(approximately 307,000 shares) or the reported average weekly trading volume
for the four weeks preceding the sale. Sales under Rule 144 are also subject
to certain manner-of-sale restrictions and notice requirements and to the
availability of current public information concerning the Company. Persons who
have not been affiliates of the Company for at least three months and who have
held their shares for more than two years are entitled to sell restricted
securities without regard to the volume, manner-of-sale, notice and public
information requirements of Rule 144. As a consequence, substantially all the
Company's currently restricted Common Stock will be eligible for public sale
within one year. Significant sales of currently restricted Common Stock may
adversely affect the market price for the Common Stock and, consequently, the
Redeemable Stock and Warrants, particularly if there is a limited trading
market for such shares.

At the time of the September Private Placement each of Raymond Henry, Brian
Krause, Richard Hatteberg, Danny Clayton and Larry Ramming, as Trustee under
the Voting Trust Agreement and individually, entered into an agreement with
the placement agents in such offering pursuant to which such holder agreed
that he would not, without the prior approval of such placement agents, offer
for sale or otherwise dispose directly or indirectly, of any shares of Common
Stock legally or beneficially owned or thereafter acquired by him for a period
of 14 months from September 1997. Such agreement currently covers
approximately 9,120,400 shares of Common Stock; provided, that such placement
agents have consented to the pledge of 4,004,200 shares of Common Stock by Mr.
Ramming. See "Certain Transactions--Transactions with Larry H. Ramming."

In connection with the offering of Units by the Company, each officer and
director of the Company owning of record or beneficially 200,000 shares or
more of Common Stock of the Company entered into a Lock Up Agreement pursuant
to which such person has agreed not to transfer any shares of Common Stock
owned by him for a period of one year from the initial closing of the sale of
the Units (April 17, 1998) without the consent of Arizona Securities,
excluding transfers pursuant to bona fide pledges to financial institutions to
secure indebtedness, for estate planning purposes or made as bona fide gifts.
Such agreement currently covers approximately 10,000,000 shares of Common
Stock.

TRANSFER AGENT

The Transfer Agent for the Common Stock of the Company is American Stock
Transfer & Trust Company, 40 Wall Street, 46th Floor, New York, New York 10005
(Telephone (212) 936-5100).

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<PAGE>

LEGAL MATTERS

The validity of the issuance of the securities offered hereby will be passed
upon for the Company by Brown, Parker & Leahy, LLP, Houston, Texas.

EXPERTS

The financial statements of the Company, Boots & Coots L.P. and Code 3, Inc.
appearing in this Prospectus have been audited by Hein + Associates LLP,
certified public accountants, to the extent and for the periods indicated in
their reports, and have been included herein in reliance upon such reports
given on the authority of such firm as experts in accounting and auditing.

The audited financial statements of the Logistics and Supply Division of ITS
Investments, Inc. included in this Prospectus and elsewhere in the
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
giving said reports.

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<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
I.BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.
Independent Auditor's Report............................................ F-2
Consolidated Balance Sheets of Boots & Coots International Well Control,
Inc., as of June 30, 1997 and December 31, 1997 and Unaudited as of
March 31, 1998 ........................................................ F-3
Consolidated Statements of Operations of Boots & Coots International
Well Control, Inc., for the Years Ended June 30, 1996 and 1997, for the
Six Months Ended December 31, 1997 and Unaudited for the Three Months
Ended March 31, 1998 and 1997.......................................... F-4
Consolidated Statements of Shareholders' Equity of Boots & Coots
International Well Control, Inc., for the Years Ended June 30, 1996 and
1997, and for the Six Months Ended December 31, 1997 and Unaudited for
the Three Months Ended March 31, 1998.................................. F-5
Consolidated Statements of Cash Flows of Boots and Coots International
Well Control, Inc., for the Years Ended June 30, 1996 and 1997, for the
Six Months Ended December 31, 1997 and Unaudited for the Three Months
ended March 31, 1998 and 1997.......................................... F-6
Notes to Consolidated Financial Statements.............................. F-7
II.BOOTS & COOTS, L.P.
Independent Auditor's Report............................................ F-19
Consolidated Balance Sheets of Boots & Coots, L.P., as of December 31,
1995 and 1996.......................................................... F-20
Consolidated Statements of Operations of Boots & Coots, L.P., for the
Years Ended December 31, 1995 and 1996 and the Six Months Ended June
30, 1996 and 1997 (Unaudited).......................................... F-21
Consolidated Statements of Partners' Capital of Boots & Coots, L.P., for
the Years Ended December 31, 1995 and 1996 and the Six Months Ended
June 30, 1997 (Unaudited).............................................. F-22
Consolidated Statements of Cash Flows of Boots & Coots, L.P., for the
Years Ended December 31, 1995 and 1996 and the Six Months Ended June
30, 1996 and 1997 (Unaudited).......................................... F-23
Notes to Consolidated Financial Statements.............................. F-24
III.LOGISTICS AND SUPPLY DIVISION OF ITS INVESTMENTS, INC.
Report of Independent Public Accountants................................ F-27
Statements of Assets to be Acquired and Liabilities to be Assumed of
Logistics and Supply Division of ITS Investments, Inc., as of March 31,
1997 and December 31, 1997 (Unaudited)................................. F-28
Statements of Revenues and Operating Expenses of Logistics and Supply
Division of ITS Investments, Inc., for the Year Ended March 31, 1997
and the Nine Months Ended December 31, 1996 and 1997 (Unaudited)....... F-29
Notes to Financial Statements........................................... F-30
IV.CODE 3, INC.
Independent Auditor's Reports........................................... F-33
Balance Sheet of Code 3, Inc., as of December 31, 1997.................. F-34
Statement of Operations of Code 3, Inc., for the Year Ended December 31,
1997................................................................... F-35
Statement of Shareholders' Deficit of Code 3, Inc., for the Year Ended
December 31, 1997 ..................................................... F-36
Statement of Cash Flows of Code 3, Inc., for the Year Ended December 31,
1997................................................................... F-37
Notes to Financial Statements........................................... F-38
V.UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS
Unaudited Pro Forma Consolidated Statement of Operations for Year Ended
June 30, 1997.......................................................... F-43
Unaudited Pro Forma Consolidated Statement of Operations for Six-Month
Period Ended December 31, 1997......................................... F-44
Unaudited Pro Forma Consolidated Statement of Operations for the Three-
Month Period Ended March 31, 1998...................................... F-45
Notes to Unaudited Pro Forma Consolidated Financial Statements.......... F-46
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITOR'S REPORT

Board of Directors
Boots & Coots International Well Control, Inc.

We have audited the accompanying consolidated balance sheets of Boots &
Coots International Well Control, Inc. and subsidiaries as of June 30, 1997
and December 31, 1997, and the related consolidated statements of operations,
shareholders' equity and cash flows for the years ended June 30, 1996 and
1997, and for the six-month period ended December 31, 1997. These consolidated
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 Boots &
Coots International Well Control, Inc. and subsidiaries as of June 30, 1997
and December 31, 1997, and the results of their operations and their cash
flows for the years ended June 30, 1996 and 1997 and for the six-month period
ended December 31, 1997, in conformity with generally accepted accounting
principles.

/s/ Hein + Associates LLP
-------------------------------------
Hein + Associates LLP

Houston, Texas
March 27, 1998

F-2
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
JUNE 30, DECEMBER MARCH 31,
ASSETS 1997 31, 1997 1998
------ ---------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
CURRENT ASSETS:
Cash................................... $ 701,000 $ 1,717,000 $ 466,000
Receivables--net of allowance for
doubtful accounts of $0, $7,000,
$74,000 at June 30, 1997, December 31,
1997 and March 31, 1998, respectively. 1,381,000 2,766,000 13,292,000
Inventories............................ 288,000 1,131,000 5,389,000
Prepaid expenses and other current
assets................................ 50,000 427,000 537,000
---------- ----------- -----------
Total current assets................. 2,420,000 6,041,000 19,684,000
PROPERTY, PLANT AND EQUIPMENT, net....... 391,000 6,949,000 8,174,000
OTHER ASSETS:
Deferred financing costs and other
assets--net of accumulated
amortization of $15,000, $17,000 and
$66,000 at June 30, 1997, December 31,
1997 and March 31, 1998, respectively. 443,000 87,000 891,000
Goodwill--net of accumulated
amortization of $26,000, $46,000 and
$112,000 at June 30, 1997, December
31, 1997 and March 31, 1998,
respectively.......................... 170,000 984,000 7,828,000
---------- ----------- -----------
Total assets......................... $3,424,000 $14,061,000 $36,577,000
========== =========== ===========
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<S> <C> <C> <C>
CURRENT LIABILITIES:
Accounts payable....................... $ 667,000 $ 1,679,000 $10,496,000
Accrued liabilities and customer
advances.............................. 496,000 486,000 3,356,000
Notes payable--current portion......... 22,000 1,565,000 9,410,000
---------- ----------- -----------
Total current liabilities............ 1,185,000 3,730,000 23,262,000
---------- ----------- -----------
NOTES PAYABLE--net of current portion.... 14,000 9,000 --
12% SENIOR SUBORDINATED NOTES............ 1,400,000 90,000 90,000
COMMITMENTS AND CONTINGENCIES (Note I)
SHAREHOLDERS' EQUITY:
Preferred stock ($.00001 par, 5,000,000
shares authorized, no shares issued or
outstanding).......................... -- -- --
Common stock ($.00001 par, 50,000,000
shares authorized, 14,187,000,
29,999,000 and 30,579,000 shares
issued and outstanding at June 30,
1997, December 31, 1997 and March 31,
1998, respectively)................... -- -- --
Additional paid-in capital............. 1,048,000 11,213,000 14,050,000
Accumulated deficit.................... (222,000) (981,000) (825,000)
---------- ----------- -----------
Total shareholders' equity........... 826,000 10,232,000 13,225,000
---------- ----------- -----------
Total liabilities and shareholders'
equity.............................. $3,424,000 $14,061,000 $36,577,000
========== =========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS ENDED
YEARS ENDED JUNE 30, ENDED MARCH 31,
----------------------- DECEMBER ------------------------
1996 1997 31, 1997 1997 1998
---------- ----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES:............... $1,662,000 $ 2,564,000 $ 5,389,000 $ 240,000 $11,959,000
COSTS AND EXPENSES:
Operating expenses.... 1,320,000 1,460,000 3,785,000 214,000 8,095,000
General and
administrative....... 773,000 1,061,000 1,536,000 343,000 2,572,000
Depreciation and
amortization......... 50,000 111,000 500,000 33,000 311,000
---------- ----------- ----------- ----------- -----------
2,143,000 2,632,000 5,821,000 590,000 10,978,000
---------- ----------- ----------- ----------- -----------
Operating Income (Loss). (481,000) (68,000) (432,000) (350,000) 981,000
Loss on Debt Extinguish-
ment................... -- -- (193,000) -- --
Other Income (Expenses),
primarily
interest............... 4,000 (63,000) (92,000) (9,000) (567,000)
---------- ----------- ----------- ----------- -----------
Income (Loss) Before In-
come Taxes............. (477,000) (131,000) (717,000) (359,000) 414,000
Income Tax Expense (Ben-
efit).................. (138,000) 25,000 42,000 1,000 258,000
---------- ----------- ----------- ----------- -----------
Net Income (Loss)....... $ (339,000) $ (156,000) $ (759,000) $ (360,000) $ 156,000
========== =========== =========== =========== ===========
Basic Net Income (Loss)
Per Common Share....... $ (0.03) $ (0.01) $ (0.03) $ (0.03) $ 0.01
========== =========== =========== =========== ===========
Diluted Net Income
(Loss) Per Common
Share.................. $ (0.03) $ (0.01) $ (0.03) $ (0.03) $ 0.01
========== =========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING--BASIC..... 11,500,000 12,191,000 23,864,000 12,136,000 30,228,000
========== =========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING--DILUTED... 11,500,000 12,191,000 23,864,000 12,136,000 30,638,000
========== =========== =========== =========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

YEARS ENDED JUNE 30, 1996 AND 1997,

SIX MONTHS ENDED DECEMBER 31, 1997

AND THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
----------------- PAID-IN ACCUMULATED SHAREHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT EQUITY
---------- ------ ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
BALANCES, July 1, 1995.. 2,000 $-- $ 1,000 $ 273,000 $ 274,000
Common stock issued... 11,498,000 -- 800,000 -- 800,000
Net loss.............. -- -- -- (339,000) (339,000)
---------- --- ----------- --------- -----------
BALANCES, July 1, 1996.. 11,500,000 -- 801,000 (66,000) 735,000
Common stock options
issued for services
rendered............. -- -- 46,000 -- 46,000
Common stock issued
for services
rendered............. 230,000 -- 10,000 -- 10,000
Common stock issued... 2,457,000 -- -- -- --
Common stock issued as
compensation......... 36,000 -- 36,000
Sale of common stock
warrants............. -- -- 155,000 -- 155,000
Net loss.............. -- -- -- (156,000) (156,000)
---------- --- ----------- --------- -----------
BALANCES, June 30, 1997
....................... 14,187,000 -- 1,048,000 (222,000) 826,000
Common stock issued... 1,315,000 -- -- -- --
Exchange conversion
with Havenwood
reverse merger....... 1,173,000 -- -- -- --
Common stock issued to
acquire Boots & Coots
L.P.................. 260,000 -- 1,000,000 -- 1,000,000
Sale of common stock
warrants............. -- -- 145,000 -- 145,000
Common stock issued to
extinguish debt...... 3,867,000 -- 2,447,000 -- 2,447,000
Sale of common stock,
net of offering
costs................ 7,475,000 -- 6,238,000 -- 6,238,000
Common stock issued to
purchase ABASCO,
Inc.................. 300,000 -- 240,000 -- 240,000
Common stock issued
for services
rendered............. 100,000 -- 80,000 -- 80,000
Common stock issued
upon exercise of
options.............. 1,287,000 -- -- -- --
Common stock issued
upon exercise of
options.............. 35,000 -- 15,000 -- 15,000
Net loss.............. -- -- -- (759,000) (759,000)
---------- --- ----------- --------- -----------
BALANCES, December 31,
1997................... 29,999,000 -- 11,213,000 (981,000) 10,232,000
Common stock issued to
purchase Code 3, Inc.
(unaudited).......... 488,000 -- 2,282,000 -- 2,282,000
Common stock issued
upon exercise of
options (unaudited).. 92,000 -- 39,000 -- 39,000
Warrants issued with
bridge financing
(unaudited).......... -- -- 516,000 -- 516,000
Net income
(unaudited).......... -- -- -- 156,000 156,000
---------- --- ----------- --------- -----------
BALANCES, March 31, 1998
(unaudited)............ 30,579,000 $-- $14,050,000 $(825,000) $13,225,000
========== === =========== ========= ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS ENDED
YEARS ENDED JUNE 30, ENDED MARCH 31,
---------------------- DECEMBER 31, -----------------------
1996 1997 1997 1997 1998
--------- ----------- ------------ ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss)....... $(339,000) $ (156,000) $ (759,000) $(360,000) $ 156,000
Adjustments to reconcile
net income (loss) to
net cash used in
operating activities:
Depreciation and
amortization......... 37,000 74,000 451,000 24,000 245,000
Amortization of
intangibles.......... 13,000 37,000 48,000 9,000 66,000
Warrants issued with
bridge financing..... -- -- -- -- 332,000
Common stock issued as
compensation......... -- 36,000 -- -- --
Deferred income taxes. (139,000) -- -- -- --
Bad debt expense...... -- -- 7,000 -- 9,000
Loss on debt
extinguishment....... -- -- 193,000 -- --
Changes in operating
assets and
liabilities, net of
assets acquired:
Receivables.......... 136,000 (1,076,000) (1,392,000) (234,000) (6,830,000)
Inventories and
supplies............ -- (288,000) 338,000 (59,000) (2,486,000)
Prepaid expenses..... (6,000) (43,000) (380,000) 7,000 (77,000)
Deferred costs and
other assets (not
current)............ -- (34,000) -- (6,000) (80,000)
Accounts payable..... 15,000 601,000 1,013,000 (109,000) 5,419,000
Accrued liabilities
and customer
advances............ -- 497,000 (9,000) 219,000 2,330,000
--------- ----------- ----------- --------- ----------
Net cash used in
operating
activities.......... (283,000) (352,000) (490,000) (509,000) (916,000)
--------- ----------- ----------- --------- ----------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Acquisition of Boots &
Coots................ -- -- (1,221,000) -- --
Acquisition of
ABASCO............... -- -- (1,653,000) -- --
Acquisition of ITS.... -- -- -- -- (6,000,000)
Acquisition of Code3.. -- -- -- -- (570,000)
Property and equipment
additions............ (362,000) (123,000) (188,000) (4,000) (353,000)
Disposition of assets. -- 4,000 39,000 -- --
Acquisition of
business and others.. (116,000) (45,000) -- -- --
--------- ----------- ----------- --------- ----------
Net cash used in
investing
activities.......... (478,000) (164,000) (3,023,000) (4,000) (6,923,000)
--------- ----------- ----------- --------- ----------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Common stock options
exercised............ -- -- 15,000 -- 39,000
Proceeds for issuance
of debt and warrants. 65,000 1,555,000 1,445,000 705,000 8,250,000
Deferred financing
costs................ -- (321,000) (210,000) -- --
Debt repayments....... (98,000) (71,000) (3,223,000) (49,000) (1,702,000)
Proceeds from sales of
common stock......... 691,000 -- 6,503,000 -- --
--------- ----------- ----------- --------- ----------
Net cash provided by
financing
activities.......... 658,000 1,163,000 4,530,000 656,000 6,587,000
--------- ----------- ----------- --------- ----------
NET INCREASE (DECREASE)
IN CASH................ (103,000) 647,000 1,017,000 143,000 (1,252,000)
CASH, beginning of year. 157,000 54,000 701,000 -- 1,718,000
--------- ----------- ----------- --------- ----------
CASH, end of year....... $ 54,000 $ 701,000 $ 1,718,000 $ 143,000 $ 466,000
========= =========== =========== ========= ==========
SUPPLEMENTAL CASH FLOW
DISCLOSURES:
Cash paid for
interest............. $ 1,000 $ 53,000 $ 66,000 $ 1,000 $ 220,000
Cash paid for income
taxes................ $ 1,000 $ 23,000 $ 41,000 $ -- $ --
========= =========== =========== ========= ==========
NON-CASH INVESTING AND
FINANCING ACTIVITIES:
Common stock and
options issued in
exchange for property
and equipment and
services rendered.... $ 109,000 $ 56,000 $ 80,000 $ -- $ --
Conversion of
subordinated debt and
warrants to common
stock................ -- -- $ 3,000,000 $ -- $ --
Issuance of common
stock in
acquisitions......... -- -- $ 1,240,000 $ -- $2,281,000
Transfer of deferred
placement and debt
costs to equity...... -- -- $ 541,000 $ -- $ --
Warrants issued with
bridge financing..... -- -- -- -- $ 184,000
========= =========== =========== ========= ==========
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

A. ORGANIZATION:

Boots & Coots International Well Control, Inc. (the "Company"), formerly
known as Havenwood Ventures, Inc. ("Havenwood"), was incorporated in Delaware
in April 1988. Havenwood was originally formed to serve as a blind pool
investment fund, and in July 1988 Havenwood raised $500,000 in an initial
public offering of its Common Stock. After completing its initial public
offering, Havenwood expended its available resources in the development of a
business enterprise which it ultimately divested, thereafter remaining
inactive, with no material assets or liabilities, until it entered into a
business combination with IWC Services Inc. on July 29, 1997.

The Company acquired IWC Services, Inc. ("IWC Services") on July 29, 1997,
in a "reverse triangular merger" in which it issued shares of Common Stock to
the stockholders of IWC Services in exchange for all of the issued and
outstanding common stock of IWC Services and issued options and warrants to
purchase Common Stock of the Company in exchange for all of the options and
warrants to purchase common stock of IWC Services then outstanding. As a
result of the merger, IWC Services became a wholly-owned subsidiary of the
Company, the stockholders of IWC Services became the beneficial holders of
approximately 93% of the post-merger issued and outstanding shares of Common
Stock and the board of directors and management of IWC Services took over the
management of the Company.

IWC Services, incorporated in Texas on June 27, 1995, was formed with the
issuance of 100,000 shares of no par common stock (increased to 5,000,000
pursuant to a 50-to-one stock split discussed in Note H) in exchange for cash
of $549,000, property and equipment valued at $109,000 assigned by Buckingham
Capital Corporation, and services performed by certain other shareholders. IWC
Services had no operations prior to its acquisition of Hell Fighters, Inc.
(Hell Fighters). The shareholders of Hell Fighters, a Texas corporation,
incorporated on May 4, 1995, contributed to IWC Services all of their
outstanding common shares of Hell Fighters, which then became a wholly-owned
subsidiary of IWC Services.

Under the plan of merger between Havenwood and IWC Services, (i) the
outstanding voting securities of the Company were reverse split in the ratio
of one post-split share for every 135 pre-split shares held by a shareholder,
provided, however, that no single shareholder's share ownership was reduced to
fewer than 100 post-split shares; (ii) certain principal shareholders of the
Company surrendered a total of 741,000 post-split shares to the Company for
cancellation, leaving a total of 1,173,000 shares of common stock issued and
outstanding on the closing date; (iii) each issued and outstanding share of
common stock of IWC Services was converted into 2.30 post-merger shares of the
Company's common stock, amounting to approximately 15,502,000 post-merger
shares in the aggregate (all share amounts herein have been adjusted to
reflect this 2.30 for 1 split; (iv) outstanding options and warrant to
purchase shares of the authorized and unissued common stock of IWC Services
were converted into substantially similar options and warrants to purchase
shares of the Company's authorized and unissued common stock, and (v) IWC
Services became a wholly-owned subsidiary of the Company with the former IWC
Services shareholders, as a group, acquiring shares representing approximately
92% of the resulting capitalization of the Company. Following the completion
of the transactions, there were approximately 16,675,000 shares of the
Company's common stock issued and outstanding, on a fully diluted basis.
Immediately after the merger, all the officers and directors of the Company
resigned and were replaced by representatives of IWC. The business combination
was accounted for as a merger. No goodwill arose from this transaction. As IWC
Services obtained a controlling interest in the Company, the transaction was
accounted for as a reverse merger. Therefore, for financial statement
purposes, IWC Services was considered the acquiror. The consolidated financial
statements reflect the historical operations and cost basis of IWC Services
since its inception.

F-7
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

B. SIGNIFICANT ACCOUNTING POLICIES:

Consolidation--The accompanying consolidated financial statements include
the financial transactions and accounts of the Company and its subsidiaries.
All significant intercompany accounts and transactions are eliminated in
consolidation.

Revenue Recognition--Revenue is recognized on the Company's service
contracts either as earned on the basis of day work completed or, for turnkey
contracts, on the percentage-of-completion method based upon costs incurred to
date and estimated total contract costs. Revenue and cost from equipment sales
is recognized upon contract completion.

Inventories--Inventories consist primarily of equipment, parts and supplies
in work-in-progress. Inventories are valued at the lower of cost or market
using the average cost method.

Property and Equipment--Property and equipment is stated at cost.
Depreciation is provided principally using the straight-line method over the
estimated useful lives of the respective assets as follows: buildings and
improvements (15 years), well control and fire -fighting equipment (8 years),
shop and other equipment (8 years), vehicles (5 years) and office equipment
and furnishings (5 years). Office leasehold improvements are amortized over
the remaining primary lease terms.

Goodwill--The Corporation amortizes costs in excess of fair value of net
assets of businesses acquired using the straight-line method over periods
ranging from 15 to 25 years. Recoverability is reviewed annually or sooner if
events or changes in circumstances indicate that the carrying amount may
exceed fair value. Recoverability is then determined by comparing the
undiscounted net cash flows of the assets to which the goodwill applies to the
net book value including goodwill of those assets. Goodwill shown in the
consolidated financial statements relates to the Company's acquisitions of
IWC, Boots & Coots LP, and ABASCO, and Hell Fighters.

Amortization expense was $13,000 and $37,000 for the years ended June 30,
1996 and 1997, respectively, $20,000 for the six months ended December 31,
1997, and $9,000 and $66,000 for the three months ended March 31, 1997 and
1998, respectively.

Foreign Currency Translation--The functional currency of the Company's
foreign operations is the U.S. dollar. All customer invoices and vendor
payments are denominated in U.S. currency. Revenues and expenses from foreign
operations are remeasured into U.S. dollars on the respective transaction
dates and foreign currency transaction gains or losses are included in the
Consolidated Statements of Operations.

Income Taxes--The Company accounts for income taxes pursuant to the
liability method, which requires recognition of deferred income tax
liabilities and assets for the expected future tax consequences of events that
have been recognized in the Company's financial statements or tax returns.
Under this method, deferred income tax liabilities and assets are determined
based on the temporary differences between the financial statement carrying
amounts and the tax bases of existing assets and liabilities and available tax
carryforwards.

Earnings Per Share--Basic and diluted earnings (loss) per share was computed
by dividing net income (loss) by the weighted average common shares
outstanding during the year ended June 30, 1997 and the six-month period ended
December 31, 1997. Options to purchase shares of common stock were outstanding
during the year ended June 30, 1997 and six-month period ended December 31,
1997 but were not included in the computation of diluted earnings (loss) per
share, either because the option price was greater than the average market
price of the common stock or were anti-dilutive.

F-8
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

Recent Accounting Pronouncements--The Financial Accounting Standards Board
(FASB) issued SFAS No. 121, Accounting for the Impairment of Long- Lived
Assets and for Long-Lived Assets to be Disposed of, which is effective for
fiscal years beginning after December 15, 1995. This pronouncement specifies
certain events and circumstances which indicate the cost of an asset or assets
may be impaired, the method by which the evaluation should be performed, and
the method by which writedowns, if any, of the asset or assets are to be
determined and recognized. The adoption of this pronouncement did not have a
material impact on the Company's financial condition or operating results upon
implementation.

The FASB issued SFAS No. 123, Accounting for Stock Based Compensation, which
is effective for fiscal years beginning after December 15, 1995. This
pronouncement allows companies to choose to adopt the statement's new rules
for accounting for employee stock-based compensation plans. For those
companies who choose not to adopt the new rules, the statement requires
disclosures as to what earnings would have been if the new rules had been
adopted. Management adopted the disclosure requirements of this statement in
the fiscal year ended June 30, 1997.

The FASB issued SFAS No. 128, Earnings Per Share, effective for financial
statements issued after December 31, 1997, including interim periods, that
establishes standards for computing and presenting earnings per share. The new
statement requires retroactive restatement of all prior-period per share data
presented. The Company adopted the disclosure requirements of this statement
and has restated its 1997 amounts to reflect the adoption retroactively.

The FASB issued SFAS No. 130, Reporting Comprehensive Income, and SFAS No.
131, Disclosures About Segments of an Enterprise and Related Information. SFAS
No. 130 establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income is
defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures,
SFAS No. 130 requires that all items that are required to be recognized under
current accounting standards as components of comprehensive income be reported
in a financial statement that displays these items with the same prominence as
other financial statements. SFAS No. 131 supercedes SFAS No. 14, Financial
Reporting for Segments of a Business Enterprise. SFAS No. 131 establishes
standards on the way that public companies report financial information about
operating segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. SFAS No. 131
defines operating segments as components of a company about which separate
financial information is available that is evaluated regularly by the Company
management in deciding how to allocate resources and in assessing performance.

SFAS Nos. 130 and 131 are effective for financial statements presented for
periods beginning after December 15, 1997 and require comparative information
for earlier years to be restated. Management of the Company believes that the
implementation of SFAS Nos. 130 and 131 will not have a material impact on the
presentation of the Company's financial statements, but may require additional
disclosure.

Use of Estimates--The preparation of the Company's consolidated financial
statements in conformity with generally accepted accounting principles
requires the Company's management to make estimates and assumptions that
affect the amounts reported in these financial statements and accompanying
notes. Actual results could differ from these estimates.

Cash Flow Information--The Company considers all unrestricted, highly liquid
investments with a maturity of three months or less at the time of purchase to
be cash equivalents.

F-9
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

Change in Fiscal Year--Effective December 8, 1997, the Company changed its
fiscal year from June 30 to December 31. The consolidated financial statements
include presentation of the transition period beginning on July 1, 1997 and
ending December 31, 1997.

Unaudited summary historical financial data for the Company for the six
months ended December 31, 1996 consisted of the following:

<TABLE>
<S> <C>
Revenues........................................................ $743,000
Operating loss.................................................. (397,000)
Income tax expense.............................................. (13,000)
Net loss........................................................ (409,000)
Basic loss per share............................................ (.04)
Diluted loss per share.......................................... (.04)
</TABLE>

UNAUDITED INTERIM INFORMATION

The accompanying financial information as of March 31, 1998 and for the
three months ended March 31, 1997 and 1998 has been prepared by the Company
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. The financial statements reflect all adjustments,
consisting of normal recurring accruals which are, in the opinion of
management, necessary to fairly present such information in accordance with
generally accepted accounting principals.

C. ACQUISITIONS AND RELATED FINANCING:

On July 31, 1997, IWC acquired all of the operating assets, including stock
of its foreign services subsidiaries, of Boots & Coots, L.P. ("Boots &
Coots"), an oil and gas well control firefighting, snubbing and
industrial and marine firefighting company. The consideration paid consisted
of (I) $369,000 cash payable to Boots & Coots, (ii) $680,568 placed in escrow
to pay certain debts of Boots & Coots, (iii) the issuance of secured
promissory notes of the Company in the aggregate principal amount of
$4,761,000 and (iv) 259,901 shares of Common Stock of the Company, which have
certain demand registration rights. The promissory notes are secured by the
acquired assets of Boots & Coots, and have been paid, with the exception of
approximately $1,044,000 outstanding at March 31, 1998 pending final
determination of foreign tax obligations which is anticipated to be resolved
during the quarter end June 30, 1998. This transaction was accounted for as a
purchase and the acquired assets of Boots & Coots were revalued at fair market
value as of July 31, 1997 resulting in goodwill of $50,000 which will be
amortized over 15 years.

After completion of the merger and the Boots & Coots acquisition, the name
of Havenwood was changed to Boots & Coots International Well Control, Inc.

On September 25, 1997, the Company formed a wholly-owned subsidiary company,
Abasco, Inc. ("Abasco") to purchase the assets of ITS Environmental, a
manufacturer and distributor of rapid response oil and chemical spill
containment and reclamation equipment and products since 1975. The Company
paid $1,590,000 cash and issued 300,000 shares of common stock to acquire the
manufacturing equipment, inventory and customer lists. This transaction was
accounted for as a purchase and the acquired assets of Abasco were revalued at
fair market value effective as of September 12, 1997 resulting in goodwill of
approximately $749,000 which will be amortized over 25 years.

The operations of the two acquired entities are included in the Company's
consolidated operations from the respective acquisition dates. The Company's
revenues, net loss applicable to common shareholders, and net loss

F-10
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

per share on an unaudited pro forma basis, assuming that Boots & Coots and
Abasco acquisitions occurred on July 1, 1996 would be as follows:

<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED ENDED
JUNE 30, DECEMBER 31,
1997 1997
----------- ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Revenues.............................................. $17,390,000 $6,627,000
Net Earnings (Loss)................................... $ 1,011,000 $ (444,000)
Net Earnings (Loss) per Share......................... $ .08 $ (.02)
</TABLE>

Through December 31, 1997 the Company's core business unit was in the oil
and natural gas well control segment of the oil and gas services industry,
providing services on a global basis in oil and gas well blowout control
and/or firefighting, specialized industrial firefighting and well control
equipment rental and sales, consulting engineering services, drilling rig and
production facilities inspection, safety training courses and blowout
contingency planning.

On January 2, 1998, the Company completed the funding of the acquisition of
all of the capital stock of ITS Supply Corporation ("ITS") for aggregate
consideration of $6,000,000. Financing for the acquisition of ITS was provided
from working capital ($500,000); proceeds from the issuance of 10% Senior
Secured Notes due May 21, 1998 ($4,500,000); and short-term bridge financing
from the seller ($1,000,000). The transaction was accounted for as a purchase
and the acquired assets of ITS were revalued at their fair market value as of
January 2, 1998, resulting in goodwill of approximately $4,000,000, which will
be amortized over 25 years.

In connection with the sale through private placement of the 10% Senior
Secured Notes on January 2, 1998, the Company entered into a financial
advisory arrangement pursuant to which the note holders are to provide a
certain level of financial, merger and acquisition advisory services over a
three-year period in consideration of an advance cash consulting fee of
$500,000, all of which was added to the principal balance of the Senior
Secured Notes. The commitment for the Senior Secured Notes by the note holders
also required the payment by the Company of a $50,000 commitment fee. The note
holders were also issued warrants exercisable over a six year term to purchase
an aggregate of 2,000,000 shares of the Company's Common Stock at a price of
$2.62 per share. The Senior Notes are secured by substantially all of the
assets of the Company and its subsidiaries and impose certain restrictions on
the Company and its subsidiaries, including restrictions on dividends and
stock redemptions.

The ITS seller obligation of $1,000,000 bears interest at the rate of 10%
per annum was payable on March 31, 1998 and has been extended on a month to
month basis.

For its most recent fiscal year ended March 31, 1997, ITS contributed
revenues of approximately $41,000,000 and pre-tax operating income of
approximately $1,000,000 to the consolidated operating results of its former
parent company (unaudited). The above pre-tax operating income is prior to
allocations of a portion of the former parent company's corporate overhead
expenses to ITS. Such corporate overhead expense allocations are not
considered to be indicative of incremental costs, if any, to be incurred by
the Company as a result of its ownership of ITS.

On February 20, 1998, the Company completed the acquisition of all of the
stock of Code 3, Inc. ("Code 3"). Consideration for the acquisition of Code 3,
with an effective date for audited purchase price adjustments of December 31,
1997, was $571,000 cash; the repayment of corporate secured debt and interest
thereon of approximately $1,250,000; and the issuance of 488,000 shares of the
Company's Common Stock, of

F-11
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

which 159,000 shares were delivered into escrow to secure the indemnification
obligations of the stockholders of Code 3. Code 3 reported unaudited revenues
of approximately $4,800,000 and pre-tax income of approximately $296,000 for
its fiscal year ended December 31, 1997. This transaction was accounted for as
a purchase and the acquired assets of ITS were revalued at their fair market
value as of February 20, 1998, resulting in goodwill of approximately
$2,800,000, which will be amortized over 25 years.

On March 5, 1998, the Company sold through private placement to the note
holders an additional $2,250,000 of 10% Senior Secured Notes due June 15,
1998. In addition, these note holders were issued warrants, exercisable over a
six year term, to purchase an additional 500,000 shares of the Company's
common stock at a price of $4.50 per share.

An estimated fair value of $516,000 has been attributed to the warrants
issued in connection with the 10% Senior Secured Notes. $332,000 has been
charged to operations as interest expense for the three months ended March 31,
1998, with $184,000 included in deferred financing costs to be expensed during
the quarter ended June 30, 1998. These warrants are exercisable with cash or
by relinquishing such number of shares under warrant as is equal to the
aggregate exercise price based on the then trading date. These warrants have
certain demand and piggyback registration rights with respect to the common
stock issuable upon the exercise thereof.

D. INVENTORIES:

Inventories consisted of the following as of:

<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31, MARCH 31,
1997 1997 1998
-------- ------------ ----------
<S> <C> <C> <C>
Raw material and supplies............... $288,000 $ 239,000 $4,949,000
Work in process......................... -- 35,000 139,000
Finished goods.......................... -- 857,000 301,000
-------- ---------- ----------
$288,000 $1,131,000 $5,389,000
======== ========== ==========
</TABLE>

E. PROPERTY AND EQUIPMENT:

Property and equipment consisted of the following as of:

<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31, MARCH 31,
1997 1997 1998
-------- ------------ ----------
<S> <C> <C> <C>
Land.................................. $ -- $ 140,000 $ 140,000
Buildings and improvements............ 69,000 561,000 590,000
Well control and firefighting equip-
ment................................. 151,000 5,993,000 6,089,000
Shop and other equipment.............. 157,000 380,000 1,132,000
Vehicles.............................. 28,000 134,000 265,000
Office equipment and furnishings...... 96,000 302,000 760,000
-------- ---------- ----------
501,000 7,510,000 8,976,000
Accumulated depreciation and amortiza-
tion................................. (110,000) (562,000) (802,000)
-------- ---------- ----------
Net................................. $391,000 $6,949,000 $8,174,000
======== ========== ==========
</TABLE>

F-12
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

F. INCOME TAXES:

The Company and its wholly-owned domestic subsidiaries file a consolidated
federal income tax return. The provision for income taxes shown in the
Consolidated Statements of Operations differs from the amount that would be
computed if the loss before income taxes were multiplied by the federal income
tax rate (statutory rate) as follows:

<TABLE>
<CAPTION>
YEAR YEAR SIX MONTHS
ENDED ENDED ENDED
JUNE 30, JUNE 30, DECEMBER 31,
1996 1997 1997
--------- -------- ------------
<S> <C> <C> <C>
Tax benefit at statutory
rate..................... $(162,000) $(45,000) $(258,000)
Foreign taxes............. 1,000 25,000 41,000
Unrecognized net operating
losses................... 23,000 45,000 258,000
--------- -------- ---------
Provision (benefit) for
income taxes........... $(138,000) $ 25,000 $ 41,000
========= ======== =========
</TABLE>

The approximate tax effect of significant temporary differences representing
deferred tax assets and liabilities are as follows as of:

<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1997
-------- ------------
<S> <C> <C>
Net operating loss carryforwards................... $ 74,000 332,000
Valuation allowance................................ (74,000) (332,000)
-------- --------
Net deferred tax asset, net...................... $ -- $ --
======== ========
</TABLE>

The valuation allowance increased $30,000, $44,000 and $258,000 in the years
ended June 30, 1996, 1997 and the six months ended December 31, 1997,
respectively, because of net operating loss carryforwards generated in those
years. There were no other significant temporary differences as of June 30,
1997 and December 31, 1997.

As of December 31, 1997, the Company has net operating loss carryforwards of
approximately $980,000 expiring in various amounts beginning in 2011.

G. NOTES PAYABLE:

Notes payable consisted of the following:

<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31, MARCH 31,
1997 1997 1998
-------- ------------ ---------
<S> <C> <C> <C>
Vehicle and equipment notes bearing interest at
rates from 9.25% to 12.25%, payable in monthly
installments, through January 2001 and
collateralized by vehicles and equipment...... $37,000 $30,000 $117,000
</TABLE>

Also see Note C regarding the notes payable to Boots & Coots, L.P., and
subsequent acquisitions.

In January 1997, the Company commenced an offering for up to $5,000,000 of
debt financing on a "best-efforts" basis through a Private Placement
Memorandum providing for the issuance of a minimum of 500 and a maximum of
5,000 Investment Units at a price of $1,000 per Unit with a minimum investment
of 25 Units. Each Unit consisted of a 12% Senior Subordinated Note (the
"Notes") of the Company in the principal amount of $1,000 with a warrant to
purchase under certain circumstances shares of the Company's common stock at a

F-13
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

discounted price. Management estimated the fair value of the proceeds
applicable to the warrants issued through June 30, 1997 to be $155,000 and
during July 1997 to be $145,000, which amounts have been reflected as a
discount on the Notes and an increase to additional paid-in capital. Interest
on the Notes at the rate of 12% per annum (13.3% effective interest rate based
on reduced note balances) is payable semi- annually commencing July 1, 1997
with maturity date for the Notes on December 31, 2000, subject to extension
for up to two periods of six months each with an increase in the interest rate
to 14%. Net proceeds, after sales commissions and offering expenses, (deferred
and amortized over term of notes) from this financing were utilized for
working capital and business expansion purposes. Through June 30, 1997
subscriptions for $1,555,000 were received and funded. Subsequent to June 30,
1997 the Company received additional subscription agreements of $1,445,000
though termination of the offering in July 1997.

Effective September 12, 1997, holders of the Company's 12% Senior
Subordinated Notes were offered the election to exercise the warrants into
common stock of the Company at an exchange rate of $.75 per share with payment
accomplished through surrender and retirement of their notes. An aggregate
face amount of $2,900,000 of Notes were converted into an aggregate of
3,867,000 shares of common stock with $193,000 recognized as a charge to
operations for early extinguishment of indebtedness. The carrying amount, net
of costs associated with debt offering, was transferred to equity at time of
conversion.

H. SHAREHOLDERS' EQUITY:

At June 30, 1996, the Company authorized 1,000,000 shares of no par common
stock of which 100,000 shares were issued and outstanding. Effective December
17, 1996, the Company amended its Articles of Incorporation and By-Laws
increasing its authorized capital stock to 50,000,000 shares of $0.01 par
value common stock by effecting a 50-to-1 stock split and 5,000,000 shares of
$0.00001 par value preferred stock, which may be issued at the discretion of
the Board of Directors. At June 30, 1997 and December 31, 1997, a total of
14,187,000 shares and 29,999,000 shares, respectively, of common stock were
issued and outstanding. As discussed in Note A, on July 29, 1997 the Company
completed a merger with Havenwood Ventures, Inc. and the par value of the
common stock became $.00001 per share. All references herein have been
restated to reflect the amended amounts.

On September 18, 1997, the Company closed a private placement offering for
the sale of 7,475,000 shares of common stock at $1 per share for a total of
$7,475,000. Proceeds to the Company after placement agents' fees and expenses
of the offering were approximately $6,323,000 and were used for payment on the
Boots & Coots, L.P. acquisition notes and for working capital. Additionally,
the placement agents were awarded 2,001,000 shares of common stock of the
Company and 748,000 warrants at an exercise price of $1.20, which are
exercisable for a period of four years from grant date for their participation
in the sale of common stock. These common shares subject to warrant have
certain demand and piggyback registration rights.

In November 1996, the Board of Directors approved the 1996 Incentive Stock
Plan which allowed the Board of Directors to grant up to 960,000 incentive
stock options to eligible employees. These options are exercisable by the
holders thereof for a period of 10 years from the date of grant.

In November 1997, the Board of Directors approved the 1997 Incentive Stock
Plan, which will allow the Company to grant an additional 1,475,000 incentive
stock options to eligible employees. The terms of the 1997 plan are
substantially the same as the 1996 plan discussed above.

Also in November 1997, the Board of Directors adopted the Outside Directors'
Option Plan (the "Director's Plan"). The Directors' Plan provides for the
issuance an option to purchase 15,000 shares per year to each member of the
Board of Directors who is not an employee of the Company. Options may be
exercised over a

F-14
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

five-year period with the initial right to exercise, starting one year from
the date of the grant, provided the director has not resigned or been removed
for cause by the Board of Directors prior thereto. After one year from the
date of the grant, options outstanding under the Director' Plan may be
exercised regardless of whether the individual continues to serve as a
director. Options granted under the Directors' Plan are not transferable
except by will or by operation of law. 45,000 options have been granted under
the Directors Plan as of December 31, 1997.

The Board of Directors also approved an Executive Compensation Plan, which
will allow the Company to grant additional options covering 1,475,000 shares
of the Company's common stock. The terms of this plan are substantially the
same as the two incentive plans.

Activity in these option plans for the year ended June 30, 1997, six months
ended December 31, 1997 and three months ended March 31, 1998 was as follows:

<TABLE>
<CAPTION>
WEIGHTED
AVERAGE
NUMBER EXERCISE PRICE
OF SHARES PER SHARE
--------- --------------
<S> <C> <C>
Outstanding June 30, 1996....................... -- $ --
Granted....................................... 690,000 0.43
Exercised..................................... -- --
Expired....................................... -- --
--------- -----
Outstanding June 30, 1997....................... 690,000 0.43
Granted....................................... 525,000 2.58
Exercised..................................... (161,000) 0.43
Cancelled..................................... (12,000) 0.43
--------- -----
Outstanding December 31, 1997................... 1,043,000 1.41
Granted....................................... -- --
Exercised..................................... (92,000) 0.43
Cancelled..................................... (128,000) 0.43
--------- -----
Outstanding March 31, 1998...................... 823,000 $1.80
========= =====
</TABLE>

As of December 31, 1997, 349,000 ($.43) options are currently exercisable
and the remaining options vest over a period of five years from date of grant.

In December 1996 and April 1997, the Company issued a total of 1,265,000
contractual stock options to five persons, including 460,000 options issued to
certain officers and directors and 350,000 options issued to two attorneys.
These contractual stock options have a two-year term beginning on the original
date of grant, are fully vested and are immediately exercisable by the holders
thereof at a price of $0.43 per share. During the six months ended December
31, 1997, the Company allowed the exercise of these options through the
redemption of common shares owned by the option holders. These shares had been
owned for a period adequate to place the option holders at risk for market
fluctutation; therefore, no compensation expense has been recorded by the
Company for the shares issued pursuant to this option exercise.

In December 1997, the Company granted 50,000 options to a consultant at an
exercise price of $3.66 per share. These options are excercisable upon grant
and remain exercisable for a period of five years from the grant date.

In September 1997, the Company granted 80,000 options to two consultants at
an exercise price of $2 per share. These options are exercisable upon grant
and remain excercisable for a period of four years from the grant date.

Also see note C relating to additional warrants issued.

F-15
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

The Company applies APB Opinion 25, Accounting for Stock Issued to
Employees, and related interpretations in accounting for its plans.
Accordingly, no compensation cost has been recognized for its stock option
plans. Had compensation expense for the Company's stock-based compensation
plans been determined based on the fair value at the grant dates for awards
under those plans, consistent with the method of SFAS No. 123, the Company's
reported net loss and net loss per common share would have changed to the pro
forma amounts indicated below:

<TABLE>
<CAPTION>
YEAR SIX MONTHS
ENDED ENDED
JUNE 30, DECEMBER
1997 31, 1997
--------- -----------
<S> <C> <C> <C>
Net loss............................. As reported $(156,000) $ (759,000)
Pro forma $(220,000) $(1,029,000)
Net loss per common share............ As reported $ (0.01) $ (0.03)
Pro forma $ (0.02) $ (0.04)
</TABLE>

The fair value of each option grant was estimated on the date of grant using
Black-Scholes option pricing model with the following assumptions: risk-free
rate of 6%, volatility of 97%, no assumed dividend yield and expected lives of
one to three years.

I. RELATED PARTY TRANSACTIONS:

The Company shares certain administrative facilities and services including
corporate office space, administrative personnel and office support equipment
with Buckingham Capital Corporation, an affiliate of the Company's controlling
shareholder. For the years ended June 30, 1996 and 1997 and six months ended
December 31, 1997, the Company paid approximately $215,000, $236,000 and
$186,000, respectively, to Buckingham Capital Corporation for such services.
For the three months ended March 31, 1997 and 1998 the Company paid
approximately $39,000 and $0, respectively. Management believes such charges
are comparable to what would have been paid to outside parties for such
facilities and services.

During the year ended June 30, 1997 and the six months ended December 31,
1997, the Company incurred $156,000 and $145,000, respectively, in financial
consulting fees for services rendered by Buckingham Capital Corporation in
connection with the Company's private offering of $3,000,000 principal amount
of 12% Senior Subordinated Notes. Such amounts were included with deferred
financing costs in the consolidated balance sheet and amortized over the term
of the Notes, $2,900,000 of which were converted to equity in September 1997
(see Note F).

Also see Note L for discussion of the purchase of Senior Notes by the
Company's Chairman.

J. COMMITMENTS AND CONTINGENCIES:

The Company leases shop and equipment storage facilities under operating
leases with terms in excess of one year.

At December 31, 1997, future minimum lease payments under these
noncancellable operating leases are approximately:

<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31: AMOUNT
------------------------- --------
<S> <C>
1998............................................................. $131,000
1999............................................................. 128,000
2000............................................................. 75,000
2001............................................................. 75,000
2002............................................................. 75,000
Thereafter....................................................... 50,000
--------
$534,000
========
</TABLE>

F-16
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

Rent expense for the years ended June 30, 1996 and 1997 and the six months
ended December 31, 1997, was approximately $47,000, $77,000 and $140,000,
respectively. Rent expense for the three months ended March 31, 1997 and 1998
was approximately $12,000 and $104,000, respectively.

K. REVENUES FROM MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK:

During the periods presented below, the following customers represented
significant concentrations of consolidated revenues:

<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS
YEAR ENDED YEAR ENDED ENDED ENDED
JUNE 30, JUNE 30, DECEMBER 31, MARCH 31,
1996 1997 1997 1998
---------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Customer A................ $679,000 $385,000 $ -- $ --
Customer B................ -- 757,000 -- --
Customer C................ -- 416,000 -- --
Customer D................ -- -- 1,454,000 --
Customer E................ -- -- 568,000 --
Customer F................ $223,000 -- -- --
Customer G................ -- -- -- 1,334,000
Customer H................ -- -- -- 1,557,000
</TABLE>

The Company's revenues are generated geographically as follows:

<TABLE>
<CAPTION>
YEAR SIX MONTHS THREE MONTHS
YEAR ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, DECEMBER 31, MARCH 31,
1996 1997 1997 1998
---------- -------- ------------ ------------
<S> <C> <C> <C> <C>
Domestic customers.......... 34% 71% 61% 67%
Foreign customers........... 66% 29% 39% 33%
</TABLE>

Four of the Company's customers (each in excess of 10%) collectively
accounted for 86% of outstanding accounts receivable at June 30, 1997. Two of
the Company's customers collectively accounted for 27% of outstanding accounts
receivable at December 31, 1997. The Company believes that future accounts
receivable with these companies will continue to be collected under normal
credit terms based on previous experience. The Company performs ongoing
evaluations of its customers and generally does not require collateral. The
Company assesses its credit risk and provides an allowance for doubtful
accounts for any accounts which it deems doubtful of collection.

The Company maintains deposits in banks which may exceed the amount of
federal deposit insurance available. Management believes that any possible
deposit loss is minimal.

L. EVENTS SUBSEQUENT TO MARCH 31, 1998:

Subsequent to March 31, 1998, the Company offered through a private
placement of 400,000 units ($25 per unit), which each includes one share of
redeemable preferred stock and one warrant representing the right to purchase
five shares of common stock of $5 per share, subject to anti-dilution
protection and adjustment under certain circumstances. The preferred shares
are redeemable at the option of the Company for up to six months for $25 per
share, plus accrued and unpaid dividends. If not redeemed by the Company
before the six month

F-17
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1997 IS UNAUDITED)

anniversary, the shares become convertible at the option of the holder at 85%
of the market price of the Company's common stock (not to exceed $6). If
unredeemed at the nine month anniversary, the shares become convertible at the
option of the holder into such number of shares of the Company's common stock
as shall be obtained by dividing $25 by $2.75. The incremental number of
shares of common stock issued due to the lower conversion price is charged as
dividends when the number of shares to be issued becomes known. The warrants
are exercisable for a period of five years from the date of issuance and can
be exercised with cash or by relinquishing such number of these warrant shares
as is equal to the aggregate exercise price based on the then trading price.
The holders of these warrants have certain demand and piggyback registration
rights. Through May 27, 1998, the Company has sold approximately 112,000
units.

The Company's Chairman and Chief Executive Officer, Larry H. Ramming, was
granted a waiver of the lock-up restrictions on his shares of Common Stock
with respect to a pledge of such shares to secure a loan, the proceeds of
which were used by Mr. Ramming on April 30, 1998 to purchase the 10% Senior
Secured Notes issued by the Company, in the aggregate principal amount of
$7,250,000, of which $5,000,000 was due May 2, 1998 and $2,250,000 was due
June 15, 1998. Mr. Ramming has agreed to extend the maturity dates of such
notes to October 1, 1998, in exchange for a fee of up to 1% of the principal
balances of such notes.

Effective May 1, 1998, the Board of Directors of the Company authorized
compensation arrangements for Messrs. Ramming, Easley and Krause pursuant to
which they are presently compensated at annual cash compensation rates of
$275,000, $175,000 and $150,000, respectively. Mr. Ramming was also granted as
a part of his compensation arrangements a Restricted Stock Award under the
Company's 1997 Executive Compensation Plan of 300,000 shares of Common Stock
which will vest at a rate of 25,000 shares per quarter commencing on June 30,
1998. Further and in recognition of the efforts of Messrs. Ramming, Easley and
Krause in the recent successful acquisitions accomplished by the Company, the
Board authorized Restricted Stock Awards under the Company's 1997 Executive
Compensation Plan to such persons in the amounts of 300,000, 200,000 and
100,000 shares, respectively, which shall vest at a rate of 10% per annum
commencing December 31, 1999. In addition and in connection with such stock
awards, the Board authorized the payment to such persons of annual cash
bonuses in such amounts as will cover all federal income tax liability related
to such awards, including with respect to the cash bonus amount. Finally, on
May 18, 1998, the Board granted to Mr. Easley a contractual option to purchase
200,000 shares of Common Stock over a five year period at an exercise price of
$4.00 per share. The closing sales price of the Common Stock on Amex on May
18, 1998, was $6.437. Accordingly, significant compensation costs will result
from these grants over the respective vesting periods of the grants based on
the trading prices at the grant dates.

The Company currently needs additional working capital to fund its existing
operations and to repay indebtedness in the aggregate principal amount of
$9,250,000 which comes due on or before to October 1, 1998. The Company is
continuing to offer the remaining Units in its Unit Offering through June 15,
1998, and is exploring various financing alternatives to enable it to retire
all of the outstanding Senior Notes, Additional Senior Notes, seller notes and
to finance future acquisitions by the Company. Such financing alternatives
include: (1) consideration for the offering through private placement on a
best-efforts basis of a Convertible Preferred Stock Offering; (2) discussions
with certain commercial banks for a secured debt facility; and, (3)
discussions regarding the possible private placement of Subordinated Notes.
Although these financing efforts are in process and not yet completed,
management believes these actions, together with cash flows from operations,
will provide adequate funding to the Company. In the event that one or more of
these financing alternatives under consideration are not accomplished, the
Company could be required to restructure current indebtedness, sell assets to
repay indebtedness, curtail expansion plans and fund business activities from
only internally generated funds. There can be no assurance, however, that the
Company will be successful in obtaining financing through alternative means on
acceptable terms.

F-18
<PAGE>

INDEPENDENT AUDITOR'S REPORT

To the Partners
Boots & Coots, L.P.
Houston, Texas

We have audited the accompanying consolidated balance sheets of Boots &
Coots, L.P. and subsidiaries as of December 31, 1995 and 1996, and the related
consolidated statements of operations, partners' capital and cash flows for
the years then ended. These consolidated financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Boots &
Coots, L.P. and subsidiaries as of December 31, 1995 and 1996, and the results
of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.

HEIN + ASSOCIATES LLP

Houston, Texas
June 25, 1997

F-19
<PAGE>

BOOTS & COOTS, L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, JUNE 30,
1995 1996 1997
------------ ------------ -----------
(UNAUDITED)
ASSETS
------
<S> <C> <C> <C>
CURRENT ASSETS:
Cash.................................... $ 491,000 $ 1,604,000 $ 497,000
Receivables--trade and other (no allow-
ance for doubtful
accounts).............................. 470,000 2,634,000 2,316,000
Inventories and supplies................ 58,000 123,000 123,000
Prepaid taxes and other expenses........ 1,000 5,000 7,000
----------- ----------- ----------
Total current assets.................. 1,020,000 4,366,000 2,943,000
----------- ----------- ----------
PROPERTY AND EQUIPMENT:
Land.................................... 140,000 140,000 140,000
Buildings and improvements.............. 561,000 561,000 561,000
Firefighting equipment.................. 2,429,000 2,710,000 2,774,000
Vehicles................................ 115,000 156,000 183,000
Furniture, fixtures and office equip-
ment................................... 129,000 160,000 195,000
----------- ----------- ----------
3,374,000 3,727,000 3,853,000
Accumulated depreciation and amortiza-
tion................................. (1,394,000) (1,320,000) (1,611,000)
----------- ----------- ----------
1,980,000 2,407,000 2,242,000
----------- ----------- ----------
OTHER ASSETS:
Intangibles, net........................ 938,000 813,000 750,000
Goodwill, net........................... 124,000 114,000 110,000
Other assets............................ 228,000 132,000 93,000
----------- ----------- ----------
1,290,000 1,059,000 953,000
----------- ----------- ----------
Total assets.......................... $ 4,290,000 $ 7,832,000 $6,138,000
=========== =========== ==========
<CAPTION>
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
<S> <C> <C> <C>
CURRENT LIABILITIES:
Accounts payable........................ $ 513,000 $ 1,611,000 $ 202,000
Accrued liabilities..................... 21,000 302,000 --
Accrued interest........................ 347,000 165,000 231,000
Foreign income taxes payable............ -- 13,000 --
Deferred foreign income taxes........... -- 273,000 166,000
Accrual for other foreign taxes......... -- 434,000 264,000
----------- ----------- ----------
Total current liabilities............. 881,000 2,798,000 863,000
NOTES PAYABLE--affiliates................. 500,000 500,000 500,000
----------- ----------- ----------
Total liabilities..................... 1,381,000 3,298,000 1,363,000
COMMITMENTS AND CONTINGENCIES (Note E)....
PARTNERS' CAPITAL......................... 2,909,000 4,534,000 4,775,000
----------- ----------- ----------
Total liabilities and partners'
capital.............................. $ 4,290,000 $ 7,832,000 $6,138,000
=========== =========== ==========
</TABLE>

See accompanying notes to these consolidated financial statements.

F-20
<PAGE>

BOOTS & COOTS, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER SIX MONTHS
31, ENDED JUNE 30,
----------------------- ----------------------
1995 1996 1996 1997
---------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES....................... $1,469,000 $13,401,000 $7,154,000 $4,150,000
COSTS AND EXPENSES:
Operating expenses........... 128,000 8,062,000 5,182,000 2,140,000
General and administrative... 1,062,000 2,252,000 834,000 1,070,000
Depreciation and amortiza-
tion........................ 679,000 523,000 298,000 353,000
---------- ----------- ---------- ----------
1,869,000 10,837,000 6,314,000 3,563,000
---------- ----------- ---------- ----------
OPERATING INCOME (LOSS)...... (400,000) 2,564,000 840,000 587,000
OTHER INCOME (EXPENSES):
Foreign currency translation
gain (loss)................. 47,000 (260,000) (238,000) 201,000
Other income (expense)....... (7,000) 110,000 194,000 --
---------- ----------- ---------- ----------
40,000 (150,000) (44,000) 201,000
---------- ----------- ---------- ----------
INCOME BEFORE TAXES............ (360,000) 2,414,000 796,000 788,000
INCOME TAXES (FOREIGN)......... -- 624,000 259,000 166,000
---------- ----------- ---------- ----------
NET INCOME (LOSS).............. $ (360,000) $ 1,790,000 $ 537,000 $ 622,000
========== =========== ========== ==========
</TABLE>

See accompanying notes to these consolidated financial statements.

F-21
<PAGE>

BOOTS & COOTS, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 1995 AND 1996
AND SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)

<TABLE>
<CAPTION>
TOTAL
PARTNERS'
CAPITAL
----------
<S> <C>
BALANCES, January 1, 1995........................................... $3,436,000
Net loss.......................................................... (360,000)
Partner distributions............................................. (167,000)
----------
BALANCES, December 31, 1995......................................... 2,909,000
Net income........................................................ 1,791,000
Partner distributions............................................. (167,000)
----------
BALANCES, December 31, 1996......................................... 4,533,000
Net income (unaudited)............................................ 622,000
Partner distributions (unaudited)................................. (380,000)
----------
BALANCES, June 30, 1997 (unaudited)................................. $4,775,000
==========
</TABLE>

See accompanying notes to these consolidated financial statements.

F-22
<PAGE>

BOOTS & COOTS, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED SIX MONTHS
DECEMBER 31, ENDED JUNE 30,
---------------------- --------------------
1995 1996 1996 1997
--------- ----------- -------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss)............... $(360,000) $ 1,790,000 $537,000 $ 622,000
Adjustments to reconcile net
income (loss) to net cash
provided by (used in) operating
activities:
Depreciation and amortization.. 679,000 523,000 298,000 353,000
Deferred income taxes.......... -- 273,000 -- 166,000
Net effect of changes in assets
and liabilities related to
operating accounts:
Receivables................... (394,000) (2,164,000) 410,000 318,000
Inventories and supplies...... (58,000) (65,000) (50,000) --
Prepaid expenses.............. (1,000) (4,000) (25,000) (2,000)
Accounts payable.............. 498,000 1,098,000 (271,000) (1,409,000)
Accrued liabilities........... 21,000 281,000 (21,000) (302,000)
Accrued interest.............. 214,000 (182,000) (347,000) 66,000
Income taxes payable.......... -- 13,000 (114,000) (13,000)
Accrued other taxes........... -- 436,000 75,000 (170,000)
Other, net.................... (13,000) 10,000 285,000 (230,000)
--------- ----------- -------- ----------
Net cash provided by (used in)
operating activities.......... 586,000 2,009,000 777,000 (601,000)
--------- ----------- -------- ----------
CASH FLOWS FROM INVESTING
ACTIVITIES--
Property and equipment
additions...................... (675,000) (729,000) (709,000) (126,000)
--------- ----------- -------- ----------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Loan proceeds................... -- -- 250,000 --
Partner distributions........... (167,000) (167,000) (56,000) (380,000)
--------- ----------- -------- ----------
Net cash provided by (used in)
financing activities........... (167,000) (167,000) 194,000 (380,000)
--------- ----------- -------- ----------
NET INCREASE (DECREASE) IN CASH.. (255,000) 1,113,000 262,000 (1,107,000)
CASH, beginning of period........ 746,000 491,000 491,000 1,604,000
--------- ----------- -------- ----------
CASH, end of period.............. $ 491,000 $ 1,604,000 $753,000 $ 497,000
========= =========== ======== ==========
SUPPLEMENTAL CASH FLOW
DISCLOSURES:
Cash paid for interest.......... $ 67,000 $ 12,000 $ 23,000 $ 26,000
Cash paid for income taxes...... $ -- $ 306,000 $ 31,000 $ 308,000
========= =========== ======== ==========
</TABLE>

See accompanying notes to these consolidated financial statements.

F-23
<PAGE>

BOOTS & COOTS, L.P. AND SUBSIDIARIES

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1996 IS UNAUDITED)

A. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:

Organization--Boots & Coots, L.P. (B&C or the Partnership), a Colorado
limited partnership, commenced business activities in April 1993. The
Partnership wholly owns Boots & Coots Overseas Inc. (a British Virgin Islands
Corporation), which owns 100% of Boots and Coots de Venezuela, SA (domiciled
in Anaco, Venezuela), which holds in excess of 50% of the Partnership's
consolidated assets in Venezuela. The Partnership also wholly owns Boots &
Coots Consulting, Inc. (a Texas Corporation).

B&C and its subsidiaries are engaged in the oil and natural gas well control
segment of the oil field services industry, providing services on an
international basis in well blowout control and/or firefighting, specialized
firefighting and well control equipment rental and sales, consulting
engineering services, drilling rig and productions facilities inspection,
safety training courses and blowout contingency planning.

The accompanying consolidated financial statements include the financial
transactions and accounts of B&C and its subsidiaries. All significant
intercompany accounts and transactions are eliminated in consolidation.

Property and Equipment--Property and equipment is stated at cost.
Depreciation is provided principally using straight-line and accelerated
methods over the expected useful lives of the respective assets as follows:
building and improvements (15 to 31 1/2 years), firefighting equipment (5
years), shop and other equipment (7 years), vehicles (5 years) and furniture,
fixtures and office improvements (7 years).

Intangibles--Goodwill arose in 1993 upon the original acquisition of the
assets of the predecessor business to B&C and is being amortized over fifteen
years on a straight-line basis. Agreements for consulting and non-competition
are being amortized over the respective lives of the agreements. Organization
costs are being amortized over five years.

Revenue Recognition--Revenue is recognized on the Partnership's service
contracts either as earned on the basis of day work completed or, for turnkey
contracts, on the percentage-of-completion method based upon costs incurred to
date and estimated total contract costs.

Foreign Currency Translation--The functional currency of the Partnership's
foreign operations is the U.S. dollar. Foreign currency transaction gains or
losses are included in the Consolidated Statements of Operations.

Income Taxes--The Partnership is not subject to federal or state taxes on
its domestic income. The partners include in their federal and state returns
the respective portion of the Partnership's results of domestic operations.
The Partnership's subsidiaries are responsible for paying any foreign income
taxes due in foreign jurisdictions.

The Partnership accounts for deferred income taxes on the liability method,
which requires recognition of deferred income tax liabilities and assets for
the expected future tax consequences of events that have been recognized in
the Partnership's financial statements or tax returns. Under this method,
deferred income tax liabilities and assets are determined based on the
temporary differences between the financial statement carrying amounts and the
tax bases of existing assets and liabilities and available tax carryforwards.

Recent Accounting Pronouncement--The Financial Accounting Standards Board
(FASB) issued SFAS No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of, which is effective for fiscal
years beginning after December 15, 1995. This pronouncement specifies certain
events and circumstances which indicate the cost of an asset or assets may be
impaired, the method by which the evaluation should be performed, and the
method by which writedowns, if any, of the asset or assets are to be
determined and recognized. The adoption of this pronouncement in 1996 did not
have a material impact on the Company's financial condition or operating
results.

F-24
<PAGE>

BOOTS & COOTS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1996 IS UNAUDITED)

Unaudited Interim Information--The accompanying financial information as of
June 30, 1997 and for the six months ended June 30, 1996 and 1997 has been
prepared by the Partnership without audit. The financial statements reflect
all adjustments, consisting of normal recurring accruals which are, in the
opinion of management, necessary to fairly present such information in
accordance with generally accepted accounting principles.

Use of Estimates--The preparation of the Partnership's consolidated
financial statements in conformity with generally accepted accounting
principles requires the Partnership's management to make estimates and
assumptions that affect the amounts reported in these financial statements and
accompanying notes. Actual results could differ from these estimates.

Cash Flow Information--The Partnership considers all unrestricted, highly
liquid investments with a maturity of three months or less at the time of
purchase to be cash equivalents.

B. INCOME TAXES:

The provision for income taxes in 1996 was generated by income from the
Partnership's subsidiary in Venezuela (a controlled foreign corporation).
Approximately $348,000 of the total tax provision is current expense, the
remaining approximately $275,000 representing deferred taxes provided on a
delayed billing, which is not taxable in 1996 under Venezuelan law.

C. NOTES PAYABLE--AFFILIATES:

The notes payable to affiliates represents two notes (each for $250,000) to
two former owners of the predecessor business. Interest accrues at a rate of
1% above the Chase Manhattan Bank rate (8.25% at December 31, 1996) and is
payable in full, along with the related principal, on July 8, 1998. The notes
are collateralized by the assets acquired by the Partnership from these two
individuals in 1993.

D. PARTNER CAPITAL:

Pursuant to the Partnership agreement, any distributions made in excess of
tax distributions are as directed by the Partnership's Executive Committee.
Class B Limited Partnership Interests are to receive a guaranteed return of
9.5% annually until the Class B partners have been redeemed completely. As of
December 31, 1996, the balance of Class B capital accounts accruing the
guaranteed return amounted to approximately $1,700,000. No other class of
partner is to receive a guaranteed return.

E. COMMITMENTS AND CONTINGENCIES:

The Company leases shop and equipment storage facilities under operating
leases with original terms of at least one year. As of December 31, 1996,
future lease payments under these noncancellable operating leases are
approximately as follows:

<TABLE>
<CAPTION>
YEARS ENDING DECEMBER 31, AMOUNT
------------------------- -------
<S> <C>
1997........................................................... $49,000
1998........................................................... 8,000
1999........................................................... 1,000
-------
$58,000
=======
</TABLE>

F-25
<PAGE>

BOOTS & COOTS, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(INFORMATION SUBSEQUENT TO DECEMBER 31, 1996 IS UNAUDITED)

Rent expense for the years ended December 31, 1995 and 1996 and the six
months ended June 30, 1996 and 1997 was approximately $6,000, $14,000, $3,000
and $6,000, respectively.

The Partnership, certain of its subsidiaries, the General Partner and others
are defendants in two lawsuits pending in Texas District Court in which the
plaintiffs assert negligence and gross negligence on the part of the
defendants in connection with the deaths of three employees while performing
well control work. Damages have not been specified in either suit. The
Partnership contends plaintiffs are only entitled to recovery under the
provisions of the Texas Worker's Compensation policy coverage in effect at the
time of the accident. Discovery is still underway and it is likely that the
cases will be consolidated for purposes of trial. The Partnership believes
that damages, if any, awarded to the plaintiffs will be substantially covered
through insurance.

The Partnership is also involved in other litigation incidental to the
conduct of its business, none of which management believes is, individually or
in the aggregate, material to the Partnership's consolidated financial
statements or results of operations.

F. MAJOR CUSTOMERS:

During 1996, approximately 90% of the Partnership's revenues were generated
by one domestic customer. These revenues were generated by the Partnership's
Venezuelan subsidiary for work performed in Venezuela. As of December 31,
1996, this customer accounted for approximately 95% of the Partnership's trade
receivables. These accounts receivable were subsequently collected under
normal credit terms and the Partnership believes that future accounts
receivable will continue to be collected under normal credit terms based on
previous experience. The Partnership performs ongoing evaluations of its
customers and generally does not require collateral. The Partnership assesses
its credit risk and provides an allowance for doubtful accounts for any
accounts which it deems doubtful of collection.

No revenue or receivable concentrations existed as of December 31, 1995 or
for the year then ended.

G. CONCENTRATION OF CREDIT RISK:

The Partnership maintains deposits in banks which may exceed the amount of
federal deposit insurance available. Management believes that any possible
deposit loss is minimal.

H. PROFIT SHARING PLAN:

The Partnership provides benefits pursuant to a profit sharing plan.
Employees are eligible for participation in the plan at semi-annual dates
immediately following one year of service and after the age of 21. The
provisions of this plan only allow for employer contributions, which are made
at the discretion of the Partnership's Advisory Committee. Employer
contributions become vested after seven years. The Partnership contributed
approximately $31,700, $31,000, $15,850 and $15,500 to this plan for the years
ended December 31, 1995 and 1996 and for the six months ended June 30, 1996
and 1997, respectively.

I. SUBSEQUENT EVENTS (UNAUDITED):

On July 1, 1997, announcement was made that the Partnership had reached an
agreement to sell all of its operating assets to IWC Services, Inc. ("IWC") an
oil and gas well control and firefighting company. This sale was closed on
July 31, 1997 with IWC: (i) paying at closing $369,000 cash to the Partnership
and placing in escrow $681,000 cash to pay certain debts of the Partnership;
(ii) issuing two promissory notes, payable September 2, 1997, to the
Partnership in the aggregate principal amount of $4,760,000; and (iii) issuing
to the Partnership a contractual right to receive $1,000,000 in common stock
of IWC. The promissory notes are secured by the acquired assets of the
Partnership, and may be extended at the option of IWC to September 15, 1997.

F-26
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To ITS Investments, Inc.:

We have audited the accompanying statement of assets to be acquired and
liabilities to be assumed of the Logistics and Supply Division of ITS
Investments, Inc. (as defined in Note 1, the Supply Division), as of March 31,
1997, and the related statements of revenues and operating expenses for each
of the two years in the period ended March 31, 1997. These statements are the
responsibility of the Supply Division's management. Our responsibility is to
express an opinion on these 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 audit to
obtain reasonable assurance about whether the statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statements. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the
statements. We believe that our audits provide a reasonable basis for our
opinion.

The statements have been prepared pursuant to the purchase agreement
described in Note 3 between ITS Supply Corporation and International Tool &
Supply Company, Inc., dated December 31, 1997, and are not intended to be a
complete presentation of the Supply Division's assets and liabilities or its
revenues and operating expenses.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the assets to be acquired and liabilities to be
assumed of the Supply Division as of March 31, 1997, and the revenues and
operating expenses of the Supply Division for each of the two years in the
period ended March 31, 1997, in conformity with generally accepted accounting
principles.

Arthur Andersen LLP

Houston, Texas
March 5, 1998 (except with respect to the matter discussed in Note 4, as to
which the date is May 27, 1998)

F-27
<PAGE>

LOGISTICS AND SUPPLY DIVISION OF ITS INVESTMENTS, INC.

STATEMENTS OF ASSETS TO BE ACQUIRED
AND LIABILITIES TO BE ASSUMED

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
ASSETS TO BE ACQUIRED 1997 1997
--------------------- ---------- ------------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and temporary cash investments................... $ 304,000 $ 69,000
Accounts receivable................................... 355,000 892,000
Inventory............................................. 795,000 1,570,000
Prepaid expenses and other............................ 236,000 140,000
---------- ----------
Total current assets................................ 1,690,000 2,672,000
PROPERTY AND EQUIPMENT, at cost:
Property and equipment................................ 538,000 927,000
Less--Accumulated depreciation and amortization..... (230,000) (340,000)
---------- ----------
308,000 587,000
OTHER ASSETS, net....................................... 10,000 26,000
---------- ----------
Total assets to be acquired....................... $2,008,000 $3,285,000
========== ==========
<CAPTION>
LIABILITIES TO BE ASSUMED
-------------------------
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable...................................... $ 798,000 $1,519,000
Accrued expenses...................................... 138,000 83,000
COMMITMENTS AND CONTINGENCIES
---------- ----------
Total liabilities to be assumed................... $ 936,000 $1,602,000
========== ==========
</TABLE>

The accompanying notes are an integral part of these statements.

F-28
<PAGE>

LOGISTICS AND SUPPLY DIVISION OF ITS INVESTMENTS, INC.

STATEMENTS OF REVENUES AND OPERATING EXPENSES

<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31, YEAR ENDED MARCH 31,
----------------------- -----------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
REVENUES..................... $34,526,000 $25,924,000 $41,817,000 $21,838,000
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Cost of sales.............. 31,512,000 24,183,000 39,246,000 19,774,000
Depreciation............... 121,000 61,000 83,000 81,000
General and administrative
expenses.................. 2,735,000 1,800,000 2,477,000 2,900,000
----------- ----------- ----------- -----------
Total operating expenses. 34,368,000 26,044,000 41,806,000 22,755,000
----------- ----------- ----------- -----------
INCOME (LOSS) FROM OPERA-
TIONS..................... $ 158,000 $ (120,000) $ 11,000 $ (917,000)
=========== =========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-29
<PAGE>

LOGISTICS AND SUPPLY DIVISION OF ITS INVESTMENTS, INC.

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 1997

1. BASIS OF PRESENTATION AND ACCOUNTING POLICIES:

Principles of Combination

The combined financial statements include certain accounts of ITS Supply &
Logistics Inc. (ISLI), ITS Venezuela S.A. (IVSA), ITS Peru S.A. (IPSA) and ITS
Supply & Logistics UK Limited (ISLUK) (collectively, "the Logistics and Supply
Division of ITS Investments, Inc.," or "the Supply Division"), all of which
are corporations that are wholly owned subsidiaries of International Tool &
Supply Company, Inc. (ITSCI) (a Delaware corporation). The accounts included
in the financial statements represent the assets to be acquired and
liabilities to be assumed, along with the related revenues and operating
expenses, which are to be acquired by ITS Supply Corporation (see Note 3). All
material intercompany balances and transactions have been eliminated in
combination.

Business

The Supply Division provides procurement and logistical services primarily
to international oil and gas companies.

Use of Estimates

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

Cash and Temporary Cash Investments

For purposes of the statement of assets to be acquired and liabilities to be
assumed, the Supply Division considers all highly liquid debt instruments
purchased with a maturity of three months or less to be temporary cash
investments.

Concentrations of Credit Risk

Financial instruments which potentially subject the Supply Division to
concentrations of credit risk consist principally of trade receivables. The
Supply Division's revenues are derived principally from uncollateralized sales
to customers in the international oil and gas industry. This industry
concentration has the potential to impact the Supply Division's exposure to
credit risk, either positively or negatively, because the customers may be
similarly affected by changes in economic or other conditions. Management of
the Supply Division believes that accounts receivable are well diversified,
thereby reducing potential credit risk to the Supply Division.

Property and Equipment

Property and equipment is carried at cost. Depreciation of assets is
computed primarily using the straight-line method with three-year to 10-year
lives. When assets are retired or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts, and any resulting gain
or loss is reflected in income for the period. The cost of maintenance and
repairs is charged to income as incurred; significant renewals and betterments
are capitalized.

Sales to Significant Customers

During the year ended March 31, 1996, sales to one of the Supply Division's
largest customers accounted for approximately 14 percent of the Supply
Division's total revenues. During the year ended March 31, 1997,

F-30
<PAGE>

LOGISTICS AND SUPPLY DIVISION OF ITS INVESTMENTS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

sales to another of the Supply Division's largest customers accounted for
approximately 54 percent of the Supply Division's total revenues.

Allocation of General and Administrative Expenses

Included in general and administrative expenses is a portion of ITSCI's
general and administrative expenses that are allocated to the Supply Division
based on its historic expense as a percentage of ITSCI's total general and
administrative expenses, as calculated using the following methods:

a. Percentage of total square footage for office rental expense.

b. Insurance policy rates on revenues and property values for insurance
expenses.

c. Volume of activities for accounting department expenses.

d. Amount of telephone usage for telephone expenses.

e. Percentage of employees for personnel department expenses.

Based on historic trends, the use of these methods resulted in the Supply
Division being responsible for an average of 58 percent of ITSCI's total
general and administrative expenses. This percentage was applied consistently
for the periods presented.

During the years ended March 31, 1997 and 1996, the Supply Division recorded
$52,000 and $137,000 in interest expense related to borrowings held by ITSCI.
As these borrowings will not be acquired in the purchase (see Note 3), the
related interest expense has not been reflected in these financial statements.

Income Taxes

The Supply Division operated as a subsidiary of ITS Investments, Inc., and
ITS plc, which filed separate federal income tax returns, including the
operations of the Supply Division, and thus the Supply Division did not file
separate tax returns for federal income taxes. Accordingly, no income tax
provision has been made in the accompanying financial statements.

Reclassifications

Certain reclassifications have been made to conform prior-year amounts to
current-year presentation.

2. RELATED-PARTY TRANSACTIONS:

The Supply Division leases office space from a company which is owned by a
shareholder and director of ITS plc, the parent company of ITSCI. The lease
expires June 30, 1999. Rent expense totaling $217,000 was paid by ITSCI for
the years ended March 31, 1997 and 1996, and was allocated to general and
administrative expenses of the Supply Division as discussed above.

3. SUBSEQUENT EVENT:

On December 31, 1997, ITSCI entered into an agreement with ITS Supply
Corporation to sell certain assets and liabilities of ISLI and all of its
ownership interest in and all of the issued and outstanding stock of IVSA,
IPSA and ISLUK. The acquired assets included inventory, tangible personal
property, real property and an intercompany receivable from IVSA to ISLI,
among others. Assets excluded from the transaction include accounts receivable
and cash of ISLI. Liabilities assumed include purchase orders for inventory
and accounts payable. Liabilities excluded primarily represent debt and
acquisition-related expenses.

F-31
<PAGE>

LOGISTICS AND SUPPLY DIVISION OF ITS INVESTMENTS, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

4. EVENTS SUBSEQUENT TO MARCH 5, 1998:

Boots & Coots International Well Control, Inc., the ultimate parent company
of the Supply Division as a result of the aforementioned acquisition (the
"Parent"), currently needs additional working capital to fund its existing
operations and to repay indebtedness in the aggregate principal amount of
$9,250,000 which comes due on or before October 1, 1998. The Parent is
continuing to offer the remaining Units in its Unit Offering through June 15,
1998, and is exploring various financing alternatives to enable it to retire
all of the outstanding Senior Notes, Additional Senior Notes, seller notes and
to finance future acquisitions by the Parent. Such financing alternatives
include: (1) consideration for the offering through private placement on a
best-efforts basis of a Convertible Preferred Stock Offering; (2) discussions
with certain commercial banks for a secured debt facility; and, (3)
discussions regarding the possible private placement of Subordinated Notes.
Although these financing efforts are in process and not yet completed,
management of the Parent believes these actions, together with cash flows from
operations, will provide adequate funding to the Parent. In the event that one
or more of these financing alternatives under consideration are not
accomplished, the Parent could be required to restructure current
indebtedness, sell assets to repay indebtedness, curtail expansion plans and
fund business activities from only internally generated funds. There can be no
assurance however, that the Parent will be successful in obtaining financing
through alternative means on acceptable terms.

F-32
<PAGE>

INDEPENDENT AUDITOR'S REPORT

Board of Directors
Code 3, Inc.

We have audited the accompanying balance sheet of Code 3, Inc. as of
December 31, 1997, and the related statements of operations, shareholders'
deficit and cash flows for the year then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Code 3, Inc. as of
December 31, 1997, and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting
principles.

HEIN + ASSOCIATES LLP

Houston, Texas
April 27, 1998

F-33
<PAGE>

CODE 3, INC.

BALANCE SHEET

DECEMBER 31, 1997

<TABLE>
<CAPTION>
ASSETS
------
<S> <C>
CURRENT ASSETS:
Cash............................................................. $ 22,000
Accounts receivable, net of allowance for doubtful accounts of
$9,000.......................................................... 1,831,000
Other receivables................................................ 12,000
Inventories...................................................... 136,000
Prepaid expenses and other current assets........................ 51,000
----------
Total current assets........................................... 2,052,000
PROPERTY AND EQUIPMENT, net........................................ 495,000
OTHER ASSETS....................................................... 23,000
----------
Total assets................................................... $2,570,000
==========
<CAPTION>
LIABILITIES AND SHAREHOLDERS' DEFICIT
-------------------------------------
<S> <C>
CURRENT LIABILITIES:
Revolving line of credit......................................... $ 350,000
Note payable to a bank........................................... 225,000
Note payable to a shareholder.................................... 50,000
Accounts payable................................................. 1,140,000
Accrued expenses................................................. 183,000
Current portion of long-term debt................................ 141,000
Taxes payable.................................................... 7,000
----------
Total current liabilities...................................... 2,096,000
LONG-TERM DEBT--net of current portion............................. 541,000
COMMITMENTS AND CONTINGENCIES (Note J)
SHAREHOLDERS' DEFICIT:
Common stock (no par; 100,000 shares authorized; 1,000 shares
issued and outstanding)......................................... 26,000
Accumulated deficit.............................................. (93,000)
----------
Total shareholders' deficit.................................... (67,000)
----------
Total liabilities and shareholders' deficit.................... $2,570,000
==========
</TABLE>

See accompanying notes to these financial statements.

F-34
<PAGE>

CODE 3, INC.

STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1997

<TABLE>
<S> <C>
REVENUES: $4,876,000
COSTS AND EXPENSES:
Operating expenses................................................ 2,066,000
General and administrative........................................ 2,563,000
Depreciation...................................................... 86,000
----------
4,715,000
----------
OPERATING INCOME.................................................... 161,000
INTEREST EXPENSE.................................................... (71,000)
OTHER INCOME........................................................ 11,000
OTHER EXPENSE....................................................... (79,000)
----------
INCOME BEFORE TAXES................................................. 22,000
INCOME TAXES........................................................ 7,000
----------
NET INCOME.......................................................... $ 15,000
==========
</TABLE>

See accompanying notes to these financial statements.

F-35
<PAGE>

CODE 3, INC.

STATEMENT OF SHAREHOLDERS' DEFICIT

YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
-------------- ACCUMULATED SHAREHOLDERS'
SHARES AMOUNT DEFICIT DEFICIT
------ ------- ----------- -------------
<S> <C> <C> <C> <C>
BALANCES, January 1, 1997.............. 1,000 $26,000 $(107,000) $(81,000)
Net income............................. -- -- 15,000 15,000
----- ------- --------- --------
BALANCES, December 31, 1997............ 1,000 $26,000 $ (92,000) $(66,000)
===== ======= ========= ========
</TABLE>

See accompanying notes to these financial statements.

F-36
<PAGE>

CODE 3, INC.

STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 1997

<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income....................................................... $ 15,000
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization................................... 86,000
Loss on sale of fixed assets.................................... 3,000
Deferred income taxes........................................... --
Changes in operating assets and liabilities, net of assets
acquired:
Receivables.................................................... (1,627,000)
Inventories and supplies....................................... (79,000)
Prepaid expenses............................................... (31,000)
Other current assets........................................... (8,000)
Other assets (not current)..................................... (21,000)
Accounts payable............................................... 941,000
Accrued liabilities............................................ 179,000
Other.......................................................... 7,000
-----------
Net cash used in operating activities......................... (535,000)
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment additions................................. (250,000)
Disposition of assets............................................ 22,000
-----------
Net cash used in investing activities......................... (228,000)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt repayments.................................................. (692,000)
Debt proceeds.................................................... 1,511,000
-----------
Net cash provided by financing activities..................... 819,000
-----------
NET INCREASE IN CASH.............................................. 55,000
CASH, beginning of year........................................... (33,000)
-----------
CASH, end of year................................................. $ 22,000
===========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for interest........................................... $ 63,000
===========
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Fixed assets acquired under shareholder notes.................... $ 50,000
===========
</TABLE>

See accompanying notes to these financial statements.

F-37
<PAGE>

CODE 3, INC.

NOTES TO FINANCIAL STATEMENTS

A. ORGANIZATION:

Code 3, Inc. (the "Company") was incorporated in Texas in 1993. The Company
provides emergency response service to contain and mitigate hazardous material
and oil spills for the chemical, manufacturing and transportation industries,
as well as state and federal agencies. The Company also specializes in the
transfer of hazardous materials and high and low pressure liquids and
industrial fire fighting. Offices are located in various cities throughout
Texas. Substantially all of the customers are located in Texas.

B. SIGNIFICANT ACCOUNTING POLICIES:

Inventories--Inventories consist primarily of equipment, parts and supplies.
Inventories are valued at the lower of cost or market. Cost is determined
using the average cost method.

Property and Equipment--Property and equipment is stated at cost.
Depreciation is provided using the straight-line method over the estimated
useful lives of the respective assets which range from 3 to 7 years.

Long-lived Assets--The Company reviews for the impairment of long-lived
assets and certain identifiable intangibles whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. An impairment loss would be recognized when estimated future cash
flows expected to result from the use of the asset and its eventual
disposition is less than its carrying amount. The Company has not identified
any such impairment losses.

Income Taxes--The Company's taxable income is included on a consolidated
return with an affiliate. For financial statement purposes, the Company
recognizes taxes as if it filed a separate return.

The Company accounts for income taxes pursuant to the liability method,
which requires recognition of deferred income tax liabilities and assets for
the expected future tax consequences of events that have been recognized in
the Company's financial statements or tax returns. Under this method, deferred
income tax liabilities and assets are determined based on the temporary
differences between the financial statement carrying amounts and the tax bases
of existing assets and liabilities and available tax carryforwards. The
Company has no significant temporary differences.

Use of Estimates--The preparation of the Company's financial statements in
conformity with generally accepted accounting principles requires the
Company's management to make estimates and assumptions that affect the amounts
reported in these financial statements and accompanying notes. Actual results
could differ from these estimates.

Recent Accounting Pronouncements--During 1997, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 130, Reporting Comprehensive Income.
SFAS No. 130 establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income is
defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures,
SFAS No. 130 requires that all items that are required to be recognized under
current accounting standards as components of comprehensive income be reported
in a financial statement that displays these items with the same prominence as
other financial statements.

F-38
<PAGE>

CODE 3, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

SFAS No. 130 is effective for financial statements presented for periods
beginning after December 15, 1997 and require comparative information for
earlier years to be restated. Because of the recent issuance of this standard,
management has been unable to fully evaluate the impact, if any, the standards
may have on the future financial statement disclosures. Results of operations
and financial position, however, will be unaffected by implementation of this
standard.

C. INVENTORIES:

Inventories consisted primarily of personal protective equipment and
absorbents, which amounted to $136,007 at December 31, 1997.

D. PROPERTY AND EQUIPMENT:

Property and equipment consisted of the following as of December 31, 1997:

<TABLE>
<S> <C>
Machinery and equipment........................................ $ 382,000
Transportation equipment....................................... 233,000
Office equipment and furnishings............................... 68,000
---------
683,000
Accumulated depreciation....................................... (188,000)
---------
Net book value............................................... $ 495,000
=========
</TABLE>

Depreciation expense for the year ended December 31, 1997 was $85,561.

E. REVOLVING LINE OF CREDIT:

At December 31, 1997, the Company had a $350,000 revolving line of credit
with a bank that expires on July 28, 1998. Interest on the unpaid principal
balance of each advance under the line was payable monthly at 11%. The line of
credit was collateralized by trade accounts receivable and equipment and was
guaranteed by the Company's president. In March, 1998, the Company paid off
this revolving line of credit in full.

F. NOTE PAYABLE TO A BANK:

At December 31, 1997, the Company had a note payable to a bank with an
outstanding principal balance of $225,000 that matured on December 31, 1997.
Interest on the note at 11% was due at maturity. The note was collateralized
by trade accounts receivable and equipment. In March, 1998, the Company paid
off this note in full.

G. NOTE PAYABLE TO A SHAREHOLDER:

At December 31, 1997, the Company had an unsecured note payable to a
shareholder of $50,000 that matures in March, 1998. The note is non interest-
bearing, and interest has been imputed at 10%.

H. PAYABLE TO A RELATED PARTY:

At December 31, 1997, the Company had an account payable due to an
affiliated entity, which is owned by two of the Company's major shareholders,
in the amount of $41,000. During the year ended December 31, 1997, the Company
paid approximately $95,000 for environmental, consulting, and engineering
services provided by this entity.

F-39
<PAGE>

CODE 3, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

At December 31, 1997, the Company had an account payable due to another
affiliated entity, which is owned by two of the Company's major shareholders,
in the amount of $3,000. During the year ended December 31, 1997, the Company
paid approximately $18,000 for environmental, consulting, and engineering
services provided by this entity.

I. LONG-TERM DEBT:

At December 31, 1997, the Company had three notes payable to finance
companies amounting to $42,000 which bore interest at rates of 9.5% to 10%.
Principal and interest was payable in monthly installments through January,
2001. The notes are collateralized by vehicles.

At December 31, 1997, the Company had a term note payable to a bank
amounting to $617,000 which bore interest at a rate of 10.5%. Principal and
interest is payable in monthly installments through July 28, 2002. The note is
collateralized by accounts receivable, inventory and equipment. Note was paid
subsequent to the Boots & Coots, Inc. acquisition.

At December 31, 1997, the Company had a term note payable to a bank
amounting to $23,000 that bore interest at a rate of 10.5%. Principal and
interest is payable in monthly installments through June, 2000. The note is
collateralized by transportation equipment. Note was paid subsequent to the
Boots & Coots, Inc. acquisition.

Annual maturities of principal on long-term debt at December 31, 1997 are as
follows:

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31, AMOUNT
------------ --------
<S> <C>
1998............................................................ $141,000
1999............................................................ 145,000
2000............................................................ 151,000
2001............................................................ 151,000
2002............................................................ 94,000
--------
$682,000
========
</TABLE>

J. COMMITMENTS AND CONTINGENCIES:

The Company leases office space, shop facilities, equipment and vehicles
under operating leases with terms in excess of one year.

At December 31, 1997, future minimum lease payments under these
noncancellable operating leases are approximately:

<TABLE>
<CAPTION>
YEARS ENDING
DECEMBER 31, AMOUNT
------------ --------
<S> <C>
1998............................................................ $213,000
1999............................................................ 188,000
2000............................................................ 100,000
2001............................................................ 51,000
2002............................................................ 45,000
Thereafter...................................................... 3,000
--------
$600,000
========
</TABLE>

F-40
<PAGE>

CODE 3, INC.

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Rent expense for the year ended December 31, 1997, was approximately
$62,000.

As part of a settlement agreement with another entity the Company is
committed to provide approximately $1,500,000 of service over the next year.

K. REVENUES FROM MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK:

During the year ended December 31, 1997, the following customers represented
significant concentrations of revenues:

<TABLE>
<S> <C>
Customer A..................................................... $1,073,000
Customer B..................................................... 785,000
Customer C..................................................... 622,000
</TABLE>

Two of the Company's customers (each in excess of 10%) collectively
accounted for 45% of outstanding accounts receivable at December 31, 1997. The
Company performs ongoing evaluations of its customers and generally does not
require collateral. The Company assesses its credit risk and provides an
allowance for doubtful accounts for any accounts which it deems doubtful of
collection.

The Company maintains deposits in banks which may exceed the amount of
federal deposit insurance available. Management believes that any possible
deposit loss is minimal.

L. OTHER EXPENSES:

Other expenses for the year ended December 31, 1997 consisted primarily of a
loss incurred on the settlement of a potential lawsuit.

M. EVENTS SUBSEQUENT TO DECEMBER 31, 1997:

In January, 1998, the Company executed a promissory note payable to the
Company's president for $150,000, payable in June, 1998.

In January, 1998, the Company acquired 200 shares of common stock from two
shareholders at a price of $2,600 per share in exchange for the assignment of
accounts receivable of the Company representing the right to receive not less
than $550,000 in total. The corporation has guaranteed the full payment of the
redemption price if 90 days thereafter the total proceeds collected from the
accounts equals less than the redemption price.

On February 20, 1998, Boots & Coots International Well Control, Inc. (the
"Parent") acquired all of the capital stock of the Company. Consideration for
the acquisition of the Company, with an effective date for audited purchase
price adjustments of December 31, 1997, was $571,000 cash; the repayment of
corporate secured debt and interest thereon of approximately $1,250,000; and
the issuance of 488,000 shares of Boots & Coots International Well Control,
Inc. common stock, of which 159,000 shares were delivered into escrow to
secure the indemnification obligations of the shareholders of the Company.

In February, 1998, the Company executed a promissory note to its Parent in
the original principal amount of $165,000. The note is a non-interest bearing
note and is payable on demand.

In March, 1998, the Company pledged all of the assets of the Company and
issued a guarantee to secure a borrowing by its parent of up to $2,250,000
from a third party lender.

F-41
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma consolidated statements of operations of
the Company for the year ended June 30, 1997, the six months ended December
31, 1997 and the three months ended March 31, 1998 (the "Unaudited Pro Forma
Consolidated Statements of Operations") give effect to (i) the acquisition of
Boots & Coots L.P., ABASCO, Inc., ITS Supply Corporation and Code 3, Inc. (the
"Acquired Entities") under the purchase method of accounting, and (ii) the
borrowing by the Company of $4,250,000 and $1,000,000 plus an estimated
$500,000 in related financing costs to finance the acquisition of ITS Supply
Corporation. The Unaudited Pro Forma Consolidated Statements of Operations
take into effect the issuance of shares of common stock under a private
placement, issuance of 12% senior subordinated debt and the related costs of
conversion into common shares and the addition of debt for the year ended June
30, 1997, the six months ended December 31, 1997 and the three months ended
March 31, 1998.

The Unaudited Pro Forma Consolidated Statements of Operations were prepared
assuming that the transactions described above were consummated as of the
beginning of each period presented.

The Unaudited Pro Forma Consolidated Statements of Operations are based upon
the historical consolidated and combined financial statements of the Company
and each of the Acquired Entities and should be read in conjunction with those
consolidated and combined financial statements and historical summary and the
notes thereto. The results of the interim periods presented are not
necessarily indicative of the results to be expected of an entire year.

The pro forma adjustments and resulting Unaudited Pro Forma Consolidated
Statements of Operations have been prepared based upon available information
and certain assumptions and estimates deemed appropriate by the Company. A
final determination of required purchase accounting adjustments, and the
allocation price to the assets acquires and liabilities has yet to be made for
the Acquired Entities. Accordingly, the purchase accounting adjustments for
the Acquired Entities reflected in the pro forma information are preliminary
and have been made solely for purposes of developing such information. The
Company's management believes, however, that the pro forma adjustments and the
underlying assumptions and estimates reasonably present the significant
effects of the transactions reflected therein and that any subsequent changes
in the underlying assumptions and estimates will not materially affect the
Consolidated Statements of Operations presented herein. The Unaudited Pro
Forma Consolidated Statements of Operations do not purport to represent what
the Company's financial position or results of operations actually would have
been had the acquisition of the Acquired Entities occurred on the dates
indicated or to project the Company's financial position or results of
operations for any future date or period. Furthermore, the Unaudited Pro Forma
Consolidated Statements of Operations do not reflect changes that may occur as
the result of post-combination activities and other matters.

F-42
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS

FOR THE YEAR ENDED JUNE 30, 1997

<TABLE>
<CAPTION>
HISTORICAL
-------------------------------------------------------------------
COMBINED
COMPANY BOOTS & COOTS ITS CODE 3 OPERATIONS
------------- ------------- ------------- ------------- -----------
TWELVE MONTHS
TWELVE MONTHS TWELVE MONTHS ENDED TWELVE MONTHS
ENDED ENDED MARCH 31, ENDED
JUNE 30, 1997 JUNE 30, 1997 1997 JUNE 30, 1997
------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Revenues......... $2,564,000 $12,314,000 $41,817,000 $2,541,000 $59,236,000
Costs and
Expenses:
Operating
expenses....... 1,460,000 6,427,000 39,246,000 1,784,000 48,917,000
General and
administrative. 1,061,000 2,889,000 2,477,000 448,000 6,875,000
Depreciation and
amortization... 111,000 699,000 83,000 106,000 999,000
---------- ----------- ----------- ---------- -----------
2,632,000 10,015,000 41,806,000 2,338,000 56,791,000
---------- ----------- ----------- ---------- -----------
Operating income
(loss).......... (68,000) 2,299,000 11,000 203,000 2,445,000
Other expenses
(income)........ 63,000 59,000 (10,000) 112,000
---------- ----------- ----------- ---------- -----------
Income (loss)
before income
taxes........... (131,000) 2,240,000 11,000 213,000 2,333,000
Income tax
expense
(benefit)....... 25,000 761,000 -- -- 786,000
---------- ----------- ----------- ---------- -----------
Net income
(loss).......... $ (156,000) $ 1,479,000 $ 11,000 $ 213,000 $ 1,547,000
========== =========== =========== ========== ===========
Net income (loss)
per share--basic
and diluted..... $ (0.01) $ 0.13
========== ===========
Weighted average
shares
outstanding..... 12,191,000 12,191,000
========== ===========
<CAPTION>
PRO FORMA
------------------------------------------------
COMBINED
ABASCO OPERATIONS
PRO FORMA PRO FORMA AND
ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS
---------------- ------------------ ------------
TWELVE MONTHS
ENDED
JUNE 30, 1997
---------------- ------------------ ------------
<S> <C> <C> <C>
Revenues......... $ 2,512,000 (a) $ -- $61,748,000
Costs and
Expenses:
Operating
expenses....... 2,075,000 (a) -- 50,992,000
General and
administrative. 606,000 (a) 167,000 (f) 7,648,000
Depreciation and
amortization... 114,000 (a) 482,000 (c) 1,595,000
---------------- ------------------ ------------
2,795,000 649,000 60,235,000
---------------- ------------------ ------------
Operating income
(loss).......... (283,000) (649,000) 1,513,000
Other expenses
(income)........ -- 1,321,000 (d)(e) 1,433,000
---------------- ------------------ ------------
Income (loss)
before income
taxes........... (283,000) (1,970,000) 80,000
Income tax
expense
(benefit)....... 9,000 (a) (767,000)(g) 28,000
---------------- ------------------ ------------
Net income
(loss).......... $ (292,000) $(1,203,000) $ 52,000
================ ================== ============
Net income (loss)
per share--basic
and diluted..... $ (0.00)
============
Weighted average
shares
outstanding..... 300,000 (j) 9,097,000 (h) 21,568,000
================ ================== ============
</TABLE>

See Accompanying Notes to These Unaudited Pro Forma Consolidated Financial
Statements.

F-43
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
HISTORICAL
--------------------------------------------------
COMBINED
COMPANY ITS CODE 3 OPERATIONS
------------ ------------ ------------ -----------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1997 1997
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Revenues......... $5,389,000 $23,505,000 $2,898,000 $31,792,000
Costs and
Expenses:
Operating
expenses....... 3,786,000 21,311,000 2,571,000 27,668,000
General and
administrative. 1,536,000 1,552,000 501,000 3,589,000
Depreciation and
amortization... 500,000 112,000 37,000 649,000
---------- ----------- ---------- -----------
5,822,000 22,975,000 3,109,000 31,906,000
---------- ----------- ---------- -----------
Operating income
(loss).......... (433,000) 530,000 (211,000) (114,000)
Loss on debt
extinguishment.. 193,000 -- -- 193,000
Other expenses... 92,000 -- 2,000 94,000
---------- ----------- ---------- -----------
Income (loss)
before income
taxes........... (718,000) 530,000 (213,000) (401,000)
Income tax
expense......... 41,000 -- -- 41,000
---------- ----------- ---------- -----------
Net income
(loss).......... $ (759,000) $ 530,000 $ (213,000) $ (442,000)
========== =========== ========== ===========
Net income (loss)
per share--basic
and diluted..... $ (0.03) $ (0.02)
========== ===========
Weighted average
shares
outstanding..... 23,864,000 23,864,000
========== ===========
<CAPTION>
PRO FORMA
--------------------------------------------------------------
BOOTS & COMBINED
COOTS L.P. ABASCO OPERATIONS
PRO FORMA PRO FORMA PRO FORMA AND
ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS ADJUSTMENTS
-------------- --------------- ------------------ ------------
PERIOD FROM PERIOD FROM
JULY 1 TO JULY 1 TO
JULY 31, SEPTEMBER 12,
1997 1997
-------------- --------------- ------------------ ------------
<S> <C> <C> <C> <C>
Revenues......... $ 216,000 (b) $ 368,000 (a) $ -- $32,376,000
Costs and
Expenses:
Operating
expenses....... 93,000 (b) 304,000 (a) -- 28,065,000
General and
administrative. 267,000 (b) 150,000 (a) 83,000 (f) 4,089,000
Depreciation and
amortization... -- -- 109,000 (c) 758,000
-------------- --------------- ------------------ ------------
360,000 454,000 192,000 32,912,000
-------------- --------------- ------------------ ------------
Operating income
(loss).......... (144,000)(b) (86,000) (192,000) (536,000)
Loss on debt
extinguishment.. -- 193,000
Other expenses... 5,000 (b) -- 816,000 (d)(e) 915,000
-------------- --------------- ------------------ ------------
Income (loss)
before income
taxes........... (149,000) (86,000) (1,008,000) (1,644,000)
Income tax
expense......... -- 2,000(a) -- 43,000
-------------- --------------- ------------------ ------------
Net income
(loss).......... $(149,000) $ (88,000) $(1,008,000) $(1,687,000)
============== =============== ================== ============
Net income (loss)
per share--basic
and diluted..... $ (0.07)
============
Weighted average
shares
outstanding..... 137, 000 (j) 488,000 (i) 24,489,000
=============== ================== ============
</TABLE>

See Accompanying Notes to These Unaudited Pro Forma Consolidated Financial
Statements

F-44
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 1998

<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------------------------- --------------------------
COMBINED
OPERATIONS
COMBINED PRO FORMA AND
COMPANY CODE 3 OPERATIONS ADJUSTMENTS ADJUSTMENTS
------------ ------------ ----------- ----------- -----------
FOR THE
THREE MONTHS PERIOD FROM
ENDED JANUARY 1 TO
MARCH 31, FEBRUARY 19,
1998 1998
------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Revenues................ $11,959,000 $1,500,000 $13,459,000 $ $13,459,000
Costs and expenses:
Operating expenses.... 8,095,000 796,000 8,891,000 8,891,000
General and
administrative....... 2,572,000 562,000 3,134,000 3,134,000
Depreciation and
amortization......... 311,000 12,000 323,000 15,000 (c) 338,000
----------- ---------- ----------- --------- -----------
10,978,000 1,370,000 12,348,000 15,000 12,363,000
----------- ---------- ----------- --------- -----------
Operating income (loss). 981,000 130,000 1,111,000 (15,000) 1,096,000
Other expenses.......... 567,000 -- 567,000 -- 567,000
----------- ---------- ----------- --------- -----------
Income (loss) before
income taxes........... 414,000 130,000 544,000 (15,000) 529,000
Income tax expense...... 258,000 44,000 302,000 (117,000)(g) 185,000
----------- ---------- ----------- --------- -----------
Net income (loss)....... $ 156,000 $ 86,000 $ 242,000 $ 102,000 $ 344,000
=========== ========== =========== ========= ===========
Net income (loss) per
share--basic and
diluted................ $ 0.01 $ 0.01 $ 0.01
=========== =========== ===========
Weighted average shares
outstanding--basic..... 30,228,000 30,228,000 276,000 (i) 30,504,000
=========== =========== ========= ===========
Weighted average shares
outstanding--diluted... 30,638,000 30,638,000 276,000 (i) 30,914,000
=========== =========== ========= ===========
</TABLE>

See Accompanying Notes to These Unaudited Pro Forma Consolidated Financial
Statements

F-45
<PAGE>

BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1997, THE SIX MONTHS ENDED
DECEMBER 31, 1997 AND THE THREE MONTHS ENDED MARCH 31, 1998

1. BASIS OF PRESENTATION

The unaudited pro forma consolidated statements of operations for the year
ended June 30, 1997, the six months ended December 31, 1997 and the three
months ended March 31, 1998 are presented as if the Boots & Coots L.P.,
Abasco, Inc., ITS Supply Corporation, and Code 3, Inc. acquisitions (the
"Acquisitions") occurred at the beginning of each period presented. The
Unaudited Pro Forma Statements of Operations may not necessarily be indicative
of the results which would actually have occurred if the Acquisitions had been
in effect on the date or for the periods indicated or which may result in the
future.

2. PRO FORMA ADJUSTMENTS

(a) ABASCO, Inc.--The adjustments represent the revenues, operating
expenses, general and administrative expenses, depreciation and federal tax
provision of the Abasco, Inc. acquisition for the periods prior to the
September 12, 1997, date of acquisition.

(b) Boots & Coots L.P.--The adjustments represent the revenues, operating
expenses, general and administrative expenses and depreciation of the Boots &
Coots L.P. acquisition for the period prior to the July 31, 1997, date of
acquisition.

(c) Amortization--The adjustments reflect the pro forma amortization expense
based on the allocation of the purchase price to goodwill for Boots & Coots
L.P., Abasco, Inc., ITS Supply Corporation, and Code 3, Inc.

(d) Interest Expense--The acquisition adjustments for interest expense
reflect the interest computed on the additional indebtedness incurred for the
ITS Supply Corporation acquisition assuming they were financed entirely with
debt. The principal amount of indebtedness incurred was approximately $6
million, including related financing costs, and the interest rate used to
calculate the interest expense on the acquisition cost financed was 10%.

(e) Interest Expense--The acquisition adjustments for interest expense
reflect the write-off of costs relating to the issuance of warrants for the
financing arrangement to purchase ITS Supply Corporation.

(f) General & Administrative Expense--The acquisition adjustment reflect one
year expense of deferred advisory fees incurred in connection with the bridge
financing incurred for the ITS Supply Corporation acquisition.

(g) Income Tax Expense (Benefit)--The adjustments reflect an effective tax
rate of 35% of pretax income.

(h) Weighted average shares outstanding--The adjustments reflect the
exchange conversion of 15,502,000 shares for the reverse acquisition into
Havenwood Ventures, Inc., the issuance of 260,000 shares for the Boots & Coots
L.P. Acquisition, the issuance of 3,867,000 shares for the conversion of the
12% senior subordinated debt, and the issuance of 488,000 shares of common
stock for the Code 3, Inc. acquisition.

(i) Weighted average shares outstanding--The adjustments reflect the
issuance of 488,000 shares of common stock for the Code 3 acquisition during
the three months ended March 31, 1998.

(j) Weighted average shares outstanding--The adjustments reflect the
issuance of 300,000 shares of common stock for the Abasco, Inc. acquisition.

F-46
<PAGE>

SCHEDULE A

SELLING SECURITY HOLDERS

<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
SHARES AMOUNT OF SHARES SHARES OWNED
NO. NAME OWNED BEING REGISTERED AFTER OFFERING(1)
--- ---- ---------- ---------------- -----------------
<C> <S> <C> <C> <C>
1 80 Shore Road Corp......... 25,000 25,000 --0--
2 A.G. Edwards & Sons, Inc.
C/F Stewart Declan Geary
IRA....................... 100,000 100,000 --0--
3 A.M.C. Ltd. Money Purchase
Pension Plan.............. 25,000 25,000 --0--
4 Anderson, Neal B........... 5,000 5,000 --0--
5 Anderson, Craig F.......... 5,000 5,000 --0--
6 Anderson, Scott L.......... 5,000 5,000 --0--
7 Anderson, Kevin W.......... 5,000 5,000 --0--
8 Martin, Karen A............ 5,000 5,000 --0--
9 Martin, III, Harlon E...... 5,000 5,000 --0--
10 Karen A. Martin, as
custodian for James A.
Martin under U.T.M.A...... 5,000 5,000 --0--
11 Karen A. Martin, as
Custodian for Jacqueline
F. Martin under U.T.M.A... 5,000 5,000 --0--
12 Craig F. Anderson, as
Custodian for Keith H.
Anderson under U.T.M.A.... 5,000 5,000 --0--
13 Craig F. Anderson, as
Custodian for C. J.
Anderson under U.T.M.A.... 5,000 5,000 --0--
14 Scott L. Anderson, as
Custodian for Scott L.
Anderson, Jr. under
U.T.M.A................... 5,000 5,000 --0--
15 Scott L. Anderson, as
Custodian for Eleanor B.
Anderson under U.T.M.A.... 5,000 5,000 --0--
16 Kevin W. Anderson, as
Custodian for Matthew W.
Anderson under U.T.M.A.... 5,000 5,000 --0--
17 Anderson, Bruce............ 168,333 168,333 --0--
18 Anderson Land, Ltd......... 66,666 66,666 --0--
19 Battenberg, Gary E. and
Barbara W................. 25,000 25,000 --0--
20 BC Consolidated, L.P. ..... 259,901 259,901 --0--
21 Beardmore, John............ 100,000 100,000 --0--
22 Beverly Family, Ltd.(3).... 386,666 286,666 100,000
23 Blocker Jr., John.......... 25,000 25,000 --0--
24 Borchert, R.V.............. 25,000 25,000 --0--
25 Bolin, George and Teresa... 33,333 33,333 --0--
26 Bova, Salvatore............ 50,000 50,000 --0--
27 Brown, Jack................ 33,333 33,333 --0--
28 C.S.L. Associates, L.P.(4). 200,000 200,000 --0--
29 Canada Trust A/C
#0581058032-121E.......... 750,000 750,000 --0--
30 Canada Trust A/C
#0582058032-221W.......... 750,000 750,000 --0--
31 Centina, Daniel............ 30,000 30,000 --0--
32 CMH Trust U/A/D 05/25/95
Jeanie L. Howells, TTEE... 5,000 5,000 --0--
33 Cofsky, Jeffrey(5)......... 26,041 26,041 --0--
34 Cone, Penni Slay........... 100,000 100,000 --0--
35 de Compiegne, Jr., Henri... 40,000 40,000 --0--
36 Delaware Charter Guarantee
& Trust Co. FBO Jeffrey J.
Puglisi SEP/IRA........... 299,000 299,000 --0--
</TABLE>

A-1
<PAGE>

<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
SHARES AMOUNT OF SHARES SHARES OWNED
NO. NAME OWNED BEING REGISTERED AFTER OFFERING(1)
--- ---- ---------- ---------------- -----------------
<C> <S> <C> <C> <C>
37 Delaware Charter Guarantee
& Trust Co. FBO Keith L.
Griffits SEP/IRA.......... 25,000 25,000 --0--
38 Delaware Charter Guarantee
& Trust Co. FBO Stephen D.
Spencer SEP/IRA........... 25,000 25,000 --0--
39 Delaware Charter Guarantee
& Trust Co. FBO Deborah D.
Dunkum IRA(6)............. 20,000 20,000 --0--
40 Delaware Charter Guarantee
& Trust Co. FBO Mark S.
Howells SEP/IRA........... 300,150 300,150 --0--
41 Delaware Charter Guarantee
& Trust Co. FBO W.G.
Dunkum, III IRA(6)........ 20,000 20,000 --0--
42 Derrick, Bruce W.(7)....... 70,000 70,000 --0--
43 Dixon, Robert C............ 50,000 50,000 --0--
44 Donald & Shelley Moorehead
Charitable Trust(3)....... 200,000 200,000 --0--
45 Dufford, A. Scott and
Dufford, Beth A........... 50,000 50,000 --0--
46 Dunkum, W.G. III & Deborah
D.(3)..................... 5,000 5,000 --0--
47 Elbaum, Steven S........... 100,000 100,000 --0--
48 Elmira Realty Management
Corp. Employee's Pension
and Profit Sharing
Plans(3).................. 15,000 15,000 --0--
49 FARMCO..................... 50,000 50,000 --0--
50 Farmers and Merchants Trust
Company Cust. FBO Craig
Langslet Rollover IRA..... 125,000 125,000 --0--
51 Ferguson, Jr., Paul F...... 223,333 223,333 --0--
52 Flak, Henry & Carmen....... 25,000 25,000 --0--
53 Founders Equity Group,
Inc.(8)................... 400,000 400,000 --0--
54 Franke, William A.(4)...... 550,000 550,000 --0--
55 Gabriel Investments Ltd.... 300,000 300,000 --0--
56 Garson, Lee A. & Garson,
Corinne B., Trustees of
the Garson Family Trust
Dated September 15, 1988.. 50,000 50,000 --0--
57 Geary, Stewart and
Kimberly.................. 66,666 66,666 --0--
58 Geneva Associates,
L.L.C.(9)................. 1,100,000 1,100,000 --0--
59 George, Larry D............ 25,000 25,000 --0--
60 Gernant, Michael & Susan... 25,000 25,000 --0--
61 Gibbs, James A............. 50,000 50,000 --0--
62 Gossen, Jr., Frederick..... 33,333 33,333 --0--
63 Grace, Hershey............. 66,666 66,666 --0--
64 Gregory Brown as Trustee
for Carson E. Brown Trust. 45,333 45,333 --0--
65 Gregory Brown as Trustee
for Kathryne T. Brown
Trust..................... 77,333 77,333 --0--
66 Gregory Brown as Trustee
for Kristin L. Brown
Trust..................... 77,333 77,333 --0--
67 Grigsby, James T........... 25,000 25,000 --0--
68 Hamilton, Wm. Arthur....... 25,000 25,000 --0--
69 Hanawa, David A. .......... 89,964 60,725 29,239
70 Harold & Beverly Rubenstein
Family Trust(3)........... 50,000 50,000 --0--
71 Harrington & Co. E.V. Fund
II Ltd.................... 75,000 75,000 --0--
72 Heartland Trust Company
TTEE for Fargo Water, Inc.
401-K K. Kleist........... 50,000 50,000 --0--
73 Henkemeyer, Gerome G., IRA. 50,000 50,000 --0--
74 Holden, Helen(2)........... 20,000 20,000 --0--
75 Holden, Helen and Jerry.... 25,000 25,000 --0--
76 Holland Holding, Inc....... 50,000 50,000 --0--
</TABLE>

A-2
<PAGE>

<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
SHARES AMOUNT OF SHARES SHARES OWNED
NO. NAME OWNED BEING REGISTERED AFTER OFFERING(1)
--- ---- --------- ---------------- -----------------
<C> <S> <C> <C> <C>
77 Holland, Terry Hunter....... 50,000 50,000 --0--
78 Howells, Jeanie L. ......... 5,000 5,000 --0--
79 Huepenbecker, Wayne......... 25,000 25,000 --0--
80 Irvine Capital Partners,
L.P.(4).................... 450,000 450,000 --0--
81 Johnson, Cederick........... 33,333 33,333 --0--
82 Johnson, Doug............... 993,333 993,333 --0--
83 JAH Trust U/A/D 05/25/95
Jeanie L. Howells, TTEE.... 5,000 5,000 --0--
84 JRH Trust U/A/D 05/25/95
Jeanie L. Howells, TTEE.... 5,000 5,000 --0--
85 JMH Trust U/A/D 05/25/95
Jeanie L. Howells, TTEE.... 5,000 5,000 --0--
86 KAH Trust U/A/D 05/25/95
Jeanie L. Howells, TTEE.... 5,000 5,000 --0--
87 Kennedy, WD................. 33,333 33,333 --0--
88 Kherkher, Steven............ 33,333 33,333 --0--
89 Krause, Brian............... 1,366,200 25,000 1,341,200
90 Kuhn, Leroy T............... 25,000 25,000 --0--
91 LaBarbera, Philip........... 140,000 140,000 --0--
92 Lake, John.................. 45,000 45,000 --0--
93 LaMont Asset Management SA.. 25,000 25,000 --0--
94 LaSalle, Cattle, Co., Ltd... 66,666 66,666 --0--
95 Lesch, Steven............... 33,333 33,333 --0--
96 Lowenthal, Malcolm P. & Joan
G. JTWROS(3)............... 10,000 10,000 --0--
97 Macey, Louis................ 25,000 25,000 --0--
98 MacLeod, Ian & Marilyn...... 50,000 50,000 --0--
99 Main Street Merchant
Partners II, L.P.(10)...... 1,400,000 1,400,000 --0--
100 Marin, Carlos M. ........... 89,964 60,725 29,239
101 Mark Howells Trust Dtd.
06/25/97 Mark S. Howells,
Trustee(11)................ 1,604,085 1,604,085 --0--
102 Marshall, Robert H.......... 50,000 50,000 --0--
103 Martin, Jr., Harlon......... 33,333 33,333 --0--
104 Massey, Randall............. 266,666 266,666 --0--
105 Massey, Scott............... 66,666 66,666 --0--
106 Massey, John H.............. 83,333 83,333 --0--
107 McCarthy, Dennis............ 200,000 200,000 --0--
108 McMahon, Ed................. 66,666 66,666 --0--
109 Miller, Jay Mark............ 25,000 25,000 --0--
110 Moore, Gary and Norma Jean.. 333,333 333,333 --0--
111 Moorehead, George O......... 100,000 100,000 --0--
112 Moorehead, Donald F......... 250,000 250,000 --0--
113 Moritz, John................ 33,333 33,333 --0--
114 Mosley, William............. 50,000 50,000 --0--
115 Naiztat, Herbert............ 25,000 25,000 --0--
116 O'Brien, Timothy J. ........ 154,104 104,020 50,084
117 Paradise Valley Securities,
Inc.(2).................... 51,000 51,000 --0--
118 Poore, James M. & Amelia E.. 50,000 50,000 --0--
119 Pritchett, Joe Pat.......... 133,333 133,333 --0--
120 Puglisi Capital Partners,
L.P.(12)................... 180,000 180,000 --0--
121 Puglisi, Jeffrey J.(11)..... 1,440,865 1,440,865 --0--
122 R. Chaney and Partners III,
L.P........................ 300,000 300,000 --0--
123 Radix Associates............ 50,000 50,000 --0--
124 Reider, Franklin............ 75,000 75,000 --0--
</TABLE>

A-3
<PAGE>

<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
SHARES AMOUNT OF SHARES SHARES OWNED
NO. NAME OWNED BEING REGISTERED AFTER OFFERING(1)
--- ---- ---------- ---------------- -----------------
<C> <S> <C> <C> <C>
125 Rhaetia Investments SA(2). 150,000 150,000 --0--
126 Richardson, Brent D....... 50,000 50,000 --0--
127 Rubenstein, Ellis(2)...... 30,000 30,000 --0--
128 Rubenstein Family Limited
Partnership.............. 150,000 150,000 --0--
129 Sacks, Seymour & Star..... 50,000 50,000 --0--
130 Schottenfeld Associates,
L.P.(12)................. 280,000 280,000 --0--
131 Schottenstein, John M.,
Revocable Trust UAD
3/26/91.................. 25,000 25,000 --0--
132 Schraub, Howard........... 25,000 25,000 --0--
133 Schulte, Vincent.......... 25,000 25,000 --0--
134 Schut, Bragi E. and Jan
H........................ 50,000 50,000 --0--
135 Schweizer, Tim............ 50,000 50,000 --0--
136 Sheinbein, Melvin M.,
Decedent's Trust......... 50,000 50,000 --0--
137 Shenkman, Aaron(7)........ 170,000 170,000 --0--
138 Shlenker, Marti B......... 66,666 66,666 --0--
139 SMH Trust U/A/D 05/25/95
Jeanie L. Howells, TTEE.. 5,000 5,000 --0--
140 Sparco Holding, Inc....... 30,000 30,000 --0--
141 Speckman, Gary R. and
Madeline Sue............. 25,000 25,000 --0--
142 Staley, Henry, Trust...... 25,000 25,000 --0--
143 Stewart Geary as Trustee
for Kyle Geary........... 33,333 33,333 --0--
144 Stewart Geary as Trustee
for Allison Geary........ 33,333 33,333 --0--
145 Stymiest, Mark............ 35,000 35,000 --0--
146 Tominaga, Scott H.(13).... 149,399 149,399 --0--
147 Turner, Jess R............ 25,000 25,000 --0--
148 Thompson, Lee T. ......... 154,104 104,020 50,084
149 Vance, Tom................ 58,333 58,333 --0--
150 VSS Co., Inc. Restated
Profit Sharing Plan &
Trust.................... 50,000 50,000 --0--
151 WES-TEX Drilling Company.. 50,000 50,000 --0--
152 Wilkes, Daniel............ 25,000 25,000 --0--
153 William M. Beard & Lee
Beard Charitable
Remainder Unitrust....... 66,666 66,666 --0--
154 Wilson, Jr., Herman T..... 100,000 100,000 --0--
---------- ---------- ---------
20,796,430 19,196,584 1,599,846
========== ========== =========
</TABLE>
- --------
(1) Assumes sale by each Selling Security Holder of all shares registered
pursuant hereto for each such Selling Security Holder's account.
(2) Represents shares of Common Stock underlying a warrant exercisable at
$1.20 per share.
(3) Represents shares of Common Stock underlying a warrant exercisable at
$5.00 per share.
(4) Includes 50,000 shares of Common Stock underlying a warrant exercisable at
$5.00 per share.
(5) Represents shares of Common Stock underlying a warrant exercisable at
$3.84 per share.
(6) Includes 5,000 shares of Common Stock underlying a warrant exercisable at
$5.00 per share.
(7) Includes 20,000 shares of Common Stock underlying a warrant exercisable at
$5.00 per share.
(8) Includes 100,000 shares of Common Stock underlying a warrant exercisable
at $1.20 per share.
(9) Includes 800,000 shares of Common Stock underlying a warrant exercisable
at $2.62 per share and 300,000 shares of Common Stock underlying a warrant
exercisable at $4.50 per share.
(10) Includes 1,200,000 shares of Common Stock underlying a warrant
exercisable at $2.62 per share and 200,000 shares of Common Stock
underlying a warrant exercisable at $4.50 per share. Assumes exercise on
a cash basis, rather than pursuant to a cashless exercise, which the
holder has indicated its desire to do but which has not been finalized.
(11) Includes 173,250 shares of Common Stock underlying a warrant exercisable
at $1.20 per share.
(12) Includes 30,000 shares of Common Stock underlying a warrant exercisable
at $5.00 per share.
(13) Includes 50,000 shares of Common Stock underlying a warrant exercisable
at $1.20 per share.

A-4
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALES REPRESENTATIVE OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PRO-
SPECTUS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY THE COMMON
STOCK BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THE INFORMA-
TION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

----------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 4
Risk Factors.............................................................. 9
Use of Proceeds........................................................... 16
Capitalization............................................................ 16
Dividend Policy........................................................... 17
Common Stock Price Information............................................ 18
Selected Financial Data................................................... 19
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 20
Business.................................................................. 23
Management................................................................ 34
Principal Shareholders.................................................... 42
Selling Security Holders.................................................. 43
Plan of Distribution...................................................... 44
Certain Transactions...................................................... 45
Description of Securities................................................. 46
Shares Available for Future Sale.......................................... 52
Transfer Agent............................................................ 52
Legal Matters............................................................. 53
Experts................................................................... 53
Financial Statements...................................................... F-1
Schedule A--List of Selling Security Holders.............................. A-1
</TABLE>

UNTIL [ ], 1998 [25 DAYS AFTER THE DATE OF THIS PROSPECTUS], ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT PARTICIPAT-
ING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIV-
ERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PRO-
SPECTUS WHEN ACTING AS AN UNDERWRITER AND WITH RESPECT TO THEIR UNSOLD ALLOT-
MENTS OR SUBSCRIPTIONS.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

19,196,584 SHARES OF
COMMON STOCK

[LOGO]
[LOGO OF BOOTS & COOTS INTERNATIONAL APPEARS HERE]

BOOTS & COOTS INTERNATIONAL
WELL CONTROL, INC.

----------------
PROSPECTUS
----------------

[ ], 1998

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered hereby. All amounts
are estimated except the Securities and Exchange Commission registration fee.

<TABLE>
<S> <C>
SEC registration fee.......................................... $33,977.96
Accounting fees and expenses.................................. $ *
Legal fees and expenses....................................... $ *
Printing and engraving expenses............................... $ *
Consulting fees and expenses.................................. $ *
Registrar and transfer agent's fees........................... $ *
Miscellaneous fees and expenses............................... $ *
----------
Total....................................................... $ *
==========
</TABLE>
- --------
* To be completed by amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

ISSUANCES IN ACQUISITIONS

Acquisition of IWC Services. In connection with the July 29, 1997,
acquisition of IWC Services, the Company issued shares of Common Stock and
options and warrants to purchase Common Stock to the eight former security
holders of IWC Services in exchange for their shares, options and warrants of
IWC Services. The Company issued, in the aggregate, 15,502,000 shares of
Common Stock of the Company; warrants to purchase up to $3,000,000 of the
Company's Common Stock; and (iii) options to purchase 1,955,000 shares of the
Company's Common Stock.

The Company relied upon Section 4(2) of the Act for the issuance of the
Common Stock and options and warrants to purchase Common Stock issued to the
former security holders of IWC Services. The Company used no general
solicitation or advertising in connection with such issuance, there were eight
persons to whom such securities were offered and issued, a number of whom were
accredited investors and the Company had reason to

II-1
<PAGE>

believe that each person to whom such securities were offered or issued did
not intend to engage in the distribution thereof and had sufficient financial
resources and knowledge and experience in financial and business matters to
satisfy the requirements of such exemption.

Acquisition of Boots & Coots. In connection with the acquisition of the
operating assets of Boots & Coots on July 31, 1997, the Company issued 259,901
shares of Common Stock to Boots & Coots, L.P., an accredited investor. The
Company relied upon Section 4(2) of the Act for the issuance of the Common
Stock to Boots & Coots. The Company used no general solicitation or
advertising in connection with such issuance, the securities were issued to a
single purchaser, and the Company had reason to believe that Boots & Coots did
not intend to engage in the distribution thereof.

Acquisition of Code 3, Inc. In connection with the acquisition of Code 3,
Inc. ("Code 3") on February 20, 1998, the Company issued an aggregate of
488,136 shares of Common Stock to the four stockholders of Code 3 in exchange
for their shares of common stock of Code 3. The Company relied upon Section
4(2) of the Act for the issuance of the Common Stock to the former security
holders of Code 3. The Company used no general solicitation or advertising in
connection with such issuance, there were a limited number of persons to whom
such securities were offered and issued, and the Company had reason to believe
that each person to whom such securities were offered or issued did not intend
to engage in the distribution thereof and had sufficient financial resources
and knowledge and experience in financial and business matters to satisfy the
requirements of such exemption.

ISSUANCES IN CAPITAL RAISING TRANSACTIONS

12% Senior Subordinated Notes. In September 1997, the Company offered the
holders of IWC Services' 12% Senior Subordinated Notes due December 31, 2000
("Subordinated Notes"), the opportunity for a thirty day period to convert
such notes into shares of Common Stock at an effective price of $0.75 per
share contingent upon the extinguishment of the warrants associated with such
notes. Of the $3,000,000 of Subordinated Notes issued, $2,900,000 was
converted into 3,866,653 shares of Common Stock of the Company. The holders of
the remaining $100,000 Subordinated Notes outstanding were issued warrants to
purchase an aggregate of 26,041 shares of Common Stock at an exercise price of
$3.84 per share in connection with the acquisition of IWC Services by the
Company.

The Company relied upon Section 4(2) of the Act for the issuance of the
Common Stock to the holders of the Subordinated Notes and the issuance of the
warrants to the remaining Subordinated Note holders. The Company used no
general solicitation or advertising in connection with such issuance, there
were a limited number of persons to whom such securities were offered and
issued, and the Company had reason to believe that each person to whom such
securities were offered or issued did not intend to engage in the distribution
thereof and had sufficient financial resources and knowledge and experience in
financial and business matters to satisfy the requirements of such exemption.

September 1997 Private Placement. In September 1997, the Company issued
7,475,000 shares of Common Stock, at a price of $1.00 per share, in a private
placement to accredited investors pursuant to Rule 506 of Regulation D under
the Act. In connection with such sale each purchaser completed documentation
from which the Company was able to determine that such exemption was
available.

In connection with such sale, the Company paid $747,500 in offering
commissions to the placement agents, as well as a nonaccountable expense
allowance of $224,000 and reimbursement of expenses of legal counsel for the
placement agents of $57,000. Additionally, the Company granted the placement
agents in such offering warrants to purchase an aggregate of 747,500 shares of
Common Stock of the Company at an exercise price of $1.20 per share. The
Company relied upon Section 4(2) of the Act for the issuance of the warrants
to the placement agents. In connection with the issuance of thereof, each
placement agent completed documentation from which the Company was able to
determine that such exemption was available.

II-2
<PAGE>

Unit Offering. Through the date hereof, the Company has issued 112,000
Units, each Unit consisting of one share of Redeemable Stock and one Warrant
representing the right to purchase five shares of Common Stock at $5.00 per
share. The Units were sold in a private placement to accredited investors
pursuant to Rule 506 of Regulation D under the Act. In connection with the
issuance of thereof, each purchaser completed documentation from which the
Company was able to determine that such exemption was available.

In connection with the sale of the Units, the Company paid $140,000 in
offering commissions to the placement agent and reimbursed the expenses of
legal counsel for the placement agents in the amount of $30,000.

Senior Notes and Additional Senior Notes. On January 2, 1998, the Company
issued 10% senior secured promissory notes due May 1, 1998 ("Senior Notes") in
the aggregate principal amount of $5,000,000 to two purchasers. In March 1998,
the Company issued additional 10% senior secured promissory notes due June 15,
1998 ("Additional Senior Notes") in the aggregate principal amount of
$2,250,000 to the same two purchasers. The Company also issued warrants to the
purchasers of the Senior Notes and Additional Senior Notes representing the
right to purchase 2,500,000 shares, in the aggregate, of Common Stock.

The Company relied upon Section 4(2) of the Act for the issuance of the
Senior Notes and Additional Senior Notes. The Company used no general
solicitation or advertising in connection with such issuance, there were a
limited number of persons to whom such securities were offered and issued, and
the Company had reason to believe that each person to whom such securities
were offered or issued did not intend to engage in the distribution thereof
and had sufficient financial resources and knowledge and experience in
financial and business matters to satisfy the requirements of such exemption.

II-3
<PAGE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits.

<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT
------- --------
<C> <S>
3.01 --Amended and Restated Certificate of Incorporation (1)
3.02 --Amendment to Certificate of Incorporation (1)
3.03 --Amended Bylaws (1)
4.01 --Specimen Certificate for the Registrant's Common Stock (1)
4.02 --Form of 12% Senior Subordinated Notes due December 31, 2000 (1)
4.03 --Form of Noteholders' Warrants to Purchase $3,000,000 of Common Stock
(1)
4.04 --Form of Employees Option to Purchase 690,000 Shares of Common Stock
(1)
4.05 --Form of Contractual Options to Purchase 1,265,000 Shares of Common
Stock (1)
4.06 --Note Purchase Agreement with Main Street/Geneva (2)
4.07 --First Amendment to Note Purchase Agreement with Main Street/Geneva
(2)
4.08 --Certificate of Designation of 10% Junior Redeemable Convertible
Preferred Stock (3)
**5.01 --Opinion of Brown, Parker & Leahy, L.L.P.
9.01 --Voting Trust Agreement between Larry H. Ramming, Raymond Henry,
Richard Hatteberg, Danny Clayton and Brian Krause (as amended) (2)
10.01 --Alliance Agreement between IWC Services, Inc. and Halliburton Energy
Services, a division of Halliburton Company (1)
10.02 --Executive Employment Agreement of Larry H. Ramming (1)
10.03 --Executive Employment Agreement of Raymond Henry (1)
10.04 --Executive Employment Agreement of Brian Krause (1)
10.05 --Executive Employment Agreement of Richard Hatteberg (1)
10.06 --Executive Employment Agreement of Danny Clayton (1)
10.07 --Security Agreement and Financing Statement with Main Street/Geneva
(2)
10.08 --First Amendment to Security Agreement (2)
10.09 --Stock Pledge Agreement with Main Street/Geneva (2)
10.10 --First Amendment to Stock Pledge Agreement (2)
10.11 --Form of Warrant issued to Main Street/Geneva (2)
10.12 --Form of Registration Rights Agreement with Main Street/Geneva (2)
10.13 --Form of First Amendment to Registration Rights Agreement (2)
10.14 --1997 Incentive Stock Plan (2)
10.15 --Outside Directors' Option Plan (2)
10.16 --Executive Compensation Plan (2)
10.17 --Halliburton Center Sublease (2)
10.18 --Camac Plaza Sublease (2)
11.01 --Computation of Per Share Earnings (2)
21.01 --List of subsidiaries (3)
*23.01 --Consent of Hein + Associates LLP
*23.02 --Consent of Arthur Andersen LLP
23.03 --Consent of Brown, Parker & Leahy, L.L.P. (included in Exhibit 5.01)
24.01 --Power of Attorney (included on Signature Page)
</TABLE>
- --------
* Filed herewith.
** To be filed by amendment.
(1) Incorporated herein by reference to the corresponding exhibit in the
Registrant's Form 8-K filed with the Commission on August 13, 1997.
(2) Incorporated herein by reference to the corresponding exhibit in the
Registrant's Report on Form 10-KSB for the six-month transition period
ended December 31, 1997 filed with the Commission on March 31, 1998.
(3) Incorporated herein by reference to the corresponding exhibit in the
Registrant's Report on Form 10-QSB for the quarter ended March 31, 1998,
filed with the Commission on May 19, 1998.

II-4
<PAGE>

ITEM 17. UNDERTAKINGS

(a) INDEMNIFICATION

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

(b) UNDERTAKINGS REQUIRED BY REGULATION S-K, ITEM 512:

The undersigned registrant hereby undertakes:

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

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

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

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

2. To treat each post-effective amendment as a new registration statement
of the securities offered, and the offering of the securities at that time
to be the initial bona fide offering.

3. To file a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.

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

5. To deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual report to
securityholders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule
14c-3 under the Securities Exchange Act of 1934; and, where interim
financial information required to be presented by Article 3 of Regulation
S-X is not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the
latest quarterly report that is specifically incorporated by reference in
the prospectus, to provide such interim financial information.

II-5
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Houston, Texas, on May 27, 1998.

Boots & Coots International Well
Control, Inc.

By: /s/ Larry H. Ramming
CHIEF EXECUTIVE OFFICER

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Larry H. Ramming and Thomas L. Easley, jointly
and severally, his attorneys-in-fact, each with the power of substitution, for
him in any and all capacities, to sign any amendments to this Registration
Statement, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<S> <C>
</TABLE>
SIGNATURE TITLE DATE

By: /s/ Larry H. Ramming Chief Executive June 1, 1998
-------------------------------- Officer and
Larry H. Ramming Director

By: /s/ Thomas L. Easley Chief Financial June 1, 1998
-------------------------------- Officer and
Thomas L. Easley Director

By: /s/ David G. Williams Controller June 1, 1998
--------------------------------
David G. Williams

By: /s/ Brian Krause President and June 1, 1998
-------------------------------- Director
Brian Krause

By: /s/ Kirk Krist Director June 1, 1998
--------------------------------
Kirk Krist

By: /s/ Doug Johnson Director June 1, 1998
--------------------------------
Doug Johnson

By: /s/ Jerry Winchester Director June 1, 1998
--------------------------------
Jerry Winchester

II-6

<PAGE>

EXHIBIT 23.01

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the use of our reports on the consolidated financial
statements of Boots & Coots International Well Control, Inc., as of December
31, 1997 and June 30, 1997, and for the years ended June 30, 1996 and 1997 and
the six months ended December 31, 1997, our reports on the financial
statements of Boots & Coots, L.P., as of December 31, 1995 and 1996 and for
the years then ended, and our report on the financial statements of Code 3,
Inc., as of and for the year ended December 31, 1997, included herein, in this
Registration Statement on Form S-1 and the reference to our Firm under the
heading "Experts".

Hein + Associates LLP

Houston, Texas
May 29, 1998

<PAGE>

EXHIBIT 23.02

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our
report on the statement of assets to be acquired and liabilities to be assumed
of the Logistics and Supply Division of ITS Investments, Inc., as of March 31,
1997 and the related statements of revenues and operating expenses for each of
the two years in the period ended March 31, 1997 (and to all references to our
Firm) included in this registration statement.

Arthur Andersen LLP

Houston, Texas
May 29, 1998