MICRO ECONOMICS INC
10-K405, 2000-03-29
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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
     For the fiscal year ended December 31, 1999

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934
     For the transition period from ------- to -------

     Commission File No. 33-55254-36

                             MICRO-ECONOMICS, INC.
             (Exact name of Registrant as specified in its charter)

       NEVADA                                           87-0485314
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                    Identification Number)

1800 E. SAHARA AVENUE, SUITE 107
LAS VEGAS, NEVADA                                         89104
(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code (801) 485-7775

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

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. [X] Yes [ ] No

Indicate by check  mark if disclosure  of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained,  to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by  reference in Part III of  this Form 10-K
or any amendment to this Form 10-K.    [X]

As of March 2000, there is no aggregate market value of the voting stock held by
non-affiliates of the registrant.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

           Class                                 Outstanding as of March, 2000
$.001 PAR VALUE CLASS A COMMON STOCK                   1,000,000 SHARES

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None


<PAGE>



                                     PART I
ITEM 1.  Business.

         On July 31, 1998,  control of the Company  reverted  back to its former
controlling  shareholders,  Krista Nielson and Capital General Corporation1,  by
reason of the failure of the purchasers of the former controlling  shareholders'
stock to complete the terms of the oral purchase  agreement of January 10, 1996.
After  the  resignation  of Krista  Nielson  and David  Yeaman as  officers  and
directors  of the Company on January 10, 1996 to complete  the change in control
of the  Company  in  connection  with the sale of  760,000  shares of the former
controlling  shareholders'  common stock in the Company, new management reported
said sale of stock and  change in control on Form 8-K dated  January  10,  1996.
They did not mention in said report,  however, or in subsequent reporting,  that
the transaction  was not complete,  that the stock had not been delivered to the
purchasers  and would not be unless  payment for the stock had been made in full
to the former controlling shareholders within the time allowed by the agreement,
or that under the terms of the agreement  failure to timely complete payment for
the stock  would  result in total  loss of their  purchase  rights to the stock.
Thereafter said purchasers  defaulted on their payments for the stock,  and as a
result the former  controlling  shareholders have not delivered the stock to the
said  purchasers  but  have  terminated  the  agreement  with  them and held new
elections for officers and directors.

         Further, on July 31, 1998, the Company canceled 20,000 shares issued to
CIFC  Investment Pty. Ltd., an Australian  company,  for the reason that current
management, after investigation, has been unable to verify that payment for said
shares was actually made to the Company. Current management believes that either
payment was not made or that if it was, it was  thereafter  withdrawn.  Recently
the Company  engaged legal counsel in Sydney,  Australia  (where the Company was
based prior to the former  controlling  shareholders  terminating  the  purchase
agreement  because of the  purchasers'  default,  as described  above) to search
various public records there for liens,  judgments,  registrations,  deeds, etc.
that existed which involved the Company, and none were found. Based on such, and
also  because the Company has been unable to locate any  officers of the Company
during the January 1996 to July 1998 period,  current  management  believes that
the  Company had no activity or  transactions  during the period  following  the
January 10, 1996 agreement and that the 20,000 share CIFC Investment Pty., Ltd.,
transaction was never completed. Hence the shares have been canceled.

         The  Company  was  incorporated  under  the laws of Nevada on March 14,
1990. The Company is in the developmental stage, and its operations to date have
been limited to the sale of shares to Capital General  Corporation and the gifts
of shares  to the  giftees.  The  Company  is in the  process  of  investigating
potential business ventures which, in the opinion of management,  will provide a
source of eventual profit to the Company.  Such involvement may take many forms,
including the  acquisition of an existing  business or the acquisition of assets
to establish subsidiary businesses.  The Company's management does not expect to
remain involved as management of an acquired  business;  presently  unidentified
individuals would be retained for such purposes.

         As an unfunded venture, the Company will be  extremely  limited  in its
attempts to locate potential business  situations for  investigation.   However,
the Company's officers, directors and major shareholder have undertaken  to make
loans to the Company in amounts sufficient to enable it to satisfy its reporting
and other obligations as a public  company, and to commence, on a limited basis,
the process of  investigating  possible merger  and acquisition  candidates, and
believe that the Company's  status as a  publicly-held corporation  will enhance
its ability to locate such potential business ventures.
- --------------------------
         1The other former controlling shareholder, David R. Yeaman, transferred
all his rights in the stock of the  Company to Capital  General  Corporation  on
December 31, 1996.

                                        1

<PAGE>

         No  assurance  can be given as to when the Company may locate  suitable
business  opportunities  and such  opportunities  may be  difficult  to  locate;
however,  the Company intends to actively search for potential business ventures
for the next five years.  The Company intends not to allocate any incoming funds
specifically,  should there be any in the future, to general use for the purpose
of  seeking,  investigating  and  acquiring  or  becoming  engaged in a business
opportunity.  Decisions  concerning  these  matters  may be made  by  management
without the participation or authorization of the shareholders.

         Management  anticipates  that due to its lack of funds, and the limited
amount of its resources,  the Company may be restricted to participation in only
one  potential  business  venture.  This  lack  of  diversification   should  be
considered a  substantial  risk because it will not permit the Company to offset
potential losses from one venture against gains from another.

         Business opportunities,  if any arise, are expected to become available
to the  Company  principally  from the  personal  contacts of its  officers  and
directors.  While it is not expected  that the Company will engage  professional
firms specializing in business  acquisitions or reorganizations,  such firms may
be  retained  if funds  become  available  in the  future,  and if  deemed to be
advisable.  Opportunities may thus become available from professional  advisers,
securities  broker-dealers,   venture  capitalists,  members  of  the  financial
community, and other sources of unsolicited proposals. In certain circumstances,
the  Company  may agree to pay a  finder's  fee or other  form of  compensation,
including  perhaps  one-time cash payments,  payments based upon a percentage of
revenues or sales volume,  and/or payments involving the issuance of securities,
for services provided by persons who submit a business  opportunity in which the
Company shall decide to  participate,  although no contracts or  arrangements of
this nature  presently  exist. The Company is unable to predict at this time the
costs of locating a suitable business opportunity.

         The Company will not restrict  its search to any  particular  business,
industry or  geographical  location,  and  reserves the right to evaluate and to
enter into any type of  business  opportunity,  in any stage of its  development
(including  the  "start  up"  stage),  in any  location.  In  seeking a business
venture,  Management  will not be  influenced  primarily  by an  attempt to take
advantage  of the  anticipated  or  perceived  appeal  of a  specific  industry,
management  group,  or product or industry,  but rather will be motivated by the
Company's  business  objective of seeking long term capital  appreciation in its
real value.  In addition,  the Exchange Act reporting  requirements  require the
filing of the Form 8-K disclosing any businesses acquired and requires certified
financial  statements  of  such  companies.  These  reporting  requirements  may
substantially   limit  the  businesses  which  may  be  available  for  possible
acquisition candidates.

         The analysis of business  opportunities  will be undertaken by or under
the  supervision  of the Company's  management,  none of whom is a  professional
analyst and none of whom have significant general business experience. Among the
factors  which  management  will  consider  in  analyzing   potential   business
opportunities are the available technical,  financial and managerial  resources;
working capital and financial  requirements;  the history of operation,  if any;
future prospects; the nature of present and anticipated  competition;  potential
for  further  research,   development  or  exploration;   growth  and  expansion
potential;  profit potential;  the perceived public recognition or acceptance of
products or services; name identification, and other relevant factors.

         It is not  possible at present to predict the exact manner in which the
Company  may   participate  in  a  business   opportunity.   Specific   business
opportunities  will be reviewed  and,  based upon such review,  the  appropriate
legal structure or method of  participation  will be decided upon by management.
Such structures and methods may include,  without limitation,  leases,  purchase
and  sale  agreements,  license,  joint  ventures;   and  may   involve  merger,

                                        2

<PAGE>

consolidation  or  reorganization.  The Company may act  directly or  indirectly
through an interest in a partnership, corporation or other form of organization.
However,  it is most likely that the Company will acquire a business  venture by
conducting a reorganization  involving the issuance of the Company's  restricted
securities.  Such a reorganization may involve a merger (or combination pursuant
to state corporate statutes,  where one of the entities dissolves or is absorbed
by the other), or it may occur as a consolidation,  where a new entity is formed
and the  Company  and such other  entity  combine  assets in the new  entity.  A
reorganization may also occur, directly or indirectly, through subsidiaries, and
there is no assurance that the Company would be the surviving  entity.  Any such
reorganization  could  result in  additional  dilution  to the book value of the
shares and loss of control of a majority of the shares.  The  Company's  present
directors may be required to resign in connection with a reorganization.

         A  reorganization  may be structured in such a way as to take advantage
of certain beneficial tax consequences available in business reorganizations, in
accordance  with  provisions of the Internal  Revenue Code of 1986 (as amended).
Pursuant  to  such  a  structure,  the  number  of  shares  held  prior  to  the
reorganization  by all of the Company's  shareholders  might be less than 20% of
the  total  shares  to be  outstanding  upon  completion  of the  trans  action.
Substantial   dilution  of  percentage   equity  ownership  may  result  to  the
shareholders, in the discretion of management.

         Generally,  the issuance of securities in a reorganization  transaction
would  be  undertaken  in  reliance  upon  one  or  more   exemptions  from  the
registration  provisions of applicable  federal  securities laws,  including the
exemptions  provided  for  non-public  or limited  offerings,  distributions  to
persons resident in only one state and similar exemptions provided by state law.
Shares issued in a reorganization  transaction based upon these exemptions would
be  considered  "restricted"  securities  under the 1933  Act,  and would not be
available  for  resale  for a period of one year,  in  accordance  with Rule 144
promulgated  under  the 1933 Act.  However,  the  Company  might  undertake,  in
connection  with  such  a  reorganization   transaction,   certain  registration
obligations in connection with such securities.

         The  Company  may  choose  to  enter  into  a  venture   involving  the
acquisition  of or  merger  with a  company  which  does  not  need  substantial
additional  capital but desires to  establish  a public  trading  market for its
securities.  Such a company may desire to consolidate  its  operations  with the
Company  through  a  merger,   reorganization,   asset  acquisition,   or  other
combination,  in order to avoid possible adverse consequences of undertaking its
own public offering.  (Such consequences  might include expense,  time delays or
loss of  voting  control.)  In the event of such a merger,  the  Company  may be
required to issue significant  additional shares, and it may be anticipated that
control over the Company's  affairs may be transferred to others. It should also
be noted that this type of business  venture  might have the effect of depriving
the  shareholders of the protection of federal and state  securities laws, which
normally affect the process of a company becoming publicly held.

         It  is  likely  that  the   investigation  and  selection  of  business
opportunities  will be complex,  time-consuming  and extremely  risky.  However,
management believes that even though the Company will have limited capital,  the
fact  that  its  securities  will be  publicly-held  will  make it a  reasonably
attractive business prospect for other firms.

         As  part of  their  investigation  of  acquisition  possibilities,  the
Company's  management may meet with  executive  officers of the business and its
personnel;  inspect its facilities;  obtain independent analysis or verification
of the  information  provided,  and conduct other  reasonable  measures,  to the
extent permitted by the Company's  limited  resources and  management's  limited
expertise.  Generally,  the Company  intends to analyze and make a determination
based upon all available  information without reliance upon any single factor as
controlling.


                                        3

<PAGE>

         In all likelihood,  the Company's  management will be  inexperienced in
the areas in which potential  businesses  will be investigated  and in which the
Company may make an acquisition or investment. Thus, it may become necessary for
the  Company  to retain  consultants  or  outside  professional  firms to assist
management in evaluating potential  investments,  and to hire managers to run or
oversee the operations of its acquisitions or investments.  The Company can give
no assurance that it will be able to find suitable consultants or managers.  The
Company  intends not to employ any of its  affiliates,  officers,  directors  or
principal  shareholders as consultants.  The Company has no policy regarding the
use of consultants,  however, if management, in its discretion,  determines that
it is in the best interests of the Company,  management may seek  consultants to
review  potential merger or acquisition  candidates.  It is anticipated that the
total  amount of fees paid to any  consultant  would not  exceed  $5,000.00  per
transaction.  The  fee,  it is  anticipated,  would be paid by  Capital  General
Corporation or by the potential target company. There are currently no contracts
or agreements  between any  consultant  and any companies that are searching for
"shell"  companies  with  which  to  merge.   There  have  been  no  preliminary
discussions or understandings between the Company and any market maker regarding
the  participation of any such market maker in the aftermarket for the Company's
securities  inasmuch as no market for the securities is expected to arise due to
the lack of transferability of the Company's shares until an acquisition is made
and a Form 8-K is filed with the Commission.

         It may be  anticipated  that the  investigation  of  specific  business
opportunities   and  the   negotiation,   drafting  and  execution  of  relevant
agreements,  disclosure documents and other instruments will require substantial
management time and attention, and substantial costs for accountants,  attorneys
and  others.  Should  a  decision  thereafter  be made not to  participate  in a
specific  business  opportunity,  it is likely that costs already expended would
not be  recoverable.  It is  also  likely,  in the  event a  transaction  should
eventually  fail to be consummated,  for any reason,  that the costs incurred by
the Company would not be recoverable.  The Company's  officers and directors are
entitled to reimbursement  for all expenses  incurred in their  investigation of
possible  business  ventures on behalf of the Company,  and no assurance  can be
given that if the Company has available  funds they will not be depleted in such
expenses.

         In addition to the severe limitations placed upon the Company by virtue
of its unfunded status,  the Company will also be limited,  in its investigation
of  possible  acquisitions,  by the  reporting  requirements  of the  Securities
Exchange Act of 1934, pursuant to which certain information must be furnished in
connection with any significant  acquisitions.  The Company would be required to
furnish,  with  respect  to any  significant  acquisition,  certified  financial
statements for the acquired company, covering one, two or three years (depending
upon the relative size of the acquisition).  Consequently, acquisition prospects
which do not have the requisite certified financial statements, or are unable to
obtain them, may be inappropriate  for acquisition  under the present  reporting
requirements of the 1934 Act.

         The Company does not intend to take any action which would render it an
investment company under The Investment  Companies Act of 1940 (the "1940 Act").
The 1940 Act defines an investment  company as one which (1) invests,  reinvests
or  trades  in  securities  as its  primary  business,  (2)  issues  face-amount
certificates of the installment type or (3) invests,  reinvests,  owns, holds or
trades  securities  or owns or  acquires  investment  securities  having a value
exceeding 40 percent of the value of its total assets  (exclusive  of Government
securities  and cash  items) on an  unconsolidated  basis.  The above 40 percent
limitation may be exceeded so long as a company is primarily  engaged,  directly
or through  wholly-owned  subsidiaries,  in a business or businesses  other than
that of investing,  reinvesting,  owning,  holding or trading in  securities.  A
wholly-owned  subsidiary  is  defined  as one which is at least 96% owned by the
company.

         Neither the Company nor any of its officers or directors are registered
as investment advisers under the Investment Advisers Act of 1940 (the  "Advisers

                                        4

<PAGE>

Act"),  and  so  there is no  authority to  pursue any  course  of  business  or
activities  which  would  render  the  Company  or  its  management  "investment
advisers" as defined in the Advisers Act.  Management believes that registration
under the Advisers Act is not required and that certain exemptions are available
including the exemptions for  persons who may render advice to a limited  number
of other persons and who may advise other persons located in one state only.

         The Company expects to encounter intense  competition in its efforts to
locate  suitable  business   opportunities  in  which  to  engage.  The  primary
competition  for  desirable  investments  may come from  other  small  companies
organized  and funded for  similar  purposes,  from small  business  development
corporations and from public and private venture capital  organizations.  As the
Company  will be  completely  unfunded,  it can  fairly  be said that all of the
competing  entities  will  have  significantly  greater  experience,  resources,
facilities,  contacts  and  managerial  expertise  than the  Company  and  will,
consequently,  be in a better position than the Company to obtain access to, and
to engage in, business opportunities.  Due to its lack of funds, the Company may
not be in a position to compete  with larger and more  experienced  entities for
business  opportunities which are low-risk.  Business opportunities in which the
Company may ultimately  participate  are likely to be highly risky and extremely
speculative.

ITEM 2.  Properties.

         The Company owns no properties and utilizes space on a rent-free  basis
in the office of its principal  shareholder,  Capital General Corporation.  This
arrangement  is  expected to  continue  until such time as the  Company  becomes
involved in a business venture which necessitates its relocation, as to which no
assurances  can be given.  The Company  has no  agreements  with  respect to the
maintenance or future acquisition of office facilities, however, if a successful
merger/acquisition  is  negotiated,  it is  anticipated  that the  office of the
Company will be moved to that of the acquired company.

ITEM 3.  Legal Proceedings.

         On January 7, 1994, the Bureau of Securities of the State of New Jersey
filed a complaint in the matter of Capital General Corporation,  David R. Yeaman
(former  officer and  director of the  Company)  and 74 other named  defendants,
Nevada and Utah  corporations  including the Company,  which complaint  proposes
that civil monetary  penalties  totaling  $30,000.00 be assessed against Capital
General Corporation for alleged violations of the Uniform Securities Law (1977),
N.J.S.A.  49:3-47 et. seq.  by (1)  selling to 24 New Jersey  residents  between
April 1986 and May 1991, securities in 25 of the 74 above referred to respondent
corporations  named in the  proceeding,  not including  the Company,  which were
neither  registered  nor  exempt  from  registration,   and  (2)  making  untrue
statements of material fact and omitting to state  material  facts in connection
with  said  New  Jersey  sales  in  6 of  the  74  above  referred  to  resident
corporations named in the proceeding, not including the Company. Also on January
7,  1994,  the  Bureau  of  Securities  of the  State  of New  Jersey,  based on
substantially similar allegations as in the above referred complaint, issued its
Order Denying  Exemptions and to Cease and Desist.  This order summarily  denied
the exemptions  contained in N.J.S.A.  49:3-50(b),  (1), (2), (3), (9), (11) and
(12) of  the  securities  of  Capital  General  Corporation  and  the  other  74
respondent  corporations,  including the Company, except that excluded  from the
summary denial of  the exemption  contained in  N.J.S.A.  49-3-50(b)(12)  is the
Offer of  Rescission  by  Capital General Corporation to 24 New Jersey residents
pursuant to the offer of rescission which began about April 28, 1993. This order
also ordered Capital General  Corporation  and David Yeaman  to Cease and Desist
from offering or selling any securities in blind pool corporations into, or from
the State of New Jersey.

         Capital  General and David  Yeaman filed  answers  denying the material
allegations  of said  complaint  and  resisting  the  imposition  of said  civil
monetary  penalties,  and the said  Order  Denying  Exemptions  and to Cease and
Desist.  Subsequently the issues raised in said complaint and order were settled
by agreement  between the said Bureau of  Securities  and Mr. Yeaman and Capital
General  Corporation  in a consent  order dated July 11, 1994 and approved by an
administrative law judge of the State of New Jersey Office of Administrative Law
September  2, 1994.  Under the terms of said  consent  order,  all claims in the
complaint  against all named  respondents  were settled by the payment of $3,000
civil penalty, and the order was modified so that it does not apply to 27 of the
respondent companies; however said order does still apply to the Company.

See also Item 10 regarding legal proceedings against officers and directors.

                                       5

<PAGE>

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

         No matter was  submitted to the Company's  security  holders for a vote
during the fiscal year ending December 31, 1999.

                                     PART II

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

         There  currently is not a trading  market for the  Company's  $.001 par
value common stock nor has there been a trading  market for the Company's  stock
since its inception.

         As of March 2000, there were 379 record holders of the Company's common
stock.  The Company has not  previously  declared or paid any  dividends  on its
common stock and does not anticipate  declaring any dividends in the foreseeable
future.

ITEM 6.  Selected Financial Data.
<TABLE>
<CAPTION>
                              MICRO-ECONOMICS, INC.
                              SUMMARY OF OPERATIONS
                                  DECEMBER 1999

                               1999              1998             1997            1996             1995
                               ----              ----             ----            ----             ----
<S>                            <C>               <C>              <C>             <C>              <C>
Total Assets.............         0                 0                0               0                0
Revenues.................         0                 0                0               0                0
Operating Expenses.......         0                 0               39             627                0
  Net Earnings (Loss)....         0                 0              (39)           (627)               0
Per Share Data
  Earnings (Loss).......          0                 0                0               0                0
Average Common Shares
  Outstanding.....             1,000,000         1,000,000        1,000,000        1,000,000        1,000,000

</TABLE>

ITEM 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operation.

         The  Company  has had no  operational  history and has yet to engage in
business of any kind.  All risks inherent in new and  inexperienced  enterprises
are inherent in the Company's business.  The Company has not made a formal study
of the economic potential of any business.  At the present,  the Company has not
identified any assets or business opportunities for acquisition.

         As of  March, 2000,  the  Company  has no  liquidity  and no  presently
available capital resources, such as credit lines, guarantees, etc. and should a
merger or acquisition prove unsuccessful, it is possible that the Company may be
dissolved by the State of Nevada for failing to file reports, at which point the
Company  would no longer be a viable  corporation  under Nevada law and would be
unable to function as a legal entity.  Should  management  decide not to further
pursue its acquisition activities, management may abandon its activities and the
shares of the Company would become worthless.  However,  the Company's officers,
directors and major shareholder,  have made an oral undertaking to make loans to

                                       6

<PAGE>

the  Company  in  amounts  sufficient  to enable  it to  satisfy  its  reporting
requirements and other obligations  incumbent on it as a public company,  and to
commence,  on a limited basis, the process of investigating  possible merger and
acquisition candidates.  The Company's status as a publicly-held corporation may
enhance its ability to locate  potential  business  ventures.  The loans will be
interest  free and are  intended to be repaid at a future  date,  if or when the
Company shall have received  sufficient funds through any business  acquisition.
The loans are intended to provide for the payment of filing  fees,  professional
fees, printing and copying fees and other miscellaneous fees.

         Based  on  current  economic  and  regulatory  conditions,   management
believes that it is possible,  if not probable,  for a company like the Company,
without assets or many liabilities,  to negotiate a merger or acquisition with a
viable private company.  The opportunity arises principally  because of the high
legal  and  accounting   fees  and  the  length  of  time  associated  with  the
registration process of "going public".  However, should any of these conditions
change,  it is very possible that there would be little or no economic value for
anyone taking over control of the Company.

         Since the Company is not engaged in any business or other operations at
the  present  time,  management  has  determined  that Year 2000 issues will not
materially affect the Company. In addition,  the Company does not own, lease, or
operate any computers, and it doesn't rely on information,  processes, accounts,
or  anything  generated  from others by  computers.  The Company has no business
relations with other persons or entities whose  potential year 2000 issues could
have any effect on the Company.  The Company  did not experience any problems or
difficulties coming into the year 2000.

ITEM 7A.  Quantitative and Qualitative Disclosures About Market Risk.

         The  Company has no market risk  sensitive  instruments  or market risk
exposures.

ITEM 8.  Financial Statements and Supplementary Data.

         See Item 14.

ITEM 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure.

         Not Applicable.

                                    PART III

ITEM 10.  Directors and Executive Officers of the Registrant.

         The following table shows the positions held by the Company's  officers
and directors. The directors were appointed and will serve until the next annual
meeting of the  Company's  stockholders,  and until their  successors  have been
elected and have qualified.  The officers were appointed to their positions, and
continue in such positions, at the discretion of the directors.

Name                               Age      Position
Krista Nielson                     37       President, Director

Sasha Belliston                    27       Secretary/Treasurer, Director

                                       7
<PAGE>

         KRISTA  NIELSON,  has been  Director of the Company since July 1998. In
addition to her management position with the Company, she has been since 1986 an
officer and director of Capital  General  Corporation,  a  Utah-based  financial
consulting  firm,  and has been  involved in the  organization  and promotion of
various shell  companies.  Ms. Nielson received a Business degree from Salt Lake
Community  College  in 1987.  She serves as an officer  and/or  director  in the
following  private   corporations:   Yeaman  Enterprises,   Inc.  and  Universal
Associates,  Inc., family holding  companies,  Four Star Ranch, Inc., a farmland
development company,  Visual Impact Corporation and Horizon  Development,  Inc.,
financial  consulting  companies.  Ms. Nielson devotes her time primarily to her
role as President of Capital General and to the financial consulting  activities
in which Capital General engages.

         SASHA BELLISTON,  has been Director of the Company since July 1998, and
in addition  to her  management  position  with the  Company,  she has been Vice
President of Capital  General since April, 1997 and Secretary of Capital General
since May, 1999.  For the past five years,  Ms.  Belliston  has devoted her time
primarily as a cosmetologist and homemaker.  Ms. Belliston  serves as an officer
and/or  director  in  the  following  private corporations:  Yeaman Enterprises,
Inc. and Universal Associates,  Inc., family holding companies, Four Star Ranch,
Inc., a farmland development  company,  Argon Financial  Corporation  and Public
Financial  Corporation,  investment companies.  Ms. Belliston dedicates her time
primarily to her role as President of Four Star Ranch and the farming activities
in which Four Star Ranch engages.

         The management of Capital  General is  essentially  the same as that of
the Company and, as the Company's  largest  shareholder,  Capital General exerts
considerable influence in the election of the Company's  officers and directors.
Capital General  is a private  venture capital  and financial  consulting  firm,
incorporated  in  Utah  in  1971.  Capital  General is not an investment company
under The Investment Companies Act of 1940.  Capital General is owned by  Yeaman
Enterprises,  Inc.,  a private corporation which is, in turn, owned by the adult
children  of the  family of David R. Yeaman (formerly an officer and director of
the Company, Capital General and Yeaman Enterprises, Inc.). Sasha Belliston, Mr.
Yeaman's  daughter, is the principal shareholder of Yeaman Enterprises;   Krista
Nielson is also an officer and director of Yeaman Enterprises, Inc.

         Management of the Company have, in their various  capacities at Capital
General over the past ten years,  assisted in the  organization of approximately
75  corporations  similar  to  the  Company  which  are  in  varying  stages  of
development  and   approximately  70  of  such  corporations  have  completed  a
merger/acquisition  transaction.  In merger/acquisition  transactions similar to
those  contemplated by the Company,  present management would be replaced by new
management and additional shares would be issued in consideration for the assets
being  transferred  into the Company.  Present  management  does not  anticipate
operating  the  business  of  the  Company  subsequent  to any  acquisition  and
therefore the future  success of the Company will be primarily  dependent on new
management which is now unknown.

         None of the above directors of the Company is a director of any company
subject to the  requirements  of Section  15(d) of the Exchange Act. None of the
directors  are  directors  or  officers  of any  other  company  with a class of
securities  registered  pursuant  to  Section  12 of  the  Exchange  Act  or the
requirements  of  Section  15(d) of such  Act or any  company  registered  as an
investment company under the Investment Company Act of 1940.

          On August 2, 1999,  the Securities  and Exchange Commission entered an
ORDER  INSTITUTING   PUBLIC   ADMINISTRATIVE  AND  CEASE-AND-DESIST  PROCEEDINGS
PURSUANT TO SECTION  8A OF  THE SECURITIES ACT OF 1933 AND SECTIONS 17A(c)(3)(A)
AND  17A(c)(4)(C)  OF THE  SECURITIES  EXCHANGE  ACT  OF 1934,  In the matter of
NATIONAL STOCK  TRANSFER, INC.,  KRISTA CASTLETON  NIELSEN and  ROGER LEE GREER,
Respondents,  Administrative Proceeding File No. 3-9949.  In this proceeding the
Commission's Division  of Enforcement has alleged that Krista Nielson, president
and director of the Company, in June of 1995 while she was president of National
Stock Transfer, Inc.,  willfully  aided and abetted Robert G. Weeks and PanWorld
Minerals International, Inc. in  committing violations of Sections 5(a) and 5(c)

                                       8
<PAGE>

of  the  Securities  Act  of  1933  by  causing  National  Stock Transfer, Inc.,
PanWorld's transfer agent, to issue free-trading shares of  PanWorld to a United
States  resident  contrary  to  Regulation S,  National  Stock  Transfer, Inc.'s
operating  procedures, and advice of counsel. Ms. Nielson filed a written answer
denying the above  allegations.  A hearing has been set at Commission Offices in
Salt Lake City,  Utah on  May 24,  2000 to  determine  if the allegations of the
Division of Enforcement are true and if so whether Respondents should be ordered
to cease and desist  from causing  violations of the  aforementioned sections of
the Securities Act,  whether money  penalties should be assessed, and what other
remedies may be appropriate.

         In 1997 in the United States District Court for the Eastern District of
Pennsylvania, a former officer and director of the Company, David R. Yeaman, was
convicted of  conspiracy,  wire fraud and  securities  fraud and sentenced to 14
months imprisonment,  fined $20,000.00,  and subjected to supervised release for
three years  following  the prison term during  which time he is required to not
commit another crime, not engage in the securities and insurance industries, and
various  other  standard  conditions of  supervised  release.  After serving ten
months of the prison  term he was  transferred  on January 8, 1999 to a half way
house in Salt Lake City, Utah and he thereafter was released March 5, 1999.   In
the interim the government successfully appealed his sentence and fine, and as a
result he  is scheduled to be resentenced on April 10, 2000, at which time it is
expected  that  the  government will  urge the court to impose additional prison
time, a higher fine and restitution.

         The U.S.  Securities  and Exchange  Commission,  Securities Act of 1933
Release No. 7008 and Securities Exchange Act of 1934 Release No. 32669 announced
that  on July  23,  1993,  it  ordered  David  R.  Yeaman  and  Capital  General
Corporation to permanently  cease and desist from  committing or causing further
violations of Section 5(a) and (c) and 17(a) of the  Securities  Act of 1933 and
Sections 10(b) and 13(g) of the Securities Exchange Act of 1934 and Rules 10b-5,
12b-20 and 13d-1(c) thereunder.

         Krista  Nielson  was  ordered  to  permanently  cease and  desist  from
committing or causing further  violations of Section 17(a) of the Securities Act
and Section 10(b) of the Exchange Act and Rules 10b-5 and 12b-20 thereunder.  In
addition,  the  Commission  ordered the  revocation of the  registration  of the
common  stock of Altara  International,  Inc.,  Arrow  Management,  Inc.,  Atlas
Equity, Inc., Dynamic Associates,  Inc., Energy Systems,  Inc., Four Star Ranch,
Inc., Panorama Industries,  Inc., Partisan Corporation,  Quiescent  Corporation,
Saber, Inc., Upsilon,  Inc., Vicuna, Inc., Why Not?, Inc., Xebec Galleon,  Inc.,
Zebu, Inc., and Zeus Enterprises, Inc. pursuant to Section 12(j) of the Exchange
Act.  The  Commission  found that each of the issuers  had filed a  registration
statement on Form 10 that contained  materially false and misleading  statements
in violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

         Each of the respondents had submitted an Offer of Settlement consenting
to the entry of the Order without  admitting or denying the  allegations  in the
Order. Prior to the submission of the Offers of Settlement,  Capital General, on
behalf of the above mentioned companies,  except for Panorama Industries,  Inc.,
filed a registration  statement on Form S-1 during  December of 1992 to register
the  common  stock  of  those  companies  under  the  Securities  Act  of  1933.
Concurrently  with the  signing of the Offers of  Settlement,  the  Registration
Statement was declared  effective on June 30, 1993. A Post  Effective  Amendment
was filed and declared effective September 2, 1993. Although the registration of
the common  stock  under  Section  12(g) of the 1934 Act was revoked on July 23,
1993, the companies are now registered and reporting under the Securities Act of
1933 by virtue of the filing of Form S-1 as  indicated  by  Commission  File No.
33-55254.

         During 1986 and 1987,  Capital General gifted very small percentages of
stock  (usually 100 shares to each  giftee) in the  following  companies,  which
includes the Company, to approximately 1,000 persons or entities: Amenity, Inc.,
Dogmatic,  Inc., Mystic Industries,  Inc.,  Highland Mfg., Inc.,  Kowtow,  Inc.,
Noble  Industries,  Inc.,  Oryan Capital  Corporation,  Pegasus Star Enterprise,
Inc., Showstoppers,  Inc., Hightide, Inc., Grandeur, Inc., Fantastic Industries,
Inc.,  Jugglar,  Inc.,  Xebec Galleon,  Inc.,  Golden Home Health Care Equipment
Centers,  Inc., Nighthawk Capital,  Inc.,  Instrument  Development  Corporation,

                                       9
<PAGE>

Panther Industries,  Inc., Owl Enterprises,  Inc., Quail, Inc., GBS Technologies
Corporation, H & B Carriers, Inc., Florida Growth Industries, Inc., Macaw, Inc.,
Longhorn Enterprise, Inc., Koala Corporation,  Yahwe Corporation,  Star Dolphin,
Inc., Jackal, Inc., Hyena Capital,  Inc., Gopher, Inc., Flamingo Capital,  Inc.,
Egret,  Inc.,  Cetacean  Industries,  Inc.,  Bonito,  Inc.,  Alpaca,  Inc., Zeus
Enterprise,   Inc.,   Tamarind,   Inc.,  Saber,  Inc.,  Radar,  Inc.,  Quiescent
Corporation,  Vanadium, Inc., Upsilon, Inc., Why Not?, Inc., Bestmark, Inc., and
Missouri Illinois Mining Co., Inc.

         Capital General did not register the gifts of shares in these companies
with the Securities  Division  of the  State  of  Utah or  with  the  Securities
Exchange Commission because it believed  these gifts to be outside the  scope of
the Utah  Uniform  Securities  Act and  the Securities Act of 1933 in as much as
such acts require  registration  for  sales and  do  not require registration of
gifts.   Nevertheless,  in  connection  with  the  distribution of shares of its
subsidiaries, Capital General  was found  by the Utah Securities Advisory Board,
in  two  decisions  affirmed  by  the Utah  State  Courts, to have  violated the
registration provisions of the Utah Uniform  Securities Act.  See  In re Amenity
Inc.,  No. SD-86-11  (Utah Sec.  Adv. Bd.  February 18, 1987) aff'd C87-2625 (3d
Dist. Ct.  September 18, 1987) aff'd sub nom Capital General Corp. v. Utah Dep't
of Business  Reg., 777 P.2d 494, 498  (Utah Ct. App.) cert. denied, 781 P.2d 873
(Utah S. Ct. 1989); In re H&B Carriers Inc., No. 87-09-28-01 (Utah Sec. Adv. Bd,
Apr. 15, 1988)  aff'd No. 88-5900053  (3d Dist. Ct. Sept 10, 1990) aff'd sub nom
Capital General  Corp. v. Utah  Dep't of Business Reg., Case No 91-197 (Utah Ct.
App. February 10, 1992.)   All  of  the  remaining  companies listed  above were
parties to the H&B Carriers order.

         Both of these actions  sought  suspension of  transactional  exemptions
respecting the shares of these companies  pursuant to Section 14 (3) of the Utah
Uniform  Securities Act.  Capital  General  defended both actions on the grounds
that the Utah Uniform Securities Act did not apply to gifts of securities,  that
the gifts were good faith gifts  specifically  exempted by the Act,  and that in
any event even if it had "sold"  shares in violation of the Act,  suspension  of
transactional  exemptions was not an authorized remedy under the statute.  These
defenses were  rejected at the  administrative  agency level,  and upon judicial
review at the District Court level and by the Utah Court of Appeals.

ITEM 11.  Executive Compensation.

         The Company has  made  no  arrangements  for  the  remuneration  of its
officers  and  directors,   except  that  they  will  be  entitled  to   receive
reimbursement for actual, demonstrable out-of-pocket expenses,  including travel
expenses if any, made on the Company's behalf in the  investigation  of business
opportunities.   No  remuneration  has been  paid to  the Company's  officers or
directors prior to  the  filing  of  this  form.   There  are  no  agreements or
understandings  with respect  to the  amount or  remuneration  that officers and
directors are expected to receive in the  future.  Management  takes no salaries
from the  Company  and  does  not  anticipate  receiving  any  salaries  in  the
foreseeable  future. No present  prediction or representation  can be made as to
the  compensation  or other  remuneration  which  may ultimately  be paid to the
Company's  management,  since  upon the  successful  consummation  of a business
opportunity,  substantial  changes may occur in the structure of the Company and
its  management.  At such time,  contracts may be negotiated with new management
requiring the payment of annual  salaries or other forms of  compensation  which
cannot  presently  be  anticipated.  Use of the  term  "new  management"  is not
intended  to  preclude  the  possibility  that any of the  present  officers  or
directors  of the  Company  might be  elected  to  serve in the same or  similar
capacities  upon the Company's  decision to  participate in one or more business
opportunities.

         Capital  General and the Company's  management may benefit  directly or
indirectly  by payments of  consulting  fees,  payment of finders fees to others
from Capital  General's  consulting  fees, sales of insiders' stock positions in
whole or in part to the  private  company,  the  Company  or  management  of the
Company,  or through the payment of salaries,  or any other  methods of payments
through which insiders or current investors receive funds,  stock,  other assets
or  anything  of value  whether  tangible  or  intangible.  There  are no plans,
proposals, arrangements or understandings with respect to the sale of additional
securities to affiliates,  current  shareholders or others prior to the location
of a business opportunity.

                                       10
<PAGE>

ITEM 12.  Security Ownership of Certain Beneficial Owners and Management.

         The following table sets forth, as of March, 2000 information regarding
the  beneficial  ownership  of shares by each person known by the Company to own
five percent or more of the outstanding  shares, by each of the directors and by
the officers and directors as a group.

<TABLE>
<CAPTION>
                          Name and address                                     Amount of                 Percent
Title of class            of beneficial owner                                  beneficial ownership      of class
- --------------            -------------------                                  --------------------      --------
<S>                       <C>                                                  <C>                       <C>
Common Stock              Capital General Corporation(1,2)                     920,400                   92.04%
                          8661 So. Highland Drive, #150
                          Sandy, Utah  84093

Common Stock              Krista  Nielson(1,2)                                  40,000                    4.00%
                          8661 So. Highland Drive, #150
                          Sandy, Utah  84093

Common Stock              All Officers and
                          Directors as a Group(2)                              960,400                   96.04%

</TABLE>

  (1)Capital General Corporation,  Krista  Nielson,  David R.  Yeaman  and Sasha
Belliston may be deemed to be the Company's "parents" and "promoters,"  pursuant
to the Rules and Regulations promulgated under the 1933 Act.

  (2)Capital General  Corporation  is a  private  corporation,  owned by another
private  corporation,  Yeaman  Enterprises,  Inc.  The  stockholders  of  Yeaman
Enterprises  are the adult children  of the family of David Yeaman, who resigned
as an officer and director of Capital General and Yeaman  Enterprises  in April,
1997. Sasha Belliston,  Mr.  Yeaman's daughter,  is  the  principal  shareholder
of  Yeaman Enterprises.

Ms. Belliston's beneficial ownership of the securities of the Company is derived
from the shares directly owned by Capital General.  Ms.  Belliston  beneficially
owns shares of  the Company  which are  owned by Capital General in that she has
the power to vote or direct the voting of the shares and the power to dispose of
or to direct the disposition  of the  shares.   Ms.  Belliston  and Ms.  Nielson
control and have beneficial ownership of the shares owned by Capital General and
exercise shared voting power  and shared  investment  power over  those  shares.
While  Mr. Yeaman  has  resigned from  his affiliation  with the Company, Yeaman
Enterprises and Capital General,  he may continue  to be  deemed an affiliate of
the Company by  virtue of his  familial and  historical  relationships  with the
Company, its shareholders, officers and directors.

ITEM 13.  Certain Relationships and Related Transactions.

         No officer,  director, nominee for election as a director, or associate
of such  officer,  director  or  nominee  is or has been in debt to the  Company
during the last fiscal year.  However,  the  Company's  officers,  directors and
major shareholder, have made an oral undertaking to make loans to the Company in
amounts sufficient to enable it to satisfy its reporting  requirements and other
obligations  incumbent on it as a public company, and to commence,  on a limited
basis, the process of investigating possible merger and acquisition  candidates.
The Company's  status as a publicly-held  corporation may enhance its ability to
locate  potential  business  ventures.  The loans will be interest  free and are
intended  to be repaid  at a future  date,  if or when the  Company  shall  have
received  sufficient  funds  through  any  business  acquisition.  The loans are
intended to provide for the payment of filing fees,  professional fees, printing
and copying fees and other miscellaneous fees.

                                       11

<PAGE>
                                     PART IV

ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

         Financial Statements and Financial Statement Schedules.
         -------------------------------------------------------
         Financial Statements - December 31, 1999, 1998 and 1997.

         Reports on Form 8-K.
         --------------------
         There were no reports on Form 8-K filed during the fourth quarter
         of 1999.


                                   SIGNATURES



         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.



                              MICRO-ECONOMICS, INC.



Date: March 28, 2000               By: s\Krista Nielson
                                     -------------------------------------------
                                     Krista Nielson, President, CEO and Director



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


Date: March 28, 2000               By: s\Krista Nielson
                                     -------------------------------------------
                                     Krista Nielson, President, CEO and Director



Date: March 28, 2000               By: s\Sasha Belliston
                                     -------------------------------------------
                                     Sasha Belliston, Secretary/Treasurer, CFO
                                         and Director


                                       12

<PAGE>


                                 SMITH & COMPANY
           A PROFESSIONAL CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS

                          INDEPENDENT AUDITOR'S REPORT


Board of Directors
Micro-Economics, Inc. (A Development Stage Company)

We  have audited  the accompanying  balance  sheets  of Micro-Economics, Inc. (a
development  stage  company) as of  December 31, 1999 and 1998,  and the related
statements of  operations,  changes in stockholders' deficit, and cash flows for
the years  ended  December 31, 1999, 1998 and 1997, and for the period  of March
14, 1990 (date of inception)  to December 31, 1999.   These financial statements
are the  responsibility  of the  Company's management.  Our responsibility is to
express an opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the 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 audits provide 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 Micro-Economics, Inc.  (a
development stage company) as of  December 31, 1999 and 1998, and the results of
its operations,  changes  in stockholders' deficit,  and its cash  flows for the
years ended  December 31,  1999, 1998 and 1997, and for the period  of March 14,
1990 (date  of  inception) to December  31, 1999,  in conformity  with generally
accepted accounting principles.



                                              s\Smith & Company
                                              CERTIFIED PUBLIC ACCOUNTANTS


Salt Lake City, Utah
February 2, 2000

         10 West 100 South, Suite 700 . Salt Lake City, Utah 84101-1554
             Telephone: (801) 575-8297 . Facsimile: (801) 575-8306
                       E-mail: [email protected]
          Members: American Institute of Certified Public Accountants
                Utah Association of Certified Public Accountants

                                      F-1
<PAGE>

<TABLE>
<CAPTION>


                               MICRO-ECONOMICS, INC.
                          (A Development Stage Company)
                                 BALANCE SHEETS


                                                                                   December 31,
                                                                            1999                   1998
                                                                           ------                 ------
<S>                                                                        <C>                    <C>
             ASSETS
             ------
CURRENT ASSETS
         Cash in bank                                                      $    0                 $    0
                                                                           ------                 ------

                      TOTAL CURRENT ASSETS                                      0                      0
                                                                           ------                 ------

                                                                           $    0                 $    0
                                                                           ======                 ======

             LIABILITIES (DEFICIT)
             ------------------------------

CURRENT LIABILITIES
         Accounts payable                                                  $    0                 $  666
                                                                           ------                 ------
                 TOTAL CURRENT LIABILITIES                                      0                    666

STOCKHOLDERS' (DEFICIT)
          Common Stock $.001 par value:
           Authorized - 25,000,000 shares
           Issued and outstanding 1,000,000 shares                          1,000                  1,000
           Additional paid-in capital                                         666                      0
           Deficit accumulated during the development stage                (1,666)                (1,666)
                                                                           ------                 ------

                TOTAL STOCKHOLDERS' (DEFICIT)                                   0                   (666)
                                                                           ------                 ------

                                                                           $    0                 $    0
                                                                           ======                 ======


See Notes to Financial Statements.
</TABLE>

                                      F-2
<PAGE>

<TABLE>
<CAPTION>


                               MICRO-ECONOMICS, INC.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS


                                                                                                           3/14/90
                                                                                                          (Date of
                                                            Years Ended December 31,                    inception) to
                                                   1999                1998               1997             12/31/99
                                                ---------           ---------          ---------          ---------
<S>                                             <C>                 <C>                <C>                <C>
Net sales                                       $       0           $       0          $       0          $       0
Cost of sales                                           0                   0                  0                  0
                                                ---------           ---------          ---------          ---------

                      GROSS PROFIT                      0                   0                  0                  0


General & administrative expenses                       0                   0                 39              1,666
                                                ---------           ---------          ---------          ---------

                          NET LOSS              $       0           $       0          $     (39)         $  (1,666)
                                                =========           =========          =========          =========


Net income (loss) per weighted average share    $     .00           $     .00          $    (.00)
                                                =========           =========          =========


Weighted average number of common shares
 used to compute net income (loss) per
 weighted average share                         1,000,000           1,000,000          1,000,000
                                                =========           =========          =========


See Notes to Financial Statements.
</TABLE>

                                      F-3
<PAGE>

<TABLE>
<CAPTION>
                               MICRO-ECONOMICS, INC.
                          (A Development Stage Company)
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                                                                                                        Deficit
                                                                                                      Accumulated
                                                       Common Stock                  Additional         During             Stock
                                                     Par Value $0.001                  Paid-In         Development      Subscription
                                                 Shares             Amount             Capital           Stage           Receivable
                                                 -------------------------            ---------        ---------         ----------
<S>                                              <C>             <C>                  <C>              <C>               <C>
Balances at 3/14/90 (Date of inception)                  0       $       0            $       0        $       0         $        0
  Issuance of common stock (restricted)
     at $.001 per share at 3/14/90               1,000,000           1,000                                                   (1,000)
         Net income for period                                                                                 0
                                                 ---------       ---------            ---------        ---------         ----------
Balances at 12/31/90                             1,000,000           1,000                    0                0             (1,000)
  Cash paid for stock subscription                                                                                            1,000
         Net loss for year                                                                                (1,000)
                                                 ---------       ---------            ---------        ---------         ----------
Balances at 12/31/91                             1,000,000           1,000                    0           (1,000)                 0
         Net income for year                                                                                   0
                                                 ---------       ---------            ---------        ---------         ----------
Balances at 12/31/92                             1,000,000           1,000                    0           (1,000)                 0
         Net income for year                                                                                   0
                                                 ---------       ---------            ---------        ---------         ----------
Balances at 12/31/93                             1,000,000           1,000                    0           (1,000)                 0
         Net income for year                                                                                   0
                                                 ---------       ---------            ---------        ---------         ----------
Balances at 12/31/94                             1,000,000           1,000                    0           (1,000)                 0
         Net income for year                                                                                   0
                                                 ---------       ---------            ---------        ---------         ----------
Balances at 12/31/95                             1,000,000           1,000                    0           (1,000)                 0
   Stock sold (restricted) at $5.00
     per share 1/10/96                              20,000              20               99,980
   Stock cancelled 12/31/96                        (20,000)            (20)             (99,980)
         Net loss for year                                                                                  (627)
                                                 ---------       ---------            ---------        ---------         ----------
Balances at 12/31/96                             1,000,000           1,000                    0           (1,627)                 0
         Net loss for year                                                                                   (39)
                                                 ---------       ---------            ---------        ---------         ----------
Balances at 12/31/97                             1,000,000           1,000                    0           (1,666)                 0
         Net income for year                                                                                   0
                                                 ---------       ---------            ---------        ---------         ----------
Balances at 12/31/98                             1,000,000           1,000                    0           (1,666)                 0
         Capital contribution                                                               666
         Net income for year                                                                                   0
                                                 ---------       ---------            ---------        ---------         ----------
Balances at 12/31/99                             1,000,000       $   1,000            $     666        $  (1,666)        $        0
                                                 =========       =========            =========        =========         ==========



See Notes to Financial Statements.
</TABLE>

                                      F-4
<PAGE>

<TABLE>
<CAPTION>


                               MICRO-ECONOMICS, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS



                                                                                                              3/14/90
                                                                                                             (Date of
                                                                 Years Ended December 31,                  Inception) to
                                                        1999               1998              1997            12/31/99
                                                     ----------         ----------        ----------       -------------
<S>                                                <C>                <C>               <C>               <C>
OPERATING ACTIVITIES
         Net income (loss)                         $            0     $            0    $          (39)   $       (1,666)
         Changes in assets and liabilities:
           Accounts payable                                  (666)                 0                39                 0
                                                   --------------     --------------    --------------    --------------

                          NET CASH USED BY
                      OPERATING ACTIVITIES                   (666)                 0                 0            (1,666)

INVESTING ACTIVITIES                                            0                  0                 0                 0
                                                   --------------     --------------    --------------    --------------

                          NET CASH USED BY
                      INVESTING ACTIVITIES                      0                  0                 0                 0

FINANCING ACTIVITIES
         Proceeds from sale of common stock                     0                  0                 0             1,000
         Capital contribution                                 666                  0                 0               666
                                                   --------------     --------------    --------------    --------------

                      NET CASH PROVIDED BY
                      FINANCING ACTIVITIES                    666                  0                 0             1,666
                                                   --------------     --------------    --------------    --------------

                          INCREASE IN CASH
                      AND CASH EQUIVALENTS                      0                  0                 0                 0

         Cash and cash equivalents
         at beginning of year                                   0                  0                 0                 0
                                                   --------------     --------------    --------------    --------------

                   CASH & CASH EQUIVALENTS
                            AT END OF YEAR         $            0     $            0    $            0    $            0
                                                   ==============     ==============    ==============    ==============



See Notes to Financial Statements.
</TABLE>

                                      F-5
<PAGE>
                               MICRO-ECONOMICS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1999

NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
         --------------------------------------------
         Accounting Methods:
         The Company  recognizes income and expenses based on the accrual method
         of accounting.

         Dividend Policy:
         The  Company  has not yet  adopted  any  policy  regarding  payment  of
         dividends.

         Income Taxes:
         The Company  records the income tax effect of  transactions in the same
         year that the  transactions  enter  into the  determination  of income,
         regardless of when the  transactions  are  recognized for tax purposes.
         Tax credits are  recorded in the year  realized.  Since the Company has
         not yet realized income as of the date of this report, no provision for
         income taxes has been made.

         In February,  1992, the Financial  Accounting  Standards  Board adopted
         Statement of Financial  Accounting  Standards No. 109,  Accounting  for
         Income Taxes, which supersedes substantially all existing authoritative
         literature for  accounting  for income taxes and requires  deferred tax
         balances  to be  adjusted to reflect the tax rates in effect when those
         amounts are expected to become payable or refundable. The Statement was
         applied in the  Company's  financial  statements  for the  fiscal  year
         commencing January 1, 1993.

         At December 31, 1999 a deferred tax asset has not been  recorded due to
         the  Company's  lack of  operations  to  provide  income to use the net
         operating loss carryover of $1,666 which expires as follows:
         Year Ended              Expires                            Amount
         December 31, 1991       December 31, 2006              $    1,000
         December 31, 1996       December 31, 2011                     627
         December 31, 1997       December 31, 2012                      39
                                                                ----------
                                                                $    1,666
                                                                ==========
NOTE 2:  DEVELOPMENT STAGE COMPANY
         -------------------------
         The  Company  was incorporated under the laws of the State of Nevada on
         March 14, 1990  and   has  been   in   the   development   stage  since
         incorporation.

NOTE 3:  CAPITALIZATION
         --------------
         On the date of incorporation,  the Company sold 1,000,000 shares of its
         common  stock to Capital  General  Corporation  for $1,000 cash, for an
         average  consideration  of $.001 per share.  The  Company's  authorized
         stock includes 25,000,000 shares of common stock at $.001 par value. On
         January 10, 1996,  the Company  sold 20,000  shares of its common stock
         for $100,000 cash for an average consideration of $5.00 per share.  The
         stock was cancelled and the $100,000 was refunded prior to December 31,
         1996.

NOTE 4:  RELATED PARTY TRANSACTIONS
         --------------------------
         The Company neither owns nor leases any real property.  Office services
         are provided,  without  charge,  by Capital General  Corporation.  Such
         costs are  immaterial to the financial  statements,  and,  accordingly,
         have not been  reflected  therein.  The officers  and  directors of the
         Company  are  involved  in other  business  activities  and may, in the
         future, become involved in other business opportunities.  If a specific
         business  opportunity  becomes  available,  such  persons  may  face  a
         conflict in  selecting  between  the  Company and their other  business
         interests.  The Company has not  formulated a policy for the resolution
         of such conflicts.

NOTE 5:  1996 ACTIVITY AND SUBSEQUENT EVENTS
         -----------------------------------
         In January 1996, there was a change in control of the Company.  The new
         officers and directors  attempted to  establish  business operations in
         Australia.   The  efforts  were  not  successful  and  the  transaction
         effecting  the change in control was rescinded.  Subsequent to December
         31,  1998,   current  management   retained  a  lawyer  to  search  for
         liabilities, liens,  and  judgements  against the Company in Australia.
         The  search  revealed  no  liabilities,  liens,  or  other legal  items
         recorded against the Company.

                                      F-6


<TABLE> <S> <C>


<ARTICLE>                     5
<LEGEND>
     This schedule contains summary financial information extracted from
     Micro-Economics, Inc. December 31, 1999 financial statements and is
     qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK>                         0000894552
<NAME>                        MICRO-ECONOMICS, INC.

<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                              DEC-31-1999
<PERIOD-END>                                   DEC-31-1999
<CASH>                                         0
<SECURITIES>                                   0
<RECEIVABLES>                                  0
<ALLOWANCES>                                   0
<INVENTORY>                                    0
<CURRENT-ASSETS>                               0
<PP&E>                                         0
<DEPRECIATION>                                 0
<TOTAL-ASSETS>                                 0
<CURRENT-LIABILITIES>                          0
<BONDS>                                        0
                          0
                                    0
<COMMON>                                       1,000
<OTHER-SE>                                    (1,000)
<TOTAL-LIABILITY-AND-EQUITY>                   0
<SALES>                                        0
<TOTAL-REVENUES>                               0
<CGS>                                          0
<TOTAL-COSTS>                                  0
<OTHER-EXPENSES>                               0
<LOSS-PROVISION>                               0
<INTEREST-EXPENSE>                             0
<INCOME-PRETAX>                                0
<INCOME-TAX>                                   0
<INCOME-CONTINUING>                            0
<DISCONTINUED>                                 0
<EXTRAORDINARY>                                0
<CHANGES>                                      0
<NET-INCOME>                                   0
<EPS-BASIC>                                  .00
<EPS-DILUTED>                                  .00




</TABLE>


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