Amereco Inc – ‘10KSB’ for 12/31/96

As of:  Tuesday, 7/15/97   ·   For:  12/31/96   ·   Accession #:  793376-97-7   ·   File #:  0-14609

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report -- Small Business                       45±   206K 

Document Table of Contents

SECURITIES AND EXCHANGE COMMISSION      
Washington, DC 20549      
FORM 10-KSB       

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE                
SECURITIES EXCHANGE ACT OF 1934 [Fee Required]            
[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES       
EXCHANGE ACT OF 1934 [No Fee Required]                    

For the fiscal year ended December 31, 1996     
Commission File Number: 0-14609     

AMERECO, INC.     
(Exact Name of registrant as specified in its charter)  
Utah                          84-0960456      
(State of incorporation)       (IRS Employer Identification No.   

680 Atchison Way, Suite 800       
Castle Rock, CO  80104      
(303) 688-5160      
(Address, including zip code, and telephone number, including           
area code of Registrant's executive offices)          

Securities registered pursuant to Section 12(b) of the Act:         
Title of each class                    Name of each exchange on                 
                      which registered
None                                     None                   

Securities registered pursuant to Section 12(g) of the Act:         

Common Stock, $.001 par value           

Check whether the issuer(1) filed all reports required to be filed by Section   
13 or 15(d)of the Exchange Act during the past 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. Yes  X   No___       

Check if disclosure of delinquent filers in response to Item405 of Regulation   
S-B is not contained in this form, and no disclosure will be contained,to the   
best of registrant's knowledge, in definitive  proxy  or  information  state-   
ments incorporated by reference in Part III of this Form 10-KSB or any amend-   
ment to this Form 10-KSB.[x]                                                    

Issuer's revenues for its most recent fiscal year:  $3,017,182                  

The number of shares of the Registrant held by non-affiliates  as of December   
31, 1996, was 1,614,540. For purposes of this report, officers, directors and   
holders of 5% or more  of the  Registrant's Common Stock  are considered  the   
affiliates of the Registrant as of that date.   For internal  accounting pur-   
poses, Registrant has determined fair market value per share  as of such date   
was $1.00, and were such amount  to have been reflected  in an active market,   
the aggregate value  of Common Stock held  by non-affiliates  as of such date   
would  have  been  $1,614,540.   As of  December  31,  1996,  Registrant  had   
5,007,616  shares  of Common Stock outstanding.                                 

DOCUMENTS INCORPORATED BY REFERENCE:  NONE        

Page 1 of 53.               

Table of Contents and Cross Reference Sheet               

Part I                                                                          
                                              Page No.
Item 1  Description of Business                                1                
Item 2  Properties                                             5                
Item 3  Legal Proceedings                                      5                
Item 4  Submission of Matters to a Vote of                                      
Security Holders                                       6        

Part II                                                                         

Item 5  Market for Common Equity and Related                                    
Shareholder Matters                                    6        
Item 6  Management's Discussion and Analysis or                                 
Plan of Operations                                     6        
Item 7  Financial Statements                                   8                
Item 8  Changes In and Disagreements with Accountants                           
on Accounting and Financial Disclosure                 8        

Part III                                                                        

Item 9  Directors, Executive Officers and Compliance                            
with Section 16(a) of the Exchange Act                 9        
Item 10 Executive Compensation                                11                
Item 11 Security Ownership of Certain Beneficial                                
Owners and Management                                 14        
Item 12 Certain Relationships and Related Transactions        15                
Item 13 Exhibits and Reports on Form 8-K                      20                

PART I                                                                          

ITEM 1.  Description of Business                                                

The Company                                                                     

Amereco, Inc. (including  its wholly  owned  subsidiary, the  "Company") was    
organized as a Utah corporation on October 16, 1974 under the name of Norcal    
Chemical Corporation. The Company's name was changed to Amereco,Inc. in June    
1995.  The Company conducted no significant activities  until 1984, when, in    
August, it acquired all the outstanding stock of Kal-O-Mine Resources, Inc.,    
a Colorado  corporation.   Currently,  the Company's  lightweight  aggregate    
manufacturing business operations are conducted  through Omnivest Resources,    
Inc.,  a Georgia  corporation  which is a  wholly  owned  subsidiary  of the    
Company ("ORI").                                                                

Business of the Company                                                         

The Company, through ORI,  is engaged  in the operation  of the  lightweight    
aggregate manufacturing facilities.  These facilities are situated on a 462-    
acre parcel  with associated  manufacturing  facilities  and equipment.  The    
property is adjacent to the Chattahoochee River,  which is 7 miles  south of    
Fort Gaines,  Georgia and  180 miles  southwest  of Atlanta, Georgia.   Rail    
transportation  is  expected  to be  available  for shipment  of lightweight    
aggregate  to customers and delivery  of coal from suppliers  by the Georgia    
Southwestern Railroad  in Georgetown, Georgia.   An Army Corps  of Engineers    
permit allows the construction of a barge dock that would allow ORI  to ship    
product  to  customers  along  the  Chattahoochee River  and other  customer    
locations on river systems that are navigable  from the Gulf of Mexico.  ORI    
estimates that the cost to construct the dock facility would be approximately   
$250,000.  During 1996, most of the finished material  was shipped by indep-    
endent truckers.   With market  area expansion, the  use of  rail and  barge    
delivery will increase significantly in future years.                           

ORI's manufacturing plant and associated buildings  are situated on approxi-    
mately 20 acres of the 462 parcel.  The plant's equipment primarily consists    
of crushers,  conveyor  systems,  a 235' long x 14'  diameter  kiln,  sizing    
equipment, loading equipment,  transportation vehicles  and various items of    
environmental protection equipment.                                             

The aggregate  is produced  from  clay  that is  removed  from  surface out-    
croppings and conveyed to the manufacturing plant.  The clay is crushed into    
raw material that  is processed  in the rotary kiln.   The resulting product    
(lightweight aggregate) is an  expanded, porous, hard material  that is then    
sized for customer specifications.  The ultimate production capacity  of the    
plant is approximately  691,000  cubic yards  (438,000 tons) of  lightweight    
aggregate per year.  While the Company operated at approximately 50% of full    
capacity in 1996, it expects to exceed 1996 production levels in 1997.          

After the clay is processed through the production facilities, the resulting    
lightweight aggregate  is used  in the manufacture  of concrete construction    
materials.   Justification  for lightweight  concrete  materials usage  lies    
principally in reduced weight without loss of strength and durability in the    
concrete, improved thermal insulation and fire retardant qualities.   Light-    
weight aggregate is used  in concrete block (masonry),  structural concrete,    
roofing material, ceiling and floor systems, load-bearing walls, prestressed    
and pre-cast concrete, bridge floors and highway surfaces.                      

ORI's initial marketing strategy  for its lightweight  aggregate has focused    
on concrete block manufacturers  and structural aggregate  customers located    
within a 300-mile radius of its maunfacturing facility inclusive of Atlanta,    
Columbus, Macon and Albany, Georgia, Birmingham and Montgomery,  Alabama and    
Florida markets from Pensacola to Tampa.                                        

ORI has recently entered  into an important  joint venture arrangement  with    
Florida Mining and Materials, Inc., "FMM", a major business unit  and wholly    
owned  subsidiary  of  Southdown, Inc.,  to  blend  and  market  lightweight    
aggregate material  to the  Florida concrete  masonry industry.   The  joint    
venture, known as Alliance Materials Company, LLC, ("Alliance Materials"),is    
owned equally by FMM and ORI.   Alliance Materials was formed  to capitalize    
on the strengths of its owners.  FMM is an industry leader in the production    
of and sales of readymix concrete and concrete masonry units.   FMM also has    
the exclusive rights  to all of the Aardelite(TM),  a pelletized lightweight    
aggregate made from a coal by-product, produced by a third party producer in    
Florida.  ORI  produces  Omnilite(TM) at  its newly  reconstructed  facility    
which is the closest source  of high quality expanded  lightweight aggregate    
material to the state of Florida.  Alliance Materials  blends the lower cost    
Aardelite(TM) material,  which by  itself cannot  meet the same  performance    
standards  as  the  Omnilite(TM) material, with  Omnilite(TM) to make a cost    
competitive  high quality aggregate product sold as "Allite(TM)".               

Competition                                                                     

Other products used  for the manufacture  of lightweight  concrete  products    
with which  Omnivest  Resources, Inc.'s  (ORI)  lightweight  aggregate  will    
compete include bottom ash, which is a by-product of coal-fired power plants    
and volcanic  pumice.  Manufacturers of  concrete blocks and  other concrete    
materials require  consistency in the  lightweight materials  mixed with the    
concrete in order to  maintain a uniform mix formula.  The Company  believes    
that  bottom  ash and volcanic  pumice often  do not  provide this  required    
consistency, making  the use of  a relatively uniform  product such as ORI's    
clay aggregate  desirable.  Additionally, bottom ash and volcanic pumice are    
generally more  abrasive than  lightweight  clay aggregate.   Some customers    
which have somewhat less stringent quality standards or requirements  may be    
attracted to bottom ash and volcanic pumice on the basis  of perceived lower    
costs and greater availability than ORI's lightweight aggregate.                

Omnivest Resources, Inc.  will also  compete  with  other manufacturers  who    
produce a lightweight clay  or shale aggregate and which  also  market their    
products  in  the marketing  radius initially  targeted by  the Company  for    
ORI's  aggregate.  These competing  companies include Big  River Industries,    
Livingston, Alabama and  Irwinville, Louisiana; Solite(TM), Albemarle, North    
Carolina  and  Stalite(TM),  Gold  Hill, North  Carolina.    Each  of  these    
competitors is  well  capitalized  and  has a  national reputation  and est-    
ablished marketing  organizations.   Nevertheless, the  Company's management    
believes  that  the  qualities,  availability  and  price  of the  Company's    
products will permit the Company to compete effectively.                        

Government Regulation                                                           

Omnivest Resources, Inc.'s operations are subject  to various federal, state    
and local regulations regarding environmental matters, land use  and zoning.    
Such regulations generally relate to air and water quality and other aspects    
of environmental control and employee safety. ORI has all necessary federal,    
state and local permits required to produce, transport and market the light-    
weight aggregate from the present facilities.                                   

The requirements  imposed by  governmental  authorities  applicable to ORI's    
proposed  operations are  costly and time  consuming.  In the  future,  such    
requirements may potentially  restrict ORI's lightweight aggregate  manufac-    
turing  operations or delay or limit expansion. Future legislation  designed    
to protect the environment and health and safety considerations, as  well as    
future interpretations of existing laws, may require  substantial  increases    
in operating costs as well as delays and interruptions. As with any resource    
based industry, the Company cannot reliably predict the effect of changes in    
federal, state  and local legislation, regulation  or interpretations on its    
future operations.                                                              

Historic Financing Activities and 1996 Partnership Interest Conversion          

In 1986,  the United States  Bankruptcy Court  for the  Middle  District  of    
Georgia approved the Plan of Reorganization (the "Plan")of Camp Lightweight,    
Inc., a Georgia corporation ("Lightweight"), which provided for the sale  to    
the Company of  Lightweight's aggregate manufacturing assets  and operations    
conducted  on a  462-acre  parcel  located  in Clay  County,  Georgia.   The    
principal  activities  of the Company  and its management  from 1987 through    
1993  were involved with complicated legal proceedings  with respect  to the    
Plan  in the  Chapter 11 proceedings, to obtain clear title to Lightweight's    
assets which would permit financing for the  Company's proposed  lightweight    
aggregate manufacturing operations.                                             

In February 1993, the Bankruptcy Court  reaffirmed its  1986 Order approving    
Lightweight's Plan with the result  that the Company received  ownership and    
unencumbered title to Lightweight's aggregate manufacturing facilities,  to-    
gether with licenses, construction and operating rights,  government permits    
and approximately 462 acres of land in Clay County, Georgia.                    

In March 1993,  the  Company  formed  and  became  the general  and managing    
partner of Omnivest Resources, L.P.("ORLP" or "the  Partnership").  ORLP was    
merged into a wholly owned subsidiary of the Company in June of 1996.   ORLP    
had been  formed  to  attract  needed capital  to refurbish  the lightweight    
aggregate production facilities  in Clay County, Georgia, to  commence manu-    
facturing operations.  The Company  transferred the  aggregate manufacturing    
facilities acquired under the Plan into ORLP.  Under a Management Agreement,    
the Company controlled and managed ORLP, as managing partner.   On March 30,    
1993, the Company  and ORLP  entered into  a Credit Agreement  with Omnivest    
International Financial Services, Inc.("Omnivest" now "Cathay Global Invest-    
ments, Inc." or "Cathay"),C.I.S. Resources Limited Liability Company ("CIS")    
and Georgia Resources, Inc.("GRI") (GRI and CIS,  collectively,  "Lenders").    
The Credit Agreement permitted  the Lenders  to convert debt  to partnership    
interests,  and further  permitted the  limited  partners to  convert  their    
limited partnership interests into shares of the Common Stock of the Company.   

As of December 31, 1994, pursuant to the Credit Agreement,  and a subsequent    
amendment to the Credit Agreement, the Lenders  had advanced  $6.931 million    
to ORLP  under the Credit Agreement.  Those loan proceeds  were utilized  to    
refurbish the aggregate manufacturing facilities contributed  by the Company    
to ORLP in order  to commence operations.   Substantially all  refurbishment    
activities  were completed  in October  1994 and  the Partnership  commenced    
operations during the fourth quarter of 1994. In addition, GRI had committed    
$1.200 million in working capital funds to ORLP.                                

The loans to ORLP  under the  Credit Agreement  were secured  by all  of the    
assets conveyed by the Company and repayment was guaranteed  by the Company.    
In addition,  the  loans were  guaranteed by  Messrs.  Steven H. Miller  and    
Kenneth W. Tribbey, officers  and directors  of the Company.  Messrs. Miller    
and Tribbey's guarantees were secured by the pledge of 106,520 shares of the    
Company's  shares  beneficially  owned  by a  company  affiliated  with such    
officers,  together  with options  previously  granted  to such  officers to    
purchase  a total  of 400,000  shares  of the  Company's common stock.   See    
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."                               

Under the Partnership Agreement and  the Credit Agreement, both  as amended,    
the Lenders were permitted  to convert all,  but not  less than all,  of the    
advances to ORLP under the Credit Agreement into a 50.9% Limited Partnership    
Interest for the first $3.996 million and up to an additional 27.67% Limited    
Partnership Interest  if the additional  $3 million provided  by the amended    
Credit Agreement was advanced and converted.  As of December 31, 1994,$2.935    
million had been advanced above the $3.996 million.   On June 15, 1995,  the    
Lenders converted $6.931 million  in indebtedness to 78.13% Limited Partner-    
ship ownership  interest.   Also in  June 1996, one  of the limited partners    
was issued 1.75% limited partnership interest as  consideration  for posting    
a $1.25  million  letter  of credit  as collateral  for a  partnership  loan    
agreement.  Conversion of the indebtedness to limited  partnership interests    
occurred after a majority of the Company's shareholders approved  the trans-    
fer by the Company  of its lightweight  aggregate  manufacturing  facilities    
to  ORLP contemplated  by the  Partnership  Agreement.  At the time  of such    
shareholder  approval,  the Company's  shareholders were  informed  that the    
partnership interests were  convertible  to shares  of the Company's  Common    
Stock.  See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."                   

The Partnership  Agreement, as amended, permitted  the first  $3.996 million    
convertible into 50.9%  Limited Partnership Interest  to convert into a like    
percentage of the restricted Common Stock  of the Company  to be outstanding    
after giving effect  to such conversion.  Any additional Limited Partnership    
Interest resulting  from the conversion  of advances in excess of the $3.996    
million (a total of $2.935 million  for 27.23% limited partnership interest)    
was convertible  into shares of the  Company's restricted Common Stock.  See    
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."                               

Conversion  of all  the limited  partnership  interests  into shares  of the    
Common Stock of the Company was consummated on June 1,1996, when the Company    
completed a  step transaction  in which  it issued  3,677,071 shares  of its    
common stock to the former limited partners of ORLP and received 100% of the    
common stock  of Omnivest  Resources, Inc. (formerly "ORLP"), in  connection    
with a merger of Omnivest Resources with and into ORLP, Inc., a wholly owned    
subsidiary of the Company. The business combination is reported as a reverse    
purchase of AMERECO, Inc. by Omnivest Resources, Inc. Operations of Omnivest    
Resources, Inc. ("ORI") are reported  for all periods presented.  Operations    
for AMERECO, Inc. are reported from June 1, 1996, the reverse purchase date,    
through  December  31, 1996.   The Board  of Directors  determined  that the    
purchase price approximated the fair value  of the net assets acquired.  See    
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."                               

But for the financing  received in connection  with the formation and subse-    
quent borrowing activities  of ORLP, the  Company could  not have  proceeded    
with refurbishment of its facilities and commencement of the aggregate manu-    
facturing  operations.   Subsequent  to the  June 1, 1996  acquisition,  the    
Company has continued  to manage the aggregate facility  and business of ORI    
under the Management Agreement  between the Company and ORI, with ORI having    
ORLP's  former rights,  duties and  obligations.  ORI and  the Company  have    
continued to borrow funds  from related parties and certain  of such debt is    
secured  by the  Company's  shares  in ORI.  See "CERTAIN  RELATIONSHIPS AND    
RELATED TRANSACTIONS."                                                          

On April 18, 1997  the Company  completed the long awaited  debt refinancing    
with  First Federal  Savings Bank  of Southwest  Georgia,  for which  it had    
received a loan commitment  in July of 1996.  The term loan  is for 15 years    
for $5,000,000  with monthly amortization  of $54,713 principal and interest    
with the interest rate  adjusted quarterly based  on a weighted average Bond    
Equivalent Rate  during the  prior quarter.  The effective interest  rate on    
April 18, 1997 was 10.32%.  The collateral  for the loan  is equipment, fix-    
tures, all real property owned  by the Company and a $500,000 Certificate of    
Deposit.  In addition, a federal rural development program guarantees appro-    
ximately 80% of the outstanding indebtedness  under the loan facility at any    
time.  $3,000,000 of  the proceeds  of such loan  from First Federal Savings    
Bank of Southwest Georgia  was used to  pay the balance  of a term loan with    
Congress Financial Corporation("Congress") and pay down the revolving credit    
with Congress to approximately $1.1 million. Approximately $382,000 was used    
to repay indebtedness  to an unrelated corporation  and $378,000 was used to    
repay a portion of the Company's indebtedness  to Cathay Global Investments,    
Inc., a corporation controlled  by Mr. Wei Ming Lu,  who holds approximately    
65% of the  Common Stock  of the  Company.  See  "CERTAIN RELATIONSHIPS  AND    
RELATED TRANSACTIONS."  Approximately $832,000  of the First Federal Savings    
Bank of Southwest Georgia loan remains available  for acquisition of capital    
equipment and improvements to facilities. The remainder of the loan proceeds    
has been used  to pay current  indebtedness to  trade creditors  and service    
providers.                                                                      

Employees                                                                       

Other than its two executive officers, the Company had no other employees as    
of the date of  this Report.  ORI has 56  employees as  of the date  of this    
Report. ORI employees are not considered to be employees of the Company. The    
Company also  hires  outside  professional  consultants  to  handle  certain    
technical aspects of the Company's business operations.  Management believes    
that this type  of contracting for professional  and administrative services    
is an economical and practical means for the Company to obtain such services    
at this time.                                                                   

ITEM 2.  Properties                                                             

The Company's  executive  and  administrative  offices  are located  at  680    
Atchison  Way,  Suite 800,  Castle Rock,  Colorado,  80104.  These  premises    
consist  of  approximately  5,000  square feet  and are rented  from  a non-    
affiliate for $2,918 per month on a month-to-month basis.The Company through    
its  subsidiary  Omnivest  Resources, Inc.  owns 462  acres  of land,  which    
includes 32,400 square feet of improved area. The property is collateral for    
approximately  $5.0 million in Company  obligations,  including a  remaining    
balance of available credit of $832,000,which may be used to acquire capital    
equipment  and make  facility  improvements.  See also  ITEM 1(d),  "CERTAIN    
RELATIONSHIPS AND RELATED TRANSACTIONS" and "Subsequent Events."                

ITEM 3.  Legal Proceedings                                                      

Other than the routine litigation of disputed claims of certain contractors,    
customers, and suppliers  to ORI concerning operation of ORI's manufacturing    
facilities, the  Company is  not a  party  to, nor is  any  of its  property    
subject to, any material pending legal proceeding, and the Company  knows of    
no material legal proceeding contemplated or threatened against it.  Manage-    
ment believes  that all  such  disputed  contractor,  customer and  supplier    
claims  will be resolved in the normal course of business.                      

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

During the  year ended  December 31, 1996, the Company's  shareholders voted    
for election of directors and ratification of selection  of accountants at a    
meeting held June 28, 1996.  No nominated director received less than 90% of    
the vote of the holders of outstanding shares of the Company's Common Stock.    

PART II                                                                         

ITEM 5.  Market for Common Equity and Related Shareholder Matters               

In the past, the Company's common stock has been sporadically  traded in the    
over-the-counter market  and from time  to time  occasional  quotations have    
appeared in the  National Quotation Bureau's "pink sheets."  At December 31,    
1996,  an  extremely limited  trading  market  existed  and  accordingly  no    
meaningful market information was available.                                    

As of December 31, 1996,  there were  977 record  holders  of the  Company's    
common stock.                                                                   

As of January 1996, the Company's common stock is quoted on the OTC Bulletin    
Board under the stock symbol "AMRM" and CUSIP number 02360P-10-4.               

The Company  has paid  no cash  dividends  on its  common  stock and  has no    
present intention of paying cash dividends in the foreseeable future.  It is    
the present  policy  of the  Board of  Directors  to retain all  earnings to    
provide for the Company's growth.  Payment of  cash dividends  in the future    
will  depend,  among  other  things,  upon the  Company's  future  earnings,    
requirements for capital improvements and financial condition.For additional    
information  concerning   restrictions  on  the  Company's  ability  to  pay    
dividends, see "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."                

ITEM 6.  Management's Discussion and Analysis or Plan of Operations             

The following is management's discussion and analysis of certain significant    
factors that have affected the Company's financial  condition and results of    
operation  during  the  periods  included  in  the  accompanying   financial    
statements.                                                                     

Results of Operations                                                           

AMERECO, Inc. (the "Company") was originally incorporated as Norcal Chemical    
Corporation on October 16, 1974.  In January  and April 1986,  respectively,    
the Company acquired a lightweight  aggregate facility and a sand and gravel    
property.   The business of the  Company has been to manage the subsidiary's    
refurbishment and  start-up of the lightweight aggregate  facility operation    
including  manufacturing  and  marketing  of lightweight  aggregate  used in    
concrete block, pre-stressed  and pre-cast  concrete,  structural  concrete,    
bridge floors, highway surfaces and other uses.                                 

Year Ended December 31, 1996, as Compared to Year Ended December 31, 1995       

AMERECO  consolidated  with  its   subsidiary,  ORI,  recognized  losses  of    
$2,176,396 in 1996  compared to $1,157,693 in 1995.  This increase in losses    
was primarily  attributed  to the write-off  of $831,309 in organization and    
loan costs with  the conversion of all the limited partnership interest into    
shares of common  stock of the Company.  In addition, the accounting  change    
from FIFO  to LIFO  increased  cost of  sales by  $292,032  for  1996.   The    
Company's sales  increased  $1.7 million  in 1996  or a  130% increase.  The    
Company  anticipates the loss from operations to decline  substantially both    
from continued increase in sales volume  and from operations of ORI and from    
anticipated  reduction of  production costs  on a  per unit  basis due  from    
better efficiency and longer run times of production.                           

General and administrative  cost increased  by 28% from  $101,463 in 1995 to    
$130,173 in 1996.  The increase was due  to the establishment  of a  $32,146    
reserve to allow for doubtful accounts of ORI's trade receivables in 1996.      

Prior to the conversion, Georgia Resources,Inc. did  not exercise its  right    
for payment of interest  for the continued benefit  of the Partnership.  The    
accrued interest of $91,253 through the date of conversion was forgiven.        

During the  current year  interest expense  decreased by 25%  as a result of    
principal payments  and conversion  of debt  to an equity investment  in the    
Company's Common Stock.                                                         

Seasonal Effect on Operations                                                   

Due to the Company's  relatively brief  operating  history, the  Company has    
minimal historical data to calculate the seasonal effect  on sales and prod-    
uction. With regard to the ORI  operation, it  can be  expected  that  sales    
will experience some decline in growth of aggregate  demand due  to  weather    
conditions and holiday periods.  The primary months which are expected to be    
affected  by possible  seasonality  in the Company's  business are  November    
through February, traditionally  slow months  for the construction materials    
industry in general.                                                            

Liquidity and Capital Resources                                                 

The Company  had  total  assets  of $17,139,244  at December  31, 1996,  and    
$16,216,276 at December 31, 1995. The Company's cash balance at year-end was    
$39,040.  With no  material  change in cash  between years, the  increase in    
working  capital was  primarily a result  of inventories  increasing approx-    
imately $400,000.                                                               

The Company had only long-term debt obligations of $116,559 at December  31,    
1996.  The  long-term  debt  obligation  at December  31, 1995, for ORI  was    
$2,300,000.  The decrease  in long-term debt  was due primarily  to all term    
debt now being classified as a current liability.  Part of  the increase  in    
current debt was related party indebtedness.  See "Certain Relationships and    
Related  Transactions."   On April 18, 1997  the Company  completed debt re-    
financing with First Federal  Savings Bank  of Southwest Georgia.   The term    
loan is for 15 years for  $5,000,000  with monthly  amortization  of $54,713    
principal and interest  with  the  interest  rate adjusted  quarterly  based    
on a weighted average Bond Equivalent Rate during the prior quarter.            

The Company  has a  loss carry  forward of  $9,177,269, which may be used to    
offset  future taxable  income  until 2011.  The deferred  tax asset  is not    
reflected in  the Company's financial statements,  since realization  of any    
benefit is not assured in view of the Company's operating history.              

ITEM 7.  Financial Statements                                                   

See pages F-1 through F-7 for this information.                                 

Index to Financial Statements       
Amereco, Inc.       

                                                        Page

Independent Auditors Report                                        F-2          

Consolidated Balance Sheet as of December 31, 1996                 F-3          

Statements of Operations for the Years                                          
Ended December 31, 1996 and 1995                                F-4       

Consolidated Statements of Changes in Stockholders'                             
Equity for the Years Ended December 31, 1996 and 1995           F-5       

Statements of Cash Flows for the Years                                          
Ended December 31, 1996 and 1995                                F-6       

Notes to Financial Statements                                      F-7          

Schedules to the financial statements are omitted as the required information   
is inapplicable or presented in the financial statements or related notes.      

ITEM 8.  Changes In and Disagreements  With  Accountants  on Accounting  and    
Financial Disclosures                                         

The Company's  Board of Directors  has engaged the accounting  firm of Mason    
Russell  West, LLC  as independent  certified  public  accountants  for  the    
Company for the fiscal year ended December 31, 1996.  The Company's Board of    
Directors made the decision to engage Mason Russell West, LLC based upon the    
recommendation of  management  and after  selection of  such accountants was    
ratified by vote of the Company's  shareholders at the  annual meeting.  The    
Company has no audit or similar committee.  The Company did not consult with    
Mason Russell West,LLC. with regard to any matter concerning the application    
of accounting principles to any specific  transaction,  either  contemplated    
or proposed, or to the type of audit opinion  that  might be  rendered  with    
regard to  the Company's  financial  statements  included with  this Report.    
There  have  been no  disagreements  concerning  any  matter  of  accounting    
principle or  financial  statement  disclosure  between the  Company and its    
independent accountants of the type requiring disclosure hereunder.             

PART III                                                                        

ITEM 9.  Directors, Executive Officers and Compliance  with Section 16(a) of    
the Exchange Act                                              

The following table sets forth the names and ages of the Company's directors    
and executive  officers and  the positions they  held with the Company as of    
December 31, 1996.  All  directors  are  elected at  the annual  meeting  of    
shareholders to  serve one year or  until their  successors are  elected and    
qualified.   Vacancies  on the  Board which  occur in  the  interim  between    
meetings of the Company's shareholders may be filled by vote  of the remain-    
ing directors.  The executive  officers of the Company are elected annually,    
and serve  at the  discretion  of the  Board  of Directors.  Each  executive    
officer of the Company holds office  until a successor  is duly  elected and    
qualified, death or  resignation or  removal in the  manner provided  by the    
Company's Bylaws.                                                               

                                                      Director
Name                      Age   Position                        Since           

Steven H. Miller          47    President, Chief Executive                      
                    Officer and Director            8/88

Kenneth W. Tribbey        49    Executive Vice President,                       
        Chief Financial Officer,
    Assistant Secretary,
                    Treasurer and Director          8/88

Frederick V. Miale, Jr.*  44    Director and Secretary          6/96            

James E. Waldrop *        50    Director and Assistant                          
                    Secretary                       6/96

Michael E. Dee *          44    Director and Assistant                          
                    Secretary                       6/96

*    Effective February 26, 1997, Messrs.  Miale, Waldrop  and Dee simultan-    
 eously tendered  their resignations as  directors and  officers of both
 the Company  and ORI, to  facilitate the  deliberation  of the Board of
 Directors on transactions  involving the shareholders  which had nomin-
 ated such directors to the Board. The remaining Directors elected Craig
 Gunter, former President of the Company and a director until June 1996,
 to hold the position until the next annual meeting.  Mr. Gunter resumed
service on the Board of Directors on February 28, 1997.               

No director  serves  as a  member  of the  board  of directors  of any other    
company  that  has a  class of  securities  registered under  the Securities    
Exchange Act of 1934 or which is registered as  an investment  company under    
the  Investment  Company  Act of  1940.  There are  no family  relationships    
between  any  of  the  directors  and  executive  officers.   There  was  no    
arrangement or  understanding between  any executive  officer and  any other    
person pursuant to  which any  person was selected  as an executive officer.    

Messrs. Miale, Waldrop and Dee were recommended to the Board of Directors by    
Georgia Resources, Inc. and C.I.S. Resources,L.L.C., and at the time of such    
nominations all  such persons  were employed  by firms under  common control    
with GRI and CIS, but did not  serve as officers  or directors  of either of    
them.                                                                           

Biographical Information                                                        

Steven H. Miller.  Mr. Miller  has been  the President  and Chief  Executive    
Officer of the  Company and a member  of its Board of Directors since August    
1988, and  has  served  as President  and  Chief  Executive  Officer  of the    
Company's  wholly  owned  subsidiary,  Omnivest  Resources, Inc., a  Georgia    
corporation, since such corporation's formation in June 1996. Mr. Miller has    
been licensed to practice law in the state of Colorado since 1975. From 1981    
until 1988, Mr. Miller  was president  and a  director  of TREK  Exploration    
Company, a Colorado  corporation  involved in oil  and gas  exploration  and    
operations.  From 1970  to 1981 Mr. Miller was employed in various positions    
of increasing  responsibility  with  The Gates Rubber Company, a diversified    
company with annual sales internationally in excess of $1 billion. Positions    
held included:  Senior Financial  Analyst; Manager  of  Corporate  Financial    
Services;  House  Counsel and  Assistant Secretary, Labor  Counsel; Director    
of  Corporate Employee Relations; Plant Superintendent - Wrapped  Hose Prod-    
ucts Division.  Mr. Miller has been an officer, director and co-owner, since    
December 1986, of Ventures Plus, Inc., a Colorado  corporation.   Until June    
1996,  Mr. Miller  was a  member  of the  management  committee  of Omnilite    
Resources Limited  Liability Company,  a Colorado limited liability company,    
formerly the special limited partner of  Omnivest Resources, L.P., a Georgia    
limited  partnership.   The Company  was the  managing  general  partner  of    
Omnivest Resources, L.P.  Since 1988, Mr. Miller  has been  a member of  the    
executive committee of The MidCities Company, a Colorado general partnership    
engaged in the  development  of residential,  commercial and retail property    
in Boulder, Colorado.  Mr. Miller  received a  Bachelor of Science degree in    
Business Administration from the University of Colorado in  Boulder,Colorado    
in 1971 and  Juris Doctorate degree  in 1974  from the University of Denver,    
College of Law, Denver, Colorado.  See "CERTAIN  RELATIONSHIPS  AND  RELATED    
TRANSACTIONS."                                                                  

Kenneth W. Tribbey.   Mr. Tribbey has  been Executive Vice President,  Chief    
Financial Officer, Treasurer, Assistant Secretary  and a member of the Board    
of Directors  of the  Company  since  August  1988, and has  served  in such    
positions in the Company's ORI subsidiary since that corporation's formation    
in June 1996.  Until June 1996, Mr. Tribbey has been a member of the manage-    
ment committee of Omnilite Resources Limited  Liability  Company, a Colorado    
limited liability company, which was the special limited partner of Omnivest    
Resources, L.P.,  a Georgia  limited partnership.  From  1982 to  1988,  Mr.    
Tribbey served as executive vice president of finance and treasurer of  TREK    
Exploration Company,  Englewood,  Colorado. Mr. Tribbey has been a certified    
public accountant in the state of  Colorado since 1976. Mr. Tribbey received    
his B.S./B.A. degree  in Accounting  from the University  of Denver, Denver,    
Colorado in 1974.  From 1974 to 1977, he  was  an  accountant  with  Siecke,    
Newman & Company,  certified  public accountants, Denver, Colorado, where he    
was  involved  with  audits  of small  to medium-sized  public  and  private    
companies.  From  1977  to  1982,  Mr. Tribbey  was  president  of  Tribbey,    
Almirall, Inc.,  certified  public accountants located  in Denver, Colorado,    
where he was primarily  involved with closely held corporations  and  public    
reporting companies engaged in the construction, oil and gas,  manufacturing    
and distribution industries. Mr. Tribbey  has been  an officer, director and    
co-owner  of Ventures Plus, Inc.,  a Colorado  corporation,  since 1986  and    
serves as a member of the executive committee of The MidCities Company since    
1988.  See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."                    

Frederick V. Miale, Jr.  Mr. Miale served as a director and secretary of the    
Company from June 18, 1996 to February 26, 1997. Mr. Miale resigned from the    
Board of Directors  to facilitate  its review  of transactions involving his    
former employer.  Mr. Miale graduated  with  highest  distinction  from  the    
University  of  Rhode  Island, and  has attended  graduate  college  at  the    
University of Colorado at Boulder, completing three years toward a Master of    
Arts degree.  Mr. Miale is a Certified Financial Planner.   Mr. Miale is the    
founder  and currently  serves  as the  Chief Executive Officer  of Omnivest    
Financial Services Network, Inc.,and is President and a director of Omnivest    
International, Inc.  and Omnivest  Americas, Inc.   In  addition,  Mr. Miale    
serves as a  director of  America's Steak Experts, Inc.,  Omnivest Inc., PSF    
Limited Liability Company, Omnivest Realty, Inc., OP International SA de CV,    
and Omnivest  Asia-Pacific, Inc.  Mr. Miale was recommended  to the Board of    
Directors for nomination as a Director by Georgia Resources, Inc. and C.I.S.    
Resources, L.L.C., which in the aggregate hold 3,068,631 shares,  comprising    
63.61% of the currently outstanding common stock of the Company.   Mr. Miale    
is not  presently  a shareholder,  member,  director,  or officer  of either    
C.I.S.Resources, L.L.C. or Georgia Resources, Inc. and is no longer a share-    
holder, officer, director or employee  of the former Omnivest International,    
Inc. which is now named Cathay Global Investments, Inc.  See "CERTAIN RELAT-    
IONSHIPS AND RELATED TRANSACTIONS."                                             

James E. Waldrop.   Mr. Waldrop served as a director and assistant secretary    
of the Company from June 18, 1996 to February 26, 1997. Mr. Waldrop resigned    
from the  Board of  Directors  to facilitate  Board  review  of transactions    
involving entities in common control with his employer. Mr. Waldrop attended    
Miami University(of Ohio), receiving a Bachelor of Science degree in systems    
analysis in 1968. Later, Mr. Waldrop  earned a Masters  in Business Adminis-    
tration from the University of Colorado in 1975, having been selected as the    
1975 Outstanding Information Systems Graduate Student by the Denver  Chapter    
of the Society  of Management  Information Systems.  After  graduation  from    
Miami University, Mr. Waldrop  was an  officer  in  the  United  States  Air    
Force on active  duty until 1975. Thereafter, Mr. Waldrop was employed  as a    
management systems analyst with TRW, Inc. in Redondo Beach, California. From    
1976 to 1980,  Mr. Waldrop was Manager of Application Systems for KN Energy,    
an  oil  and gas  exploration  and pipeline  transmission  firm  in  Denver,    
Colorado.  Thereafter, Mr. Waldrop was Director of Information  Systems  for    
Hamilton Oil  Corporation  in Denver, Colorado.  From 1984  until 1994,  Mr.    
Waldrop held a variety of increasingly  responsible positions  in Pulte Home    
Corporation.  In 1987 he  became President  of ICM  Mortgage  Corporation, a    
mortgage bank  wholly owned by Pulte Home Corporation.  In 1991, Mr. Waldrop    
was promoted to Division President of one of that corporation's  residential    
construction  divisions.  In 1994, Mr.Waldrop joined Omnivest International,    
Inc. as  Executive Vice President and  Chief Operating Officer.  Mr. Waldrop    
is a  retired  U.S. Air Force Reserve Officer, holding the permanent rank of    
Lieutenant Colonel.  Since 1988,  Mr.Waldrop has served on the University of    
Colorado  at Colorado Springs School  of Business  Advisory  Council.  Since    
1989,  he  has  also  served  on  the President's  Advisory Council of Miami    
University of Ohio.  Mr. Waldrop was recommended  to the Board of  Directors    
for nomination as a Director by Georgia Resources,Inc. and C.I.S. Resources,    
L.L.C., which in the aggregate  hold 3,068,631 shares,  comprising 63.61% of    
the currently outstanding common stock of the Company.  Mr. Waldrop  was not    
at the time of his election a shareholder, member,  director, or  officer of    
either C.I.S. Resources, L.L.C. or Georgia  Resources, Inc.  Mr. Waldrop was    
employed by a firm which is in common control with CIS and GRI. See "CERTAIN    
RELATIONSHIPS AND RELATED TRANSACTIONS."                                        

Michael E. Dee.  Mr. Dee served as a director and assistant secretary of the    
Company  from June 18, 1996 to February 26, 1997.  Mr. Dee resigned from the    
Board of  Directors to  facilitate  Board review  of transactions  involving    
entities in common control  with his employer.  Mr. Dee received  a Bachelor    
of Science  degree, with  a major  in  accounting, from  the  University  of    
Colorado, Boulder, in 1973.  Upon graduation, Mr. Dee joined Arthur Andersen    
& Co.'s Audit Division in Denver, Colorado as a staff auditor, and was later    
promoted  to Audit Senior and Manager.   Mr. Dee  became  a Certified Public    
Accountant  in 1976.  In 1979, Mr.Dee joined  Hamilton Brothers Oil Company,    
Denver, Colorado  as Controller  of its  crude  oil and  petroleum  products    
trading and  reselling subsidiary.  In 1981, Mr. Dee founded, with two other    
individuals,  Crestone  Energy  Corporation, a  privately  held  oil and gas    
exploration  company  in  Denver,  Colorado.    Mr. Dee served as that corp-    
oration's Vice President of Finance until sale of his  interest  in the firm    
in 1983.  In 1983,  Mr. Dee joined Pulte Home Corporation  as Controller and    
Secretary  of its  mortgage banking  subsidiary  ICM  Mortgage  Corporation,    
headquartered  in Greenwood  Village, Colorado.  Later, Mr. Dee was promoted    
to Senior Vice President of  Finance and Chief Financial  Officer and Senior    
Vice President - Operations.   Mr.Dee  served  as a  member  of ICM Mortgage    
Corporation's Executive Committee.  In 1995, Mr.Dee  joined Omnivest  Inter-    
national, Inc. as Senior Vice President of Finance.  Mr. Dee is a member  of    
the American Institute  of CPA's and the Colorado Society of CPA's.  Mr. Dee    
was recommended to the Board of Directors  for nomination  as a Director  by    
Georgia Resources, Inc. and C.I.S.Resources, L.L.C.,  which in the aggregate    
hold 3,068,631 shares, comprising 63.61% of the currently outstanding common    
stock  of the  Company.  Mr. Dee is not presently  a shareholder,  director,    
or officer of either C.I.S. Resources,L.L.C. or Georgia Resources, Inc.  Mr.    
Dee is employed by a firm which is in common control with CIS and GRI.   See    
"CERTAIN RELATIONSHIPS  AND RELATED TRANSACTIONS."                              

Board of Director Appointment February 28, 1997                                 

Craig E. Gunter. Mr.Gunter has served as a director since February 28, 1997.    
Previously, he served as a member  of the Company's Board of Directors  from    
November 1984 to June 28, 1996,and as president from November 1984 to August    
1988. Mr. Gunter is an owner,director and corporate secretary of A&T Produc-    
tion,Inc.,Denver, Colorado, and has been employed with that company in those    
positions  since March 1986.  A&T Production, Inc. is engaged in oil and gas    
exploration. From February 1980 to March 1984,Mr.Gunter was self-employed as    
a consulting geologist in Aurora, Colorado.  Upon resignation  of the  above    
Directors, Mr. Gunter was elected by the then remaining members of the Board    
of Directors, and resumes services  as a director  on February 28, 1997,  to    
serve until  the election  and qualification  of his  successor or  the next    
annual  meeting  of  shareholders.   Mr. Gunter's  share  ownership  is  not    
reflected in the chart of beneficial ownership  as of December 31, 1996, be-    
cause he  was not  then a director.   Mr. Gunter holds  28,700 shares of the    
Common Stock of the Company.                                                    

Compliance with Section 16(a) of the Securities Exchange Act of 1934.           

Section 16(a) of the Securities Exchange Act of 1934 requires  the Company's    
officers  and directors  and persons  who own  10% or more  of the Company's    
common stock, to file reports of ownership and changes in ownership with the    
Securities and  Exchange Commission ("SEC").  Officers, directors and stock-    
holders owning 10% or more of the Company's common stock are required by SEC    
regulations to furnish  the Company with  copies of all  Section 16(a) forms    
that they file.                                                                 

Based solely on review of the copies of such Forms furnished to the Company,    
or written representations that no Forms 5 were required to be filed by such    
persons, the Company believes that with respect to the Company's fiscal year    
ended December 31, 1996,  all Section 16(a) filing  requirements  applicable    
to its officers, directors and persons  who own 10% or more of the Company's    
common stock  have been  complied with, although  several  of such  persons'    
filings were not timely filed.                                                  

ITEM 10. Executive Compensation                                                 

The table  set  forth  below  shows  certain  compensation  information  for    
services rendered  in all  capacities  during the stated  fiscal years ended    
December 31,  by Steven H. Miller,  the Chief Executive Officer, and Kenneth    
W. Tribbey, Executive Vice President and  Chief Financial Officer.  No other    
executive  officer  has  salary  and  bonus  which  in fiscal  1996 exceeded    
$100,000. This information includes the dollar value of base salaries, bonus    
awards, the number of stock options granted  and certain other compensation,    
if any, whether paid or deferred.                                               

Summary Compensation Table          

Annual Compensation 
Name and                                                  Other Annual          
Principal                                                 Compensation          
Position                  Year      Salary       Bonus(s)        $              

Steven H. Miller          1994     $120,000       None         None             
President and Chief      *1995     $120,000       None         None             
Executive Officer        *1996     $120,000       None         None             

Kenneth W. Tribbey        1994     $120,000       None         None             
Executive Vice           *1995     $120,000       None         None             
President/Chief          *1996     $120,000       None         None             
Financial Officer/                                                              
Assistant Secretary                                                             
and Treasurer                                                                   

Long-Term Compensation Awards       

                          Restricted               Payouts       Other
Name and                         Stock                   LTIP        Compen-    
Principal                       Award(s)     Options/   Payouts      sation     
Position                Year       $         SARs(#)       $            $       

Steven H. Miller        1994     None         None       None          $ _      
President and Chief    *1995     None       150,000      None            _      
Executive Officer      *1996     None         None       None            _      

Kenneth W. Tribbey      1994     None         None       None          $ _      
Executive Vice         *1995     None       150,000      None            _      
President/Chief        *1996     None         None       None            _      
Financial Officer/                                                              
Assistant Secretary                                                             
and Treasurer                                                                   

* Salaries from  1995 and  1996 totalling  $90,000, divided  equally between    
Messrs. Miller  and Tribbey, have been accrued  for future payment  by the  
Company.                                                                    

Subject  to  any  changes which may be made  by  the  Board  of Directors in    
the future, the contemplated cash remuneration to be paid to  Mr. Miller and    
Mr. Tribbey, as executive officers of  the Company,  during  the fiscal year    
ending December  31, 1997, except as noted below,  is approximately the same    
as that paid during the fiscal year  ended December 31, 1996.                   

Indebtedness  of the Company to Messrs. Miller  and Tribbey  for $400,000 in    
unpaid compensation  was forgiven  in January 1996.  Subsequently, in  March    
1997, Messrs. Miller and Tribbey  agreed to subordinate receipt  of any pay-    
ments in respect  to approximately $425,000  in unpaid compensation prior to    
January 1995, until  repayment of  the Company's  obligations  under related    
party indebtedness to one or more entities affiliated  with Mr. Wei-Ming Lu.    
Payment of  the pre-1995  unpaid salaries  cannot begin  until ORI  produces    
profits under a  specified formula  and then  payments  will occur  in equal    
installments over the succeeding 36 months.  In addition, when  all salaries    
have been paid in respect to 1995, 1996 and through the current date and all    
money advanced  by Messrs.  Miller and  Tribbey  have been  repaid,  Messrs.    
Tribbey and Miller  have agreed to  defer one-third  of their monthly salary    
until ORI produces  profits under  the same  formula as  stated provided the    
Company has  sufficient  working capital.  Such  compromise  of  claims  and    
deferral  of payment  of previously unpaid  salaries may  have a detrimental    
effect upon the Company's  ability to retain the  services of such officers,    
but has been  required by  the related party  lender as  a condition  of the    
credit facility.                                                                

Options Grants in the Last Fiscal Year                                          

No stock options  were granted  to an officer  of the Company  during fiscal    
year ended 1996.                                                                

Set forth below is information  with respect  to the  unexercised options to    
purchase the  Company's  common stock  granted  during  fiscal  years  ended    
December 31, 1992 and 1995, held by Messrs.  Steven H. Miller and Kenneth W.    
Tribbey at December 31, 1996.                                                   

Aggregate Option Exercises in Last Fiscal Year                
and FY-End Option Values                
                                                    Value of
                                                     Unexer-
                                     Number of       cised
                                       Unexer-       In-the-
                                       cised         Money
                                       Options       Options
                                        at            at
                                        FY-End        FY-End
           Shares                      (#)           ($)
           Acquired                    Exer-         Exer-
                on         Value        cisable/      cisable/
             Exercise     Realized       Unexer-       Unexer-
Name                     (#)          ($)         cisable       cisable         

Steven H. Miller          _            _        350,000/0       0/0(1)          

Kenneth W. Tribbey        _            _        350,000/0       0/0(1)          

(1)At December 31, 1996, there was limited market  for the  Company's common    
stock; and, accordingly, options held  by the named  officers have no  value    
and are not in-the-money.                                                       

All of the options heretofore granted to Messrs. Miller and Tribbey, and all    
shares  currently held  of record  by either  of them  have been  pledged to    
secure indebtedness of the Company to one or more related parties controlled    
by Mr. Wei-Ming Lu.  Such pledge of options and shares may be detrimental to    
the incentives  to enhance Company  performance  normally  considered  to be    
achieved by the  grant of employee  stock options, but has  been required by    
the related party lender as a condition of the credit facility.                 

Compensation of Directors                                                       

The Company  has  made  no  cash  compensation  to its  directors  for their    
services in such capacity, but such individuals are  reimbursed for expenses    
incurred related to attendance at meetings of the Board of Directors.           

ITEM 11.  Security Ownership of Certain Beneficial Owners and Management        

The following  table  sets  forth  as of  December 31, 1996,  the  names and    
addresses of each person known by the Company to own  beneficially more than    
5% of the Company's outstanding common stock and  the percentage owned based    
on the total number of shares of common stock outstanding and vested options    
as of such date.  The table also  lists beneficial ownership of common stock    
by each of  the named executive officers and directors  and by all directors    
and officers  as a group.  Except as  otherwise indicated,  each stockholder    
listed below  has sole  voting and  investment power  with respect to shares    
beneficially owned by it, him or her.                                           

                        Amount and       Percent of Shares
                        Nature of        of Common Stock
Name and Address                   Beneficial        Outstanding and            
of Beneficial Owner                 Ownership        Vested Options(1)          

Steven H. Miller                    449,123 (2)           8.4%                  
9104 North Corral Lane                                                          
Castle Rock, CO 80104                                                           

Kenneth W. Tribbey                  448,679 (3)           8.4%                  
6880 South Pike Place                                                           
Larkspur, CO 80118                                                              

James H. Waldrop                    313,849 (4)           6.1%                  
28318 Targhee Lane                                                              
Evergreen, CO 80438                                                             

Michael E. Dee                      233,729 (5)           4.5%                  
7843 S. Locust Court                                                            
Englewood, CO 80112                                                             

Frederick V. Miale, Jr.             224,062 (6)           4.4%                  
6401 S. Boston St., Unit C-206                                                  
Englewood, CO 80111                                                             

Ventures Plus, Inc.                 897,802 (7)          15.7%                  
680 Atchison Way, Suite 800                                                     
Castle Rock, CO 80104                                                           

All executive officers and        1,196,064 (8)          20.0%                  
directors as a group (5                                                         
persons)                                                                        
----------------               ----------          ----                 

Wei Ming Lu                       3,384,941 (9)          65.0%                  
3898 S. Eagle Street                                                            
Aurora, CO 80014                                                                

Fu-Mei Lu                         3,384,941 (10)         65.0%                  
3898 S. Eagle Street                                                            
Aurora, CO 80014                                                                

Chih-Fen Lu                         897,802 (11)         25.12%                 
13963 E. Grand Ave.                                                             
Aurora, CO 80015                                                                

Chih-Hui Lu                       1,285,172 (12)         25.0%                  
3898 S. Eagle Street                                                            
Aurora, CO 80014                                                                

Earl Wing                         1,293,060 (13)         25.12%                 
13963 E. Grand Ave.                                                             
Aurora, CO 80015                                                                

Georgia Resources, Inc.           2,017,188 (14)         40.28%                 
1401 17th Street, Penthouse                                                     
Denver, CO 80202                                                                

Cathay Global Investments, Inc.     233,729 (15)          4.5%                  
1401 17th Street, Suite 1520                                                    
Denver, CO 80202                                                                

WML Services Corporation          2,250,571 (16)         42.7%                  
1401 17th Street, Penthouse                                                     
Denver, CO 80202                                                                

C.I.S. Resources Limited                                                        
Liability Co.                   1,051,443 (17)         21.0%                
1401 17th Street, Penthouse                                                     
Denver, CO 80202                                                                

Continental Integrated                                                          
Services, Inc.                  1,051,443 (18)         21.0%                
1401 17th Street, Penthouse                                                     
Denver, CO 80202                                                                

Chih-Ru Lu                        1,051,443 (19)         21.0%                  
3898 S. Eagle Street                                                            
Aurora, CO 80014                                                                

Chih-Chi Lu                       1,051,443 (19)         21.0%                  
3898 S. Eagle Street                                                            
Aurora, CO 80014                                                                

Chung-Ching Lu                    1,051,443 (19)         21.0%                  
3898 S. Eagle Street                                                            
Aurora, CO 80014                                                                

Pei-Yu                            1,051,443 (19)         21.0%                  
3898 S. Eagle Street                                                            
Aurora, CO 80014                                                                

(1)   As adjusted for the exercisable options held by identified owner.  See    
  table "Options Exercised in Fiscal Year and Year End Values."   Due to
  aggregation of  interests  held by  related parties  in more  than one
entry, total will exceed 100%.                                      

(2)   Represents 29,869 shares owned  of record and a presently  exercisable    
  option to  purchase up to 200,000  and 150,000 shares  of common stock
  at $4.25 and $1.50 per share, respectively.  Also includes one-half of
  138,508 shares owned beneficially  in the name  of Ventures Plus, Inc.
  Mr. Miller is an officer,director and 50% owner of Ventures Plus, Inc.
  and, therefore,  may be deemed to be a beneficial owner of one-half of
  the shares held by it.  The shares  and options held  of record by Mr.
  Miller have been pledged to secure indebtedness  of the Company to one
or more affiliates of Mr. Wei Ming Lu.                              

(3)   Represents 29,425 shares owned  of record and  a presently exercisable    
  option to purchase up to 200,000 and 150,000 shares of common stock at
  $4.25 and $1.50 per share,  respectively.  Also includes  one-half  of
  138,508 shares owned beneficially  in the name  of Ventures Plus, Inc.
  Mr. Tribbey is an officer,  director and 50% owner  of Ventures  Plus,
  Inc. and, therefore,  may be  deemed to be a beneficial owner  of one-
  half of the shares held by it.  The shares and options held  of record
  by Mr. Tribbey have been pledged to secure indebtedness of the Company
to one or more affiliates of Mr. Wei Ming Lu.                       

(4)   Mr. Waldrop  holds options  to acquire 80,000 shares  of the Company's    
  common stock, with an exercise price  of $4.25 per share.  Mr. Waldrop
  is a  director  of  Cathay  Global  Investments, Inc.  and  is  deemed
  beneficial owner  of the Company's 93,729 shares  of common stock  and
  140,000 options to acquire common stock held by  Cathay Global Invest-
  ments, Inc.  See 15 herein.  No shares are attributed in this chart to
  Mr. Waldrop with respect to share ownership  by entities controlled by
  Mr. Wei Ming Lu as to which Mr. Waldrop is neither a director,managing
member or officer.                                                  

(5)   Mr. Dee holds  no shares or options to acquire shares of the Company's    
  common stock. Mr. Dee is a director of Cathay Global Investments, Inc.
  and is  accordingly  deemed  beneficial owner  of the Company's 93,729
  shares  and 140,000 options  to acquire  common stock  held by  Cathay
  Global Investments, Inc. No shares are attributed in this chart to Mr.
  Dee with respect to share ownership by entities controlled by Mr. Wei-
  Ming Lu  as to which  Mr. Dee is not  a director, managing  member, or
officer.  See 15 herein.                                            

(6)   Represents 10,333 shares of the  Company's common stock  and presently    
  exercisable options  to acquire 60,000 shares of the  Company's common
  stock with an exercise price of $4.25. Mr. Miale until his resignation
  effective  December 31, 1996  was President, Director and a 25% share-
  holder of Cathay Global Investments,Inc.,f/k/a Omnivest International,
  Inc.  and is  accordingly deemed beneficial owner of 93,729 shares and
  60,000 options  to acquire common stock  held by Cathay Global Invest-
  ments, Inc.  Mr. Miale's relationship  with Cathay Global Investments,
  Inc. and Mr.Wei Ming Lu terminated prior to certain transactions which
  are included  in shares attributable  to Messrs. Waldrop  and Dee.  No
  shares are attributed in this chart to Mr. Miale with respect to share
  ownership by  entities controlled  by Mr. Wei Ming Lu as  to which Mr.
  Miale is neither a director, managing member, or officer.   See No. 15
herein.                                                             

(7)   Represents 138,508 shares  beneficially owned  in the name of Ventures    
  Plus, Inc.,  59,294 shares  owned  by Steven H. Miller  and Kenneth W.
  Tribbey and options to purchase up to 700,000 shares,in the aggregate,
  held  by Messrs.  Miller and Tribbey,  which  options are  immediately
  exercisable.  Messrs.  Miller and Tribbey  are the officers, directors
and sole shareholders of Ventures Plus, Inc.                        

(8)   Represents 138,508 shares  beneficially owned  in the name of Ventures    
  Plus, Inc.,  59,294 shares  owned  by Steven H. Miller  and Kenneth W.
  Tribbey, 4,533 shares owned by  Mr. Miale, 93,729 shares  deemed bene-
  ficially owned by  Mr. Waldrop  and Mr. Dee,  and options  to purchase
  up to  900,000 shares, in the  aggregate, held or  deemed beneficially
  owned by Messrs. Miller, Tribbey, Waldrop, Dee and Miale,which options
are immediately exercisable.                                        

(9)   Represents  exercisable  options  to  acquire  60,000  shares  of  the    
  Company's common stock with an exercise price of $4.25 per share. Also
  includes  the following  of which Mr. Wei Ming Lu is deemed beneficial
owner:                                                              

  (A) 2,629 shares owned  by Riverbank Resources, L.L.C. of which Mr. Lu
  has  a  2.9%  ownership interest  in 90,667 shares owned  by Riverbank
Resources, L.L.C.;                                                  

  (B) 1,547 shares owned  by  Cenote L.L.C.  of which Mr. Lu  has a 5.8%
ownership interest in 26,667 shares owned by Cenote L.L.C.;         

  (C) 1,893 shares owned  by  Cenote L.L.C.  of which Omnivest Americas,
  Inc. has  a 7.1%  ownership in  26,667 shares  owned by  Cenote L.L.C.
  which is  owned 100% by Cathay Global Investments, Inc., which in turn
  Mr. Lu has  an 82% voting control through WML Services Corporation and
certain off-shore entities;                                         

  (D) 91,836 shares  owned  by Cathay Global Investments, Inc.  ("CGII")
  which  Mr. Lu  controls  82% of the voting stock  through WML Services
  Corporation  and  certain  off-shore  entities.  CGII  has  options to
  purchase 140,000 shares of the Company's common stock with an exercise
price of $4.25 per share;                                           

  (E) 2,017,188 shares  owned  by Georgia  Resources, Inc.  which Mr. Lu
  controls  by his  100% ownership  of WML Services Corporation  through
certain off-shore entities;                                         

  (F) 1,051,443  shares  owned  by C.I.S.  Resources  Limited  Liability
  Company which  Mr. Lu controls  by reason  of his patriarchal position
  and financial relationships with the Lu Family Investors who own 77.8%
of the equity and who constitute 7 of 9 Directors.                  

  (G) 10,517 shares held  in the name  of his wife Fu-Mei Lu.  Mr. Lu is
deemed beneficial owner by reason of their marital relationship.    

  (H) 7,888 shares held in the name of his daughter Chih-Fen Lu.  Mr. Lu
  is deemed beneficial owner  by reason  of his patriarchal position and
financial relationship.                                             

  The shares  attributed  to Mr. Lu in  this chart  include none  of the
  shares and  options pledged  by Messrs. Miller  and Tribbey  to one or
  more entities controlled by him to secure indebtedness of the Company.
See Notes (2) and (3).                                              

(10)  Represents 10,517  shares owned  by Riverbank Resources, L.L.C.  which    
  Fu-Mei Lu  has an  11.6% ownership interest in 90,667 shares  owned by
  Riverbank Resources, L.L.C.  In addition,  Fu-Mei Lu  is Wei-Ming Lu's
  wife and therefore his ownership is attributable to her. See 9 herein.

(11)  Represents  7,888 shares  owned  by Riverbank Resources, L.L.C.  which    
  Chih-Fen Lu  has  8.7% ownership interest  in  90,667 shares owned  by
  Riverbank Resources, L.L.C.   Chih-Fen Lu is a director of Continental
  Integrated Services, Inc.,  a 99.9% owner of C.I.S. Resources,  L.L.C.
  and therefore all 1,051,443 shares owned  by C.I.S. Resources,  L.L.C.
  is attributed to her.   Chih-Fen Lu is  Earl Wing's wife and therefore
  is beneficial ownership  of his  beneficial  ownership  of CGII 93,729
  shares and 140,000  options to purchase shares of the Company's common
stock, as a director of CGII.                                       

(12)  Chih-Hui Lu is a  Director of  Continental Integrated Services,  Inc.,    
  99.9% owner  of C.I.S. Resources and  therefore  all 1,051,443  shares
  owned  by C.I.S.  Resources  is  attributed  to her.  Chih-Hui Lu is a
  Director  of Cathay  Global Investments, Inc.and is accordingly deemed
  beneficial owner of 93,729 shares of common stock  and 140,000 options
to acquire common stock held by Cathay Global Investments, Inc.     

(13)  Mr. Wing  is  a  Director  of  Cathay  Global  Investments,  Inc.  and    
  therefore,  deemed a  beneficial owner  of 93,729 shares  and  140,000
  options to acquire common stock held by Cathay Global Investments,Inc.
  Chih-Fen Lu  is  Earl Wing's  wife  and  therefore  her  ownership  is
attributable to him.  See No. 11 herein.                            

(14)  Represents 2,017,188 shares  of the Company's common stock received in    
  the business combination of Omnivest Resources, Inc.(formerly Omnivest
  Resources, L.P.)  and the Company.   Georgia Resources, Inc.'s  voting
  stock is controlled 100% by Wei-Ming Lu through WML Services, Inc. and
  certain  off-shore  entities.   Wei-Ming Lu's other interests  are not
  aggregated with  Georgia Resources, Inc.  for purposes  of this chart.
  Subsequent  to December 31, 1996,  Georgia  Resources,Inc. was granted
  500,000  options  in  connection  with a loan  to  the  Company.   See
  "Subsequent  Events."    Subsequent  to  December  31,  1996,  Georgia
  Resources, Inc.  was granted 500,000 options and issued 166,700 shares
  as "arrangement fees" in  connection  with a loan to the Company.  See
"Subsequent Events."  See No. 9 herein.                             

(15)  Represents  91,836  shares  of  common  stock  owned by  Cathay Global    
  Investments, Inc.  and 1,893  shares owned  by Omnivest Americas, Inc.
  which owns 7.1% of Cenote Inc.,  owner of 26,667 shares.  In addition,
  Cathay Global Investments, Inc. has options to purchase 140,000 shares
  of the Company's  common stock  with an  exercise  price of $4.25  per
  share.   Mr. Wei-Ming Lu  controls  Cathay  Global  Investments,  Inc.
  through WML Services, Corporation  and certain off-shore entities. Mr.
  Wei-Ming Lu controls 82%  of the voting stock of Cathay Global Invest-
  ments, Inc. through his ownership of 99.9% of WML Services Corporation
   and is a member of the Board of Directors of Cathay Global Investments,
  Inc.  Mr.Wei-Ming Lu's other  interests are not aggregated with Cathay
  Global Investments, Inc., for purposes  of this chart.   Cathay Global
  Investments, Inc. is included herein  although its  holdings aggregate
  constitute less than 5% of the Company,for reasons of its relationship
to Mr. Wei-Ming Lu.  See No. 9 herein.                              

(16)  Represents  2,017,188  owned  beneficially  through  a 100%  ownership    
  interest  in Georgia Resources, Inc. and 91,836 shares owned by Cathay
  Global Investments, Inc.  which  WML Services Corporation  owns 82% of
  the equity. Also included are 1,547 shares owned through a 5.8% owner-
  ship interest  in Cenote  and 1,893 shares owned  by 100% interest  in
  Omnivest  Americas,Inc. which  in turn owns 7.1% interest  of Cenote's
  26,667 shares.  WML Services Corporation is owned 100% by Mr. Wei-Ming
  Lu through  certain  off-shore  entities.   Mr.  Wei-Ming  Lu's  other
  interests are  not aggregated  with WML Services Corporation, for pur-
poses of this chart.  See No. 9 herein.                             

(17)  Represents 1,051,443 shares owned directly by C.I.S. Resources Limited    
  Liability Company. Mr. Wei-Ming Lu controls C.I.S. Resources by reason
  of his patriarchal position and financial relationship with respect to
  the Lu family  investors  who own 77.8%  of the Continental Integrated
  Services, Inc. which  own 99.7% of  C.I.S. Resources Limited Liability
  Company.  Mr. Wei-Ming Lu's  other interests  are not  aggregated with
  C.I.S. Resources Limited Liability Company,for purposes of this chart.
See No. 9 herein.                                                   

(18)  Represents  1,051,443  shares  of  the  Company's  common stock  owned    
  beneficially by Continental Integrated Services, Inc. through a 99.97%
  ownership interest in C.I.S. Resources Limited Liability Company.  Mr.
  Wei-Ming Lu controls  Continental Integrated Services, Inc.  by reason
  of his patriarchal position and financial relationship with respect to
  the Lu family investors who own 77.8% of the equity. Mr. Wei-Ming Lu's
  other  holdings  are not  aggregated  with the  holdings  of Resources
Limited Liability Company, for purposes of this chart.              

(19)  Chih-Ru Lu, Chih-Chi Lu, Chung-Ching Lu and Pei-Yu  are all beneficial    
  owners  of the Company's common stock due  to their positions  as vice
  presidents  and directors  of Continental  Integrated  Services,  Inc.
  which  owns 99.97% of C.I.S. Resources Limited Liability Company which
owns 1,051,443 shares of common stock in the Company.               

ITEM 12. Certain Relationships and Related Transactions                         

In 1986,  the United States  Bankruptcy Court  for the  Middle  District  of    
Georgia approved the Plan of Reorganization (the"Plan") of Camp Lightweight,    
Inc., a Georgia corporation ("Lightweight"), which provided for the sale  to    
the Company of Lightweight's aggregate  manufacturing assets  and operations    
conducted on a 462-acre parcel located in Clay County, Georgia.The principal    
activities of the Company and its management from  1987  through  1993  were    
involved with complicated legal proceedings with respect to the Plan  in the    
Chapter 11 proceedings, to obtain clear title to Lightweight's assets  which    
would permit  financing  for the  Company's proposed  lightweight  aggregate    
manufacturing operations.                                                       

In February 1993, the  Bankruptcy Court  reaffirmed its 1986 Order approving    
Lightweight's Plan with the result that the Company received  ownership  and    
unencumbered  title to  Lightweight's  aggregate  manufacturing  facilities,    
together with licenses, construction and operating rights,government permits    
and approximately 462 acres of land in Clay County, Georgia.                    

In March 1993,  the Company  formed and  became  the  general  and  managing    
partner of  Omnivest Resources, L.P. ("ORLP" or the"Partnership").  ORLP was    
merged into a wholly owned subsidiary of the Company in June of 1996.   ORLP    
had been  formed  to attract  needed  capital  to refurbish  the lightweight    
aggregate production  facilities  in Clay County, Georgia, to commence manu-    
facturing operations.  The Company  transferred the  aggregate manufacturing    
facilities acquired under the Plan into ORLP.                                   

Under a Management  Agreement, the Company  controlled and  managed ORLP, as    
managing partner.  From 1993  to the  present, the  Company has  managed the    
facilities and operations  of ORLP and its successor ORI  under a Management    
Agreement, which provides for compensation  to the Company  for the services    
of its personnel in management of the manufacturing operations.  The initial    
two year term of the Management Agreement  expired March 31, 1995, and since    
such  time the  Management Agreement  has been  extended under  an automatic    
renewal term on a year by year basis. The Management Agreement permits up to    
48 additional 1-year periods  unless terminated  by the Company or ORI, upon    
30 days' prior written notice.                                                  

The Management Agreement provides  for payment to the Company  of a base fee    
of $20,000  per month.   The  Agreement  entitles  the  Company, as managing    
partner, to a quarterly profit bonus of 4.5% of ORLP's profit,if any, during    
the term of the Agreement.  Mr. Steven H. Miller  and Mr. Kenneth W. Tribbey    
are responsible for the Company's activities under the Management Agreement,    
and, as such, pursuant to their employment contracts, receive the benefit of    
the health, disability and  life insurance  coverage, quarterly profit bonus    
and severance payments under the Agreement at ORI's expense. In the event of    
termination of the Agreement for any reason other than the commission  of an    
intentional felony  by the Company, as manager, or the  Company's removal as    
manager pursuant to the termination provisions  of the Management Agreement,    
the Company is  entitled to the  following severance payments: (1) an amount    
equal to the monthly base management fee  for the preceding six months, plus    
the sum  of the quarterly  performance bonuses earned  during such six-month    
period;and(2) quarterly payments for five years from the date of termination    
equal to  one-half  of the average quarterly  performance bonus  for the two    
quarters prior to the termination.                                              

On March 30, 1993, the  Company and  ORLP  entered  into a  Credit Agreement    
with Omnivest International Financial Services, Inc. ("Omnivest" now "Cathay    
Global  Investments, Inc." or "Cathay"), C.I.S. Resources  Limited Liability    
Company ("CIS")and Georgia Resources, Inc.("GRI")(GRI and CIS, collectively,    
"Lenders").  The Credit Agreement  permitted the Lenders  to convert debt to    
partnership interests, and further permitted the limited partners to convert    
their limited  partnership  interests  into shares  of Common  Stock  of the    
Company.                                                                        

As of December 31, 1994, pursuant to the Credit Agreement, and  a subsequent    
amendment  to the Credit Agreement, the Lenders  had advanced $6.931 million    
to ORLP under  the Credit Agreement.  Those loan  proceeds were  utilized to    
refurbish the aggregate manufacturing facilities contributed  by the Company    
to ORLP in order  to commence  operations.  Substantially  all refurbishment    
activities  were completed  in October  1994 and  the Partnership  commenced    
operations during the fourth quarter of 1994. In addition, GRI had committed    
$1.200 million in working capital funds to ORLP.                                

The loans to ORLP  under the  Credit Agreement  were secured  by all  of the    
assets conveyed by the Company and repayment was guaranteed  by the Company.    
In addition,  the  loans  were  guaranteed  by Messrs. Steven H. Miller  and    
Kenneth W. Tribbey, officers  and directors  of the Company.  Messrs. Miller    
and Tribbey's guarantees  were secured  by the pledge  of 106,520 shares  of    
the Company's shares  beneficially owned  by a company affiliated  with such    
officers, together  with the pledge  of options  previously granted  to such    
officers to purchase a total of 400,000 shares of the Company's common stock.   

Under the Partnership Agreement and  the Credit Agreement, both  as amended,    
the Lenders  were permitted  to convert all, but not less  than all, of  the    
advances to ORLP under the Credit Agreement into a 50.9% Limited Partnership    
Interest for the first $3.996 million and up to an additional 27.67% Limited    
Partnership Interest  if the additional  $3 million provided  by the amended    
Credit Agreement was advanced and converted. As of December 31, 1994, $2.935    
million had been  advanced above  the $3.996 million.  On June 15, 1995, the    
Lenders  converted  $6.931  million in  indebtedness  to  a  78.13%  Limited    
Partnership ownership interest. The lenders did not exercise their right for    
payment of interest  under the Credit Agreement  for the  continued  benefit    
of the Partnership.  The ORLP indebtedness so converted was accounted for as    
a capital contribution.  Conversion of the indebtedness  to limited partner-    
ship interests  occurred  after a  majority  of the  Company's  shareholders    
approved the transfer by the Company of its lightweight aggregate manufactu-    
ring facilities  to ORLP contemplated  by the Partnership Agreement.  At the    
time of such shareholder approval, the Company's shareholders  were informed    
that the  partnership interests were convertible  to shares of the Company's    
Common Stock.                                                                   

Upon the conversion  of the lenders  to Limited Partners  and the additional    
limited partnership interest for the Letter of Credit collateral,the Company    
on June 15, 1995,  reduced its  General Partnership ownership interest  from    
99.9% to 20.02%.  The resulting ORLP partnership equity  increased by $6.931    
million.                                                                        

The Partnership  Agreement, as amended, permitted  the first  $3.996 million    
convertible into 50.9% Limited Partnership Interest  to convert  into a like    
percentage of the restricted Common Stock  of the Company  to be outstanding    
after giving effect to such conversion.   Any additional Limited Partnership    
Interest resulting from the conversion  of advances in excess  of the $3.996    
million (a total of $2.935 million for 27.23% limited  partnership interest)    
was convertible into shares of the Company's restricted Common Stock.           

But for the financing received in connection  with the formation  and subse-    
quent borrowing  activities  of ORLP, the Company  could not  have proceeded    
with refurbishment of its facilities and commencement of the aggregate manu-    
facturing operations.                                                           

On June 15, 1995, the Partnership  consummated a $4.5 million  loan facility    
with a lender unrelated to the Company or any affiliate.   Loans pursuant to    
such credit facility were secured  by all the real, personal  and intangible    
assets of ORLP.  In addition, the Company as General Partner, guaranteed the    
above loan.  As a requirement for the loan, a $1.25 million Letter of Credit    
was obtained from  an affiliate of certain limited partners, for the benefit    
of ORLP.                                                                        

Also in June 1995, WML Services Corporation,which holds interests in several    
of former  limited partners  and is 100% owned  by Mr. Wei-Ming Lu  posted a    
$1.25 million letter of credit as collateral  for indebtedness  of ORLP to a    
third party lender.  As consideration  to GRI  for arranging  such letter of    
credit, an additional 1.75%  limited partnership interest was issued  to GRI    
from the Company.  The Company  issued options  to Omnivest International to    
purchase  up to 400,000 shares  of the Company's common stock exercisable at    
$5.50 per share reduced to $4.25 per share at June 2, 1996. The options were    
granted to  Omnivest International  as compensation for acting as Agent  for    
the Lenders  in connection  with the  Borrowing  by ORLP.   The options  are    
exercisable until December 31, 1999, and were granted after approval  by the    
Company's  shareholders  of  the  transfer  of  the  Company's   lightweight    
aggregate manufacturing facilities and related assets to ORLP. In connection    
with  such approval, the  Company's shareholders were informed regarding the    
contents  of the Partnership Agreement and the proposed options.                

On September 21, 1995, the Company's  Board of  Directors  approved two-year    
employment contracts  with Messrs. Miller  and Tribbey.  The duties, compen-    
sation, bonus calculation, benefits  and severance  under such contracts are    
materially the  same as the  employment agreement  they have  been operating    
under since March 1993.  The Company's Board of Directors  currently antici-    
pates that such agreements  will be renewed automatically  at the expiration    
of the two year term.                                                           

In January 1996 Messrs. Miller and Tribbey forgave $200,000 each of the pre-    
viously unpaid  salary, for the benefit  of the Company  and to  improve its    
balance sheet for purposes of future transactions.                              

Messrs. Miller and Tribbey  have been  employed in their  current capacities    
with the Company since 1988.  For Messrs. Miller's and Tribbey's  successful    
efforts in connection with the Chapter 11 proceedings  and their deferral of    
a subportion  of their  salaries  since 1988, the  Company  granted  200,000    
options each to purchase common stock  of the Company  on November 10, 1992,    
with an exercise price of $5.50 per share, subsequently reduced to $4.25 per    
share, and  exercise  date  prior  to December 31, 1999.   With net  accrued    
salaries still outstanding and no foreseeable means  of payment in  the near    
future, the Company granted additional options to Messrs. Miller and Tribbey    
on October 10, 1995, for 150,000 shares each,with an exercise price of $1.50    
per share and an exercise date on or before December 31, 1999.   All options    
heretofore granted to Messrs. Miller and Tribbey  have been pledged  by such    
officers to secure indebtedness of the Company, with the result that the in-    
centives afforded to such officers by the existence  of the options has been    
substantially diminished.                                                       

Conversion of all  limited partnership interests  into shares  of the Common    
Stock of  the Company  was consummated  on June 1, 1996,  when  the  Company    
completed a  step transaction  in which it  issued 3,677,071  shares  of its    
common stock to the former limited partners of ORLP and received 100% of the    
common stock  of Omnivest  Resources, Inc. (formerly "ORLP"), in  connection    
with a merger of Omnivest Resources with and into ORLP, Inc., a wholly owned    
subsidiary  of the  Company.  The  business  combination  is  reported  as a    
reverse purchase of AMERECO, Inc. by Omnivest Resources, Inc.  Operations of    
Omnivest Resources, Inc. ("ORI") are  reported  for all  periods  presented.    
Operations for AMERECO, Inc. are  reported  from  June 1, 1996, the  reverse    
purchase date,  through December 31, 1996. The Board of Directors determined    
that the  purchase  price  approximated  the fair  value of  the net  assets    
acquired.    See  "Security  Ownership  of  Certain  Beneficial  Owners  and    
Management."                                                                    

On  September  26,  1996  Cathay Global  Investments,  Inc.,  f/k/a Omnivest    
International, Inc. provided  an unsecured loan  to the Company for $350,000    
with the same terms and conditions negotiated  with a third party  on August    
30, 1996.  The term of the loan was 90 days with  a 90 day renewal option at    
an  interest  rate  of 13%  per annum.  The  Company  paid  a non-refundable    
processing fee of 45,918 shares of common stock with 45,918 shares issued on    
the extension date.   The Company repaid  this loan  with proceeds  from its    
borrowings  from First  Federal Savings Bank of  Southwest Georgia  in March    
1997.  Cathay Global Investments, Inc.  is affiliated  with Mr. Wei Ming Lu,    
who beneficially owns approximately 65% of the Common Stock  of the Company.    
At the time  such related  party indebtedness  was approved, Messers. Miale,    
Waldrop and Dee, all nominees of Mr. Lu and his affiliated  entities, served    
on the Board of Directors of the Company.  Their indirect  interests  in the    
transactions were disclosed, and the Board of Directors of the Company,after    
consideration  of the terms  and relative difficulty  in obtaining alternate    
financing determined that such borrowing by the Company was on terms no less    
advantageous  to the Company than  could have  been obtained  from unrelated    
third parties.   Nevertheless, it is  possible that  the Company  could have    
obtained more favorable terms from unrelated third parties, dealing at arms'    
length, had such credit been then available to it.                              

In addition,  Cathay Global  Investments, Inc.  provided additional  working    
capital unsecured loans to bridge the Company's operation  until the pending    
$5,000,000 loan with an FmHa/Rural Development guarantee could be completed.    
Cathay Global Investments, Inc.  advanced an  additional $549,000  unsecured    
between November 29, 1996 and December 30,1996 at an interest rate of 10.25%    
and a maturity date  of March 13, 1997 and $200,000 at such interest, with a    
maturity  date  of  February  28, 1997.  Cathay Global  Investments, Inc  is    
affiliated with Mr. Wei Ming Lu, beneficially owns approximately 65%  of the    
Common Stock of the Company. At the time such related party indebtedness was    
approved, Messrs. Miale, Waldrop  and Dee, all  nominees  of Mr. Lu  and his    
affiliated entities, served on the Board of Directors of the Company.  Their    
indirect interests  in the  transactions were  disclosed, and  the Board  of    
Directors of the  Company, after  consideration  of the  terms and  relative    
difficulty in obtaining alternate financing determined  that such  borrowing    
by the Company was on terms no less advantageous  to the Company  than could    
have been  obtained  from  unrelated  third  parties.   Nevertheless, it  is    
possible that the Company  could have  obtained more  favorable  terms  from    
unrelated third parties, dealing at arms' length, had such credit been  then    
available to it.                                                                

Subsequent to year-end, Cathay Global Investments, Inc. advanced $55,000  on    
January 13, 1997  at the same interest rate  with a  maturity of January 20,    
1997.  Cathay Global Investments, Inc. is  affiliated with  Mr. Wei Ming Lu,    
who beneficially owns approximately 65% of the Common Stock  of the Company.    
At the time such  related party  indebtedness was  approved,  Messrs. Miale,    
Waldrop and Dee, all nominees of Mr. Lu and his affiliated  entities, served    
on the Board of Directors of the Company.  Their indirect  interests  in the    
transactions were disclosed, and the Board of Directors of the Company,after    
consideration  of the terms  and relative difficulty  in obtaining alternate    
financing determined that such borrowing by the Company was on terms no less    
advantageous  to the Company  than could  have been obtained  from unrelated    
third parties.   Nevertheless, it is  possible that  the Company  could have    
obtained more favorable terms from unrelated third parties, dealing at arms'    
length, had such credit been then available to it.                              

On March 17, 1997 VM Mortgage Lending Corporation,  an affiliate  of Georgia    
Resources, Inc.  and Mr. Wei Ming Lu  entered  into  an agreement  with  its    
secured lender to pledge additional Certificates of Deposit up to $1 million    
which the Company could borrow against.   As arrangement fees  in connection    
with such borrowing from such related party, the Company paid an arrangement    
fee of 166,700  shares to  Georgia Resources, Inc. and granted  an option to    
purchase  500,000  shares of the  Company's  common  stock at  $2 per  share    
through March 17, 2002. The shares  issued and  options granted  pursuant to    
the arrangement fee  in respect  of this borrowing  are subject to  one time    
demand and multiple concurrent registration  rights through  March 17, 2002,    
pursuant to  a Registration  Rights Agreement  between GRI  and the Company.    
Further, the loans to the Company by VM Mortgage Corporation were secured by    
the pledge of the Company's shares in its ORI subsidiary. The Company, under    
such agreement, is required to pay the costs of registration,but not selling    
costs. Both Mr. Miller and Mr.Tribbey were required to pledge their AMERECO,    
Inc. common stock as additional requirements of the transaction.In addition,    
such  officers were  required to  subordinate and  defer  payment  of unpaid    
salaries with respect to periods prior to December 31, 1994 of approximately    
$425,000.  In addition Messrs. Miller and Tribbey  agreed to defer one-third    
of their monthly salary until ORI produces profits under a specified formula    
and such  deferral only  occurs after  salaries have been  paid in  full for    
1995, 1996 and through the current date.  Such deferral of payment of earned    
but unpaid  compensation  and deferral  of current  compensation by  Messrs.    
Miller and Tribbey has been required as a condition of the Company's borrow-    
ing from one or  more entities affiliated  with Mr.Wei Ming Lu, who  benefi-    
cially owns approximately 65% of the  Common Stock  of the  Company.  At the    
time such  related party indebtedness  was  approved, Messrs. Miale, Waldrop    
and Dee, nominees of Mr. Lu and his  affiliated  entities, had resigned from    
service on the Company's Board of Directors.  The Board of Directors  of the    
Company, after consideration of the terms and relative difficulty in obtain-    
ing alternate financing determined  that such borrowing  by the  Company was    
on terms no less advantageous to the Company  than could have been  obtained    
from unrelated third parties.  Nevertheless, it is possible that the Company    
could have  obtained  more favorable  terms from  unrelated  third  parties,    
dealing at arms' length, had such credit been then available to it.             

On April 18, 1997  the Company completed  the long awaited  debt refinancing    
with First Federal Savings Bank of Southwest Georgia.  The term loan  is for    
15 years for $5,000,000 with monthly amortization  of $54,713 principal  and    
interest  with  the interest  rate adjusted  quarterly  based on a  weighted    
average Bond Equivalent Rate during the prior quarter.The effective interest    
rate on April 18, 1997 was 10.32%. The collateral for the loan is equipment,    
fixtures, all real property owned  by the Company and a $500,000 Certificate    
of Deposit.  In addition, approximately 80% of the  outstanding indebtedness    
under such loan is guaranteed under a federal rural development program.        

Proceeds from the above loan were used  to retire the outstanding  term loan    
with Congress Financial Corporation ("Congress") in the  remaining amount of    
$1,950,000,  and reduce the  revolving loan  with Congress  from a remaining    
amount of $2,150,000  to $1,100,000,  which continues  to be secured  by the    
guaranty of the Company and all assets  of the Company's  ORI subsidiary not    
pledged or  mortgaged to  First Federal  Savings Bank  of Southwest Georgia,    
including accounts receivable, inventory, as well as the  $1,250,000  Letter    
of Credit pledged by WML Services Corporation, a corporation affiliated with    
Mr. Wei Ming  Lu,  who  is  beneficial  owner  of  approximately 65%  of the    
Company's  Common Stock.   Upon payment  to Congress  of the  term loan, the    
additional $1,000,000 collateral C.D.'s were released back to  V.M. Mortgage    
Lending Corporation, another entity affiliated  with Mr. Wei Ming Lu, who is    
beneficial  owner  of  approximately  65%  of the  Company's  Common  Stock.    
Currently, V.M. Mortgage  Lending  Corporation  or Cathay Global Investment,    
Inc. have the right, but not  the obligation, to acquire  the Company's note    
payable  to Congress.  The Congress  note, under  its most  recent extension    
remains payable in full on June 11, 1997.                                       

The Company is currently finalizing negotiations  with Cathay Global Invest-    
ments, Inc. to renew  and extend the  notes of Cathay, to advance additional    
funds to pay V.M. Mortgage Lending Corporation  and to arrange  for a Letter    
of Credit.  The Company's  Board  of Directors  anticipates a 24 month  note    
with a  nominal interest  rate of  prime plus 2.50%  and an  arrangement fee    
involving issuance  of approximately  307,998 shares  of stock  and grant of    
options to acquire 923,994 additional shares  may be required  to be paid to    
an entity  affiliated  with Mr. Wei-Ming Lu.   Such  shares and  options are    
expected to be subject  to a registration rights agreement  with the Company    
on terms  similar to  those provided  in respect  of the shares  and options    
which constituted an arrangement fee in respect of the March 17, 1997 agree-    
ment with VM.  In addition,it is anticipated that substantial assets  of the    
Company will serve as collateral  to the proposed loan  by Cathay Global, in    
either  a first  or second  position.  The Company's Board  of Directors and    
officers continue to search  for an unrelated party source  for the approxi-    
mately  $2.0  million  which it  requires in  working capital  financing and    
repayment of the Company's note payable to Congress.                            

At various  periods  during  1996 and  through  April 30, 1997, all  as more    
particularly described above, the Company had borrowed from entities related    
to Mr. Wei Ming Lu, the  amounts  set forth  in the following  chart, at the    
stated rates of interest, for the periods stated:                               

PAYMENTS IN RESPECT OF INDEBTEDNESS TO CERTAIN    
RELATED PARTIES     

Borrowed     Stated Rate of       Period       Interest Paid or Accrued and   
Amount         Interest     Outstanding(Mos)     Fees Paid or Payable(1)    

$98,000         10.0%             16.0                  $12,753             

350,000         13.0%              6.5                   27,051             

749,000         10.25%             4.5                   28,592             

1,000,000         Fee(2)             1.0                  166,700(3)            

________          Total                                  $235,096               

(1) The amounts set forth in this chart do not include any amount in respect    
of  the  contemplated  borrowing  described  above  as  to  which  final
documents  have  not been  executed.  Nor does  this  chart  include any
amounts previously paid  in respect  of the letter  of credit  currently
securing the Congress indebtedness, as such payments preceded the period
reflected in this chart.  The interest and fees set forth herein include
not only interest but the amount of arrangement fees paid  or payable to
other affiliates of Mr. Lu.                                             

(2) This item relates  to the pledge of Certificates  of Deposit  by related    
parties, to secure  the Company's indebtedness  to third  party lenders.
There is no stated amount of interest, but arrangement fees were payable
to an affiliate of Mr. Lu, and  are treated  as imputed interest, in the
amount set forth opposite this item.                                    

(3) This represents  issuance of  166,700  shares  of the  Company's  Common    
Stock, valued at $1.00 per share.  No options have been included in this
chart, because the exercise price  of such options  is not  greater than
the fair market value  of the Company's Common Stock  as of the  date of
grant. The book value of the Company's common stock at December 31, 1996
was approximately $2.00 per share and the value per share was discounted
50% due to the current limited market of the Company's common stock.    

When weighed to reflect the amounts paid  in respect  of such  borrowed sums    
for the period borrowed, the unsecured borrowings set forth in the foregoing    
chart reflect an approximate  effective rate  of interest and other  fees of    
34.3% actually paid to parties affiliated with Mr. Wei Ming Lu, who controls    
each of the related party lenders.  The imputed interest and actual interest    
payable  in connection  with the  related  party borrowing  currently  under    
negotiation  is expected to result  in payments  at rates in  excess  of the    
amounts previously paid  in respect  of related party indebtedness.  Certain    
amounts included in the foregoing chart as imputed interest are  not treated    
on the Company's balance sheet as additional interest  when paid, issued  or    
granted to an affiliate in respect  of a  loan from another affiliate of Mr.    
Lu.  Because the Company  has required  such financing and has identified no    
other more favorable  lending transaction, the Company's Board  of Directors    
has approved such transactions as being  in the best interest of the Company    
under the circumstances.  The Board of Directors and the Company's executive    
officers continue to actively seek alternative sources of financing which do    
not involve related parties.                                                    

ITEM 13. Exhibits and Reports on Form 8-K                                       

(a) Financial Statements                                                        
(b) Reports on Form 8-K                                                         
In a report  on Form 8-K dated  June 1, 1996 the  Company  reported  the
Second Amendment to the Limited Partnership Agreement  with ORLP and the
conversion of  Limited  Partnership  interest into  common stock  of the
Company.  The Company also reported on Form 8-K dated  June 28, 1996 the
results of proposals voted on by shareholders at the annual meeting. The
above are summarized in Part III, Item 12 of this report.               

SIGNATURES      

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

AMERECO, INC.     

        By:  /s/  Steven H. Miller
                          Steven  H. Miller, President and
                 Chief Executive Officer
June 6, 1997                                                                    

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.                    

Signature                Title                            Date                  

/s/ Steven H. Miller     President, Chief Executive     June 6, 1997            
Steven H. Miller         Officer and Director                                   

/s/ Kenneth W. Tribbey   Executive Vice President,      June 6, 1997            
Kenneth W. Tribbey       Chief Financial Officer,                               
Chief Accounting Officer,     
Treasurer, Secretary and      
Director                      

/s/ Craig E. Gunter      Director and Assistant         June 6, 1997            
Craig E. Gunter          Secretary                                              

This page intentionally left blank.       

Amereco, Inc.         

Exhibit to Financial Statements         
December 31, 1996       

Amereco, Inc.     

Index to Financial Statements       

                                              Page

Independent Auditor's Report.................................F-2                

Financial Statements                                                            

Consolidated Balance Sheet                                                
as of December 31, 1996...................................F-3             

Statements of Operations                                                  
for the years ended December 31, 1996 and 1995............F-4             

Consolidated Statements of Changes                                        
in Stockholder's Equity for the years ended                               
December 31, 1996 and 1995................................F-5             

Statements of Cash Flows                                                  
for the years ended December 31, 1996 and 1995............F-6             

Notes to Financial Statements.............................F-7             

Independent Auditors' Report              

The Board of Directors                                                          
AMERECO, Inc.                                                                   

We have  audited the  accompanying consolidated  balance  sheet  of AMERECO,    
Inc. (a Utah corporation), and  subsidiary, as of  December 31, 1996,and the    
related statements of operations, consolidated stockholders' equity and cash    
flows for the years ended December 31, 1996 and 1995. These financial state-    
ments 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  signi-    
ficant  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  AMERECO, Inc. and    
subsidiary as of December 31, 1996, and the  results of their operations and    
their cash flows for the two years then  ended, in conformity with generally    
accepted accounting principles.                                                 

As explained in Note 2. to the financial statements,operations are presented    
consolidated  from June 1, 1996 (reverse purchase date) through December 31,    
1996.  January 1, 1996 through May 31, 1996 and 1995 operations  of Omnivest    
Resources, Inc. are presented.                                                  

MASON RUSSELL WEST, LLC                                                         

/s/ Mason Russell West, LLC                                                     

Denver, Colorado                                                                
April 18, 1997                                                                  

AMERECO, Inc.     
Consolidated Balance Sheet        
December 31, 1996       

Assets                                                                          

Current Assets                                                                  
Cash                                                   $39,040              
Accounts receivable - trade, net                       301,038              
Accounts receivable - other                              7,220              
Inventories                                          1,648,387              
Prepaid expenses                                        47,049              
Collateral deposit                                   1,000,000              

Total Current Assets                           3,042,734        

Property, Plant, and Equipment                                                  
Machinery and equipment                             14,330,946              
Office equipment                                       102,396              
Less accumulated depreciation                         (849,546)             
Land and improvements                                  472,757              

Net Property, Plant, and Equipment            14,056,553        

Other Assets                                                                    
Organization and loan costs                             39,957              

Total Other Assets                                39,957        

Total Assets                                 $17,139,244        

See accompanying notes to financial statements.                                 

F-3           

AMERECO, INC.     
Consolidated Balance Sheet        
December 31, 1996       

Liabilities and Stockholders' Equity                                            

Current Liabilities                                                             
Notes payable                                       $3,874,656              
Notes payable - affiliate                            1,197,000              
Accounts payable - trade                               832,960              
Accounts payable - other                                29,168              
Accrued expenses                                       215,657              
Amounts due related entities                           687,525              
Current portion of long-term debt                       60,791              

Total Current Liabilities                      6,897,757        

Long-Term Debt                                           116,559                

Total Liabilities                              7,014,316        

Commitments and contingencies                                  0                

Stockholders' Equity                                                            
Common stock                                             5,008              
Additional paid-in capital                          14,471,031              
Accumulated deficit                                 (4,351,111)             

Total Stockholders' Equity                    10,124,928        

Total Liabilities and Stockholders' Equity   $17,139,244        

See accompanying notes to financial statements                                  

F-3         

AMERECO, Inc.     
Statements of Operations        
For the Years Ended December 31, 1996 and 1995    

                                        1996            1995

Net sales                                     $3,017,182      $1,313,675        
Cost of sales                                  3,412,636       1,431,841        

Gross Profit (Loss)                          (395,454)       (118,166)    

Selling expense                                  529,274         462,988        
Management expense                               140,000         263,361        
General and administrative                       130,173         101,463        

Total Operating Expense                       799,447         827,812     

Loss From Operations                       (1,194,901)       (945,978)    

Other Income (Expenses)                                                         
Interest expense                              (409,620)       (549,740)     
Interest income                                 50,466          28,904      
Miscellaneous income                            14,749          37,036      
Loan fees                                     (429,272)              0      
Gains (losses)on disposal of assets            (28,388)              0      
Intangible assets written off                 (402,037)              0      
Amortization and other                         (33,336)        (86,135)     

 Total Other Income (Expense)          (1,237,438)       (569,935)

Loss Before Extraordinary Item and                                        
Cumulative Effect of Accounting Change    (2,432,339)     (1,515,913)   

Extraordinary item                                91,253         358,220        
Cumulative effect of accounting change           164,690              --        

 Net Loss                             ($2,176,396)    ($1,157,693)

Net Loss Per Share                                                              
Before extraordinary item and cumulative                                    
effect of accounting change                    ($0.74)         ($1.44)    
Extraordinary item                                 .03             .34      
Cumulative effect of accounting change             .05             .00      

 Net Loss Per Share                        ($0.66)         ($1.10)

Weighted average common shares for                                              
computing per share data                     3,302,344       1,050,623      

See accompanying notes to financial statements                                  

F-4   

AMERECO, Inc.     
Consolidated Statements of Changes in Stockholders' Equity        
For the Years Ended December 31, 1996 and 1995      

                          Common Stock
        Issued and Outstanding
                          Shares          Amount

Balance at December 31, 1994             51,216,121      $51,216                
Common stock par value .001                                                 
Authorized 500,000,000 shares                                               

Common stock issued                     1,313,728        1,314              

1:50 reverse split                    (51,479,159)     (51,479)             

After split                             1,050,690        1,051              

Commom stock issued                        37,116           37              

Net Loss - 1995                                --           --              

Balance at December 31, 1995              1,087,806        1,088                

Net Income to May 31, 1996                                                  

Common stock issued to acquire all outstanding                              
shares of Omnivest Resources, Inc. under                                    
conversion option and reverse purchase                                      
May 31, 1996                            3,677,071        3,677              

Issuance of common stock for services                                       
and loan fees                             242,739          243              

Net Loss for the year ended                                                 
December 31, 1996                            --           --            

Balance at December 31, 1996              5,007,616       $5,008                

See accompanying notes to financial statements                                  

F-5 

                       Additional                          Total
                            Paid-In        Accumulated     Shareholders'
                         Capital          Deficit           Equity

Balance at December 31, 1994   $9,875,959     ($6,232,393)      $3,694,782      
Common stock par value .001                                                 
Authorized 500,000,000 shares                                               

Common stock issued              53,792              --           55,106    

1:50 reverse split               51,479              --               --    

After split                   9,981,230      (6,232,393)       3,749,888    

Common stock issued             148,448              --          148,485    

Net Loss - 1995                      --        (768,480)        (768,480)   

Balance at December 31, 1995   10,129,678      (7,000,873)       3,129,893      

Net Income to May 31, 1996                      135,146          135,146    

Common stock issued to acquired all outstanding                             
shares of Omnivest Resources, Inc. under                                    
conversion option and reverse purchase                                      
May 31, 1996                  4,073,924       4,691,012        8,768,613    

Issuance of common stock for                                                
services and loan fees          267,429              --          267,672    

Net Loss for the year ended                                                 
December 31, 1996                          (2,176,396)      (2,176,396) 

Balance at December 31, 1996  $14,471,031     ($4,351,111)     $10,124,928      

See accompanying notes to financial statements                                  

 F-5

AMERECO, Inc. 
Statements of Cash Flow   
For the Years Ended December 31, 1996 and 1995    

                                                     1996           1995
Cash Flow from Operating Activities                                             
 Net loss                                          ($2,176,396)   ($1,157,693)
Adjustments to reconcile net loss to net                                    
cash used in operating activity                                         
Depreciation and amortization                         225,093        295,656
Provision for doubtful accounts                        32,146              0
(Gain)loss on disposal of property                     28,388         86,135
Changes in operating assets and liabilities                                 
  (Increase) decrease in accounts receivable-trade      (2,036)      (501,304)
  (Increase) decrease in inventories                  (427,504)      (728,766)
  (Increase) decrease in prepaid expenses              (17,642)        (2,248)
  (Increase) decrease in other assets                  342,080     (1,339,441)
 Increase (decrease) in notes payable               2,026,955              0
 Increase (decrease) in accounts payable-trade         (2,613)       143,250
 Increase (decrease) in accounts payable-other        641,705              0
  Increase (decrease) in accrued expenses               46,456       (114,587)

Net cash provided (used) by operating                           
         activities                                    716,632     (3,318,998)

Cash Flow from Investing Activities                                             
  Cash payments for the purchase of assets            (624,015)    (1,367,706)
 Cash proceeds from the sale of property               30,000        159,017

Net cash provided (used) by investing activities       (594,015)    (1,208,689) 

Cash Flow from Financing Activities                                             
 Proceeds from issuance of long-term debt             223,372      5,183,691
  Principal payments on long-term debt                (346,023)      (622,281)

Net cash provided (used) by financing                           
        activities                                   (122,651)     4,561,410

Net increase (decrease) in cash and equivalents             (34)        33,723  

Cash and equivalents, beginning of year                  39,074          5,351  

Cash and equivalents, end of year                       $39,040        $39,074  

Supplemental disclosures:                                                       
Non-cash investing and financing activities:                                    
Common stock issued for debt and services            $276,672             $0
Notes payable converted to equity                   2,216,708      6,931,000
Net assets acquired in reverse purchase               739,377              0
  Total Non-cash invest. and financing activities  $3,232,757     $6,931,000

Cash paid for:                                                                  
Interest                                             $552,318       $276,546

See accompanying notes to Financial Statements                                  
F-6   

AMERECO, Inc. 
Notes to Financial Statements   
December 31, 1996   

Note 1:  Summary of Significant Accounting Policies                             

Operations                                                                      

AMERECO, Inc. ("the Company") was organized as a Utah corporation on October    
16, 1974, under the name of Norcal Chemical Corporation.  The Company's name    
was changed to AMERECO, Inc. in June  1995.  In 1986  the  Company  acquired    
through the United  States Bankruptcy Court a lightweight aggregate facility    
located  in  Clay  County, Georgia and  acquired a sand and gravel  property    
in  Columbus, Georgia. In 1988 the Company's current management was elected.    
In April  1992  the  Company sold the non-operating sand and gravel property    
utilizing  the  proceeds  from  the sale  to  retire  indebtedness  owed  to    
creditors of  the Company and  creditors in  the Chapter  11 proceeding.  In    
March 1993 the  Company formed and  became the  General Partner  of Omnivest    
Resources, L.P. ("the Partnership") for  the  purpose  of raising capital or    
financing necessary to refurbish and place into  production the  lightweight    
aggregate facility  in Clay County, Georgia.  The Company transferred to the    
Partnership  all  the  Company's  title  and  interest  in  the  lightweight    
aggregate facility, subject to $311,250 of Company indebtedness, in exchange    
for a 99.9% general partnership interest.  The Company concurrently executed    
a Credit Agreement with  C.I.S. Resources Limited Liability  Company ("CIS")    
and Georgia Resources Inc.("GRI").  The Company  as managing general partner    
of the Partnership, managed the refurbishment of the plant and the operation    
of the lightweight aggregate facility under terms of a management agreement.    

In June 1995 after Company stockholder approval of the transfer of assets to    
the Partnership, CIS and GRI converted the total advanced under  the  Credit    
Agreement into a 78.13% Limited  Partnership interest.  The Partnership then    
consummated a $4.5 million loan facility with an outside lender. The Company    
as General Partner  guaranteed the loan.  As a requirement  for the  loan, a    
$1.25 million Letter of Credit was obtained by GRI for the  benefit  of  the    
Partnership.  As  consideration  to  GRI,  the  Company issued an additional    
1.75%  Limited Partnership  interest to  GRI.  With  the conversion  of  the    
lenders to Limited Partners and the  additional Limited Partnership interest    
for  the  Letter  of Credit as collateral,  the  Company reduced its General    
Partnership  interest from 99.9% to 20.02%.  In addition the Partnership had    
capital requirements of $1.0 million which was funded by sale  of additional    
Limited Partnership interests.  The Company's ownership interest was reduced    
by 1.70% to 18.32%.                                                             

On June 1, 1996, in accordance  with agreements  previously approved  by the    
Company's  shareholders,  the Limited Partners  converted  their  respective    
partnership interests  into shares  of the Company's common stock  through a    
reverse merger purchase transaction in which the business owned assets  were    
placed  in a corporation  (Omnivest Resources, Inc.)  which is now  a wholly    
owned subsidiary of the Company.                                                

Principles of Consolidation                                                     
The consolidated financial statements include the accounts of its 100% owned    
subsidiary,  Omnivest  Resources,  Inc.  All significant intercompany trans-    
actions and balances have been eliminated in consolidation.                     

Cash and Cash Equivalents                                                       
The  company  considers all investments purchased with an  original maturity    
of three months or less to be cash equivalents.                                 

Property and Equipment                                                          
The Company Property  and Equipment  are stated  at cost.  Costs other  than    
machinery and equipment are depreciated using the straight-line method  over    
the estimated useful lives of the assets.Machinery and equipment of Omnivest    
Resources,Inc. are depreciated using the  units-of-production  method.  When    
assets are  retired or  disposed of, all applicable  costs  and  accumulated    
depreciation are retired from the accounts and any resulting gain or loss is    
recognized.                                                                     

Allowance for Uncollectible Accounts                                            
The Company  provides an  allowance for  uncollectible  accounts  based upon    
prior experience and managements assessment of the collectibility  of exist-    
ing specific accounts.                                                          

Income Taxes                                                                    
The Company has adopted the provisions of FASB Statement No. 109 "Accounting    
for  Income  Taxes,"  which  requires  the  asset  and  liability  method of    
accounting for income taxes.                                                    

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    
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  these    
estimates.                                                                      

Inventory                                                                       
Inventory is valued at average cost under the last-in first-out (LIFO)method    
not in excess of market.                                                        

Note 2:  Business Combination                                                   
Effective June 1, 1996, AMERECO, Inc. completed a step transaction  in which    
it issued 3,677,071  shares of  its common  stock valued  at $8,768,613  and    
received 100%  of the  common  stock  of Omnivest  Resources, Inc. (formerly    
Omnivest Resources, L.P.).  The business combination  was accounted for as a    
reverse purchase of AMERECO, Inc. by Omnivest Resources, Inc.  Operations of    
Omnivest Resources, Inc. are reported for all periods presented.  Operations    
for AMERECO,Inc. are reported  from  June 1, 1996  (reverse  purchase  date)    
through December 31, 1996.  The purchase price approximated  the  fair value    
of the net assets acquired resulting in no goodwill.                            

Prior to June 1, 1996,  AMERECO, Inc. reported  its general partner interest    
in Omnivest Resources, L.P. as an equity method investment. At May 31, 1996,    
AMERECO, Inc.'s general  partner investment  in Omnivest Resources, L.P. was    
20.02% and was carried at $3,793,335.  From January 1, 1996 to May 31,  1996    
AMERECO, Inc. equity methods loss was $133,340.                                 

The following pro forma information represents the summarized data as though    
the companies had combined at the beginning of each year presented:             

                                   1996         1995

Net Sales                         $3,017,182    $1,313,675

Loss before extraordinary items                           
and cumulative effect of                                  
accounting change                 $2,063,853    $1,641,978

Net Loss                          $1,807,910    $1,283,758

Net Loss Per Share                $.55          $1.23     

Note 3:  Inventories and Accounting Change                                      
During 1996, the  Company  changed  its  method of  determining the  cost of    
inventory from  First-in,  first-out (FIFO) to the last-in, first-out (LIFO)    
method.  The Company believes  the LIFO method more  closely relates current    
costs  with  current  revenue.   The effect of  the change  was to  increase    
inventories at January 1, 1996 by $164,690.  The effect  on 1995  operations    
would have been to decrease the operating loss by $164,690.                     

Inventories at December 31, 1996 consisted of the following:                    

Raw Materials                     $   47,336    
Aggregate                          1,200,233    
Processed Clay                       297,380    
Spare parts & supplies               103,435    
                              $1,648,387

Note 4:  Property and Equipment                                                 
Depreciation expense for the years ended December 31, 1996  was $225,093 and    
$203,193 for December 31, 1995.                                                 

Note 5:  Notes Payable                                                          
Unaffiliated Notes Payable                                                      
Note payable - Congress Financial Corporation:                                  
The Company has a loan dated June 15, 1995 due                                  
June 15, 1997. The interest rate is prime plus                                  
2.25% which was 10.5% at December 31, 1996.                                     
Principal payments of $25,000 plus interest are                                 
made monthly.  The Loan is secured by all assets                                
owned and hereafter acquired by Omnivest Resources,                             
Inc. and guaranteed by AMERECO, Inc.                       *  $2,300,000        

Note payable - Congress Financial Corporation:                                  
The Company has a revolver line of credit due                                   
June 15, 1997. The interest rate is prime plus                                  
2.25% which was 10.5% at December 31, 1996.                                     
Advances shall not exceed 70% of eligible accounts                              
receivable and 45% of eligible inventory with a                                 
maximum availability reserve of $1.75 million.                                  
Collateral for the loan is all assets owned and                                 
hereafter acquired by Omnivest Resources, Inc.                                  
and guaranteed by AMERECO, Inc.                                 978,048         

Unsecured note due February 26, 1997, interest                                  
rate of 13% per annum                                         *  350,000        

Note payable - unsecured bearing interest rate                                  
of 12% per annum, due August 30, 1996                            100,000        

Note payable, unsecured bearing interest at                                     
13%, due March 31, 1997                                           75,000        

Note payable, unsecured bearing interest at                                     
11%, interest paid semiannually, due April 15, 1997               40,000        

Note payable, unsecured bearing interest at                                     
8%, due December 31, 1996                                         27,712        

Unsecured note due September 8, 1987 interest                                   
rate of 8% per annum                                               3,896        

Total Unaffiliated Notes Payable                              $3,874,656        

Notes Payable to Affiliates                                                     
Unsecured note with affiliate due March 23, 1997,                               
interest rate of 13% per annum                                  $350,000        

Unsecured note with affiliate, interest rate of                                 
10.25% per annum with $200,000 due February 28,                                 
1997 and the balance due March 13, 1997                          749,000        

Unsecured note with affiliate Corporation,                                      
interest rate of 10%, due January 10, 1997                        98,000        

Total Notes Payable to Affiliates                             $1,197,000        

Total Current Notes Payable                                   $5,071,656        

Long Term Debt                                                                  
Note payable - financial institution.  Loan                                     
secured by specific equipment, interest rate                                    
of 10.5% per annum, monthly principal an interest                               
payments of $6,378.50, due August 1, 1999                     $  177,350        
Less Current Portion                                         (60,791)   

Long Term Debt                                            $  116,559    

Notes payable are due the following years:                                      
Year Ending December 31, 1997 (current portion)             $   60,791      
Year Ending December 31, 1998                                   67,491      
Year Ending December 31, 1999                                   49,068      
Total Long Term Debt                                      $  177,350    

*  See Subsequent Event Note 16.                                        

Note 6:  Income Taxes                                                           
The Company has loss carry-forward of $9,177,269 that may be offset against     
future taxable income.  The carry-forward expires in 2011.                      

A deferred tax asset  has not  been reflected  in the  financial statements     
since the realization  of the benefit  is not assured due  to the Company's     
past operating history.                                                         

At December 31, 1996, the Company has net operating loss carry-overs avail-     
able to offset  future federal taxable income, if any.   These amounts will     
expire as follows:                                                              

1999          $  70,991               2006             434,768    
2000            555,816               2007           1,954,098    
2001            288,190               2008             479,243    
2002            394,878               2009             472,027    
2003            346,704               2010             768,480    
2004            568,868               2011           2,176,396    
2005            666,810                                           

Total operating loss carry-forward                      $9,177,269        

The components of the deferred tax asset related to the operating loss          
carry forward are as follows:                                                   

Deferred Tax Asset           $3,120,000       
Less Valuation Allowance     (3,120,000)      
Deferred Tax Asset           $        0       

Note 7:  Stock Options Stockholders Equity                                      
In June 1995  the stockholders of the Company approved  a stock option plan.    
Under the plan, the Board of Directors may grant options for the purchase of    
up to 100,000  common shares.  The options  may be exercisable  for not more    
than ten years  and the  option price  must be  not less  than market value.    
Nonqualified  (non-employees)  may be  granted  options  at an  option price    
determined  by a committee.   During 1995,  22,500 nonqualified options have    
been granted with an exercise price of $4.00 and an expiration year of 2001.    
During 1996,no options were granted or exercised and 40,000 options expired.    

Additionally, the Company granted options to officers, directors  and others    
for their past contributions.  No options have been exercised or are in-the-    
money.  Since the option exercise prices were higher than firm  market value    
at the date of grant no compensation cost is included in operating income.      

The following table represents these options outstanding:                       

                                            Exercise      Expiration
                          Granted          Price          Date

Officers and directors         400,000         $4.25         12/31/99   
                            300,000          1.50         12/31/99
                              2,500          4.00         1/1/2001
                              2,500          4.00         7/1/2001

Others                         400,000          4.25         12/31/99   
                             20,000          4.75         12/31/99
                             17,500          4.00         7/1/2001

Total                        1,142,500                                  

Note 8:   Aggregate Effect of Adjustments                                       
The aggregate effect in  net income for  the fourth quarter  of the year-end    
adjustments was a operating loss of $1,262,042.                                 

Note 9:   Extraordinary Items and Infrequent or Unusual Items                   
Georgia Resources,Inc. did not exercise their right  for payment of interest    
on a loan to ORLP prior to conversion. The principal was converted to common    
stock and the  accrued interest forgiven.  The accrued interest  through the    
date of conversion was $91,253.                                                 

As a result of the reverse  purchase in 1996  and the loan  restructure (See    
Note 16.), organization cost related to the partnership and partnership loan    
fees previously capitalized were written-off to operations.                     

Note 10:   Transactions with Related Parties                                    
The officers  of the Company  have accrued salaries  and expenses  from 1988    
through  1996.   The accrued  salaries  at December 31, 1996  and 1995, were    
$603,144 and $961,544, respectively.                                            

On September 21, 1995, the Company's Board  of Directors approved a two year    
employment contract with two officers.  The duties, compensation, bonus cal-    
culations and benefits are materially the same, except for the two year time    
commitment by all parties, as the employment  agreement they have been oper-    
ating under since March 1993.                                                   

On September 26, 1996 Cathay Global Investments, Inc., f/k/a Omnivest Inter-    
national, Inc. an affiliate of the Company provided an unsecured loan to the    
Company for $350,000  with the same terms  and conditions negotiated  by the    
Company with a third party on August 30, 1996.  The term  of the loan was 90    
days with a 90 day renewal option at an interest rate of 13% per annum.  The    
Company  paid a  non-refundable  processing fee  of 45,918 shares  of common    
stock  with 45,918 shares issued  on the extension date.  The Company repaid    
this loan  with  proceeds  from its  borrowings  from FmHA/Rural Development    
guarantee in April 1997. (See Note No.16.)                                      

In addition,  Cathay Global  Investments, Inc. an  affiliate  of the Company    
provided additional working capital unsecured loans  to bridge the Company's    
operation  until the pending $5,000,000 loan with  an FmHA/Rural Development    
guarantee could be completed.   Cathay Global Investments, Inc.  advanced an    
additional $549,000 unsecured between November 29, 1996 and December 30,1996    
at an  interest rate  of 10.25% and a  maturity date  of March 13, 1997, and    
$200,000 at such interest with a maturity date of February 28, 1997.            

On March 17, 1997 an affiliate of Georgia Resources,Inc. and Mr. Wei-Ming Lu    
entered into  an agreement  with its  secured  lender  to pledge  additional    
C.D.'s up to $1 million which the Company could borrow against.  The Company    
paid an arrangement fee of 166,700 shares  to Georgia Resources, Inc. and an    
option  to purchase 500,000 shares  of the Company's common stock  at $2 per    
share through March 17, 2002. (See Note No. 16.)                                

Note 11:  Significant Concentration                                             
The Company  manufactures and  sells one  product (lightweight aggregate) on    
credit terms to its customers.  Substantially all of the customers are manu-    
facturing or construction entities  located in  the southeast  region of the    
United States.                                                                  

The Company conducts a  substantial portion  of its business  with a certain    
customer.  For the year ended December 31, 1996, revenues from this customer    
amounted to $458,630, or 15.5% of total revenue. The account receivable from    
this customer at December 31, 1996  amounted to  $25,680 or 8%  of the total    
accounts receivable balance.                                                    

Note 12:  Fair Value of Financial Instruments                                   
The estimated  fair  value  of the  Company's  financial  instruments  as of    
December 31, 1996 are as follow:                                                
                                 Carrying           Fair
                                  Amount           Value
Assets                                                              
Cash                                  $39,040        $39,040    
Collateral deposits                $1,000,000     $1,000,000    
Liabilities                                                         
Short term borrowing               $5,071,656     $5,071,656    
Long term debt                       $177,350       $177,350    

Note 13:  Earnings Per Share                                                    
Net loss per common share is computed using  the weighted average  number of    
common shares outstanding.  Outstanding options are not included in the cal-    
culation of net loss per common share since their impact is anti-dilutive.      

Note 14:  Lease Commitments                                                     
The Company rents  office space on a month-to-month basis  located in Castle    
Rock, Colorado.   Rent expense  for the  year ended  December 31,  1996  was    
$31,780.                                                                        

The Company leases certain vehicles  under lease agreements.   The aggregate    
minimum annual  commitment  under the  noncancelable  operating leases  with    
terms of one year or more are as follows for the years ending December 31:      

1997            $ 21,543      
1998              13,960      
1999               2,338      
          $ 37,841

Note 15:  Commitments and Contingencies                                         
The Company's operations  are subject  to various federal,  state, and local    
laws governing protection  of the environment.   These laws  are continually    
changing and, in general,are becoming more restrictive. The Company believes    
that it is in compliance  with all applicable laws and regulations.             

On September 21, 1995, the Company's Board  of Directors approved a two-year    
employment  contract  with two  officers.   The duties, compensation,  bonus    
calculations  and benefits  are materially the same except  for the two-year    
time commitment by all parties as  the employment agreement  they have  been    
operating under since March 1993. Under the agreement,if terminated, the two    
officers would receive approximately $120,000.                                  

The Company  is periodically  a defendant  in legal  proceedings  arising in    
connection with its business. In management's opinion, neither the financial    
position  nor the results  of operations  of the Company will be  materially    
affected by the final outcome of these legal proceedings.                       

Note 16:  Subsequent Event                                                      
On March 17, 1997 VM Mortgage Lending  Corporation, an  affiliate of Georgia    
Resources,Inc.  entered into  an agreement with its secured lender to pledge    
additional Certificates of Deposit up to $1 million, which the Company could    
borrow against.  As arrangement fees in connection with such  borrowing from    
such related party, the Company paid an arrangement fee of 166,700 shares to    
Georgia Resources, Inc. and granted  an option to purchase 500,000 shares of    
the Company's common stock  at $2.00 per share  through March 17, 2002.  The    
shares issued and options granted pursuant to the arrangement fee in respect    
of this borrowing are subject to a  one time demand and  multiple concurrent    
registration rights through March 17,2002, pursuant to a Registration Rights    
Agreement between GRI and the Company.  Further, the loans to the Company by    
VM Mortgage Corporation were secured  by the pledge  of the Company's shares    
in its ORI subsidiary. The Company, under such agreement, is required to pay    
the costs  of registration, but not  selling costs.  Both Mr. Miller and Mr.    
Tribbey pledged their AMERECO, Inc. common stock as additional  requirements    
of the transaction.  In addition, such officers were required to subordinate    
and defer payment of unpaid salaries with respect to periods prior to Decem-    
ber 31,  1994 of  approximately  $425,000.  In addition,  Messrs. Miller and    
Tribbey agreed to defer one-third of their monthly salary until ORI produces    
profits under a  specified formula and  subsequent to 1995, 1996 and through    
the current date salaries have been paid.                                       

On April 18, 1997  the Company  completed  debt  refinancing  with Southwest    
Georgia Bank.  The  term loan  is for 15 years  for $5,000,000  with monthly    
amortization  of $54,713  principal  and  interest  with  the interest  rate    
adjusted quarterly based  on average  Bond Equivalent Rate  during the prior    
quarter.  The effective  interest rate  on April 18, 1997  was 10.32%.   The    
collateral for the  loan is equipment, fixtures, all real property  owned by    
the Company and a $500,000 Certificate of Deposit.                              

Proceeds from the above loan was used to retire the Term loan  with Congress    
Financial Corporation and reduce the revolver to $1,100,000 which will cont-    
inue to be  secured  by all  other  assets  including  accounts  receivable,    
inventory, and $1,250,000  Letter of Credit.  Upon the  payment to  Congress    
Financial  Corporation  the  $1  million  collateral  C.D.'s pledged  by the    
affiliate were released back to V.M. Mortgage Lending.                          

The Company is currently finalizing negations with Cathay Global Investments,   
Inc., an  affiliate, to renew  and extend  the notes  and advance additional    
funds  to consolidate affiliate debt  and to arrange for a letter of credit.    
In addition, an arrangement fee is anticipated similar to the March 17, 1997    
transaction described above.                                                    

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10KSB’ Filing		Date		Other Filings
		3/17/02
		12/31/99
		8/1/99
		12/31/97
Filed on:		7/15/97
		6/15/97
		6/11/97
		6/6/97
		4/30/97		8-K
		4/18/97
		3/23/97
		3/17/97
		3/13/97
		2/28/97
		2/26/97
		1/20/97
		1/13/97
For Period End:		12/31/96		NT 10-K
		11/29/96
		9/26/96
		8/30/96		10QSB
		6/28/96
		6/18/96
		6/2/96
		6/1/96
		5/31/96
		1/1/96
		12/31/95
		10/10/95
		9/21/95
		6/15/95
		5/31/95
		3/31/95
		12/31/94
		3/30/93
		12/31/92
		11/10/92
				List all Filings