UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the quarterly period ended    March 31, 1998

[  ] TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from ________________ to _______________

Commission File No.     33-55254-31

                                  UNIDYN, CORP.
        (Exact name of Small Business Issuer as specified in its charter)

         NEVADA                                        87-0438639
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

         8621 North Seventy Ninth Avenue
         Peoria, Arizona                                         85345
(Address of principal executive offices)                       (Zip Code)


Issuer's telephone number, including area code     (602) 979-2800

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

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

             Class                           Outstanding as of March 31, 1998
------------------------------------      --------------------------------------
$.001 PAR VALUE CLASS A COMMON STOCK                32,000,000 SHARES


                                        1

<PAGE>



ITEM 1.  MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

         THE  FOLLOWING  DISCUSSION  INCLUDES  FORWARD-LOOKING  STATEMENTS  WITH
RESPECT TO THE COMPANY'S FUTURE FINANCIAL PERFORMANCE. ACTUAL RESULTS MAY DIFFER
MATERIALLY  FROM  THOSE  CURRENTLY   ANTICIPATED  AND  FROM  HISTORICAL  RESULTS
DEPENDING UPON A VARIETY OF FACTORS,  INCLUDING  THOSE DESCRIBED BELOW UNDER THE
SUB-HEADING,  "BUSINESS RISKS." SEE ALSO THE COMPANY'S ANNUAL REPORT ON FORM 10K
FOR THE YEAR ENDED DECEMBER 31ST, 1997.

OVERVIEW
         The  Company  was  incorporated  in the  State of Utah in 1986 as Macaw
Capital, Inc. and was reincorporated in 1993 in the State of Nevada. In December
of 1997,  Macaw  Capital,  Inc.  acquired a portion  of the assets of  Universal
Dynamics,  Inc.,  a private  manufacturer  of  environmental  vibration  testing
equipment  formed in December  1989, and was renamed  UniDyn,  Corp. No material
relationship  exists  between  the  former  management  and  directors  of Macaw
Capital,  Inc. and the current management and directors of UniDyn, Corp. UniDyn,
Corp. shares are currently traded under the symbol UNDY on the NASDAQ Electronic
Bulletin Board System.

         Vibration  Stress  Screening (VSS) requires three basic  elements;  the
vibration  hardware  or  "shaker"  unit  which  mechanically  vibrates  the test
platform,  the software  control  system  which  measures  output and  regulates
intensity,  and the amplifier unit which  provides  power to the shaker.  On the
production line, VSS can identify latent defects not readily  identified through
visual inspection or during the development and design process. Vibration Stress
Screening of  electronic  and  mechanical  components,  such as printed  circuit
boards saves rework time during  production,  reduces warranty  exposure and can
enhance  product  quality and  longevity.  VSS is most  effective  in  detecting
intermittent  defects such as loose connections,  broken parts,  cracked traces,
poor  solder  joints and  mechanical  flaws.  As  manufacturers  in a variety of
industry have embraced miniaturization and technological complexity,  demand has
increased for more sophisticated quality control testing factory product.

         The  Company  currently  markets  its  controller   product  under  the
Northstar  brand and to other OEM's to be repackaged  for use in the  aerospace,
automotive and semiconductor  industries.  The Company is also in the process of
filing patents on a new testing process called  Sterling.  The Sterling  process
provides for completely  automated  quality  control  testing of printed circuit
boards.  It is  expected  that the  Sterling  process can  significantly  reduce
warranty  liability  for a variety of  industries,  including  manufacturers  of
computers,  consumer electronic products, and aerospace and military systems, by
anticipating hidden defects.

         To meet the  objectives  of its  business  plan and reach an economy of
scale in the short-term,  the Company has entered into several asset acquisition
agreements. In December of 1997, the Company closed a transaction with Universal
Dynamics,  Inc.  an Arizona  corporation,  for the  transfer  of certain  assets
including  equipment,   inventory,  accounts  receivable,   software  and  other
intangible  assets related to the business of vibration  testing systems.  These
systems are Microsoft  Windows-based  and have been  integrated in the Company's
proprietary control systems software.

                                        2

<PAGE>



         The Company  also  entered into an agreement to acquire an 80% interest
in  Derritron,   a  United  Kingdom  based  manufacturer  of  vibration  testing
equipment.  With this acquisition,  the Company will receive patents,  products,
manufacturing  equipment and an  established  market  presence  internationally.
Derritron is currently 1 of 4 shaker  manufacturers  worldwide and holds patents
on 30 variations of shaker models.

RESULTS OF OPERATIONS
         For the three  months  ending  March 31st,  1998,  the  Company  posted
earnings of $113,158 on revenues of $623,798.  For the three months ending March
31st, 1997, the Company generated no revenues or income. Substantially all sales
were  generated  from the  NorthStar  product.  NorthStar is composed of off the
shelf items and has minimal assembly requirements.

         For the three months ending March 31st, 1998, the Company has filled 73
purchase  orders for Northstar  product ranging in price from $15,000 to $28,000
for both OEM and direct  customers such as FUJITSU,  Ford General Motors,  AT&T,
Donnely,  McDonnell  Douglas,  Kodak, MIT and NASA.  Approximately 440 Northstar
units have been sold to date over the  preceding  two years,  primarily  through
Universal Dynamics, Inc. prior to the December, 1997 asset purchase.

         Sales are subject to  materially  monthly  fluctuations  as the Company
integrates  recent  acquisitions,  modifies  operations,  introduces new product
lines,  and modifies its existing  customer base. There can be no assurance that
the  Company  will  have  the  capital  resources   necessary  to  complete  the
introduction  of the Sterling  Process in a timely manner in accordance with the
Company's business plan.

         Cost of Goods Sold for the three  months  ended March  31st,  1998 were
$186,466 with a resultant gross profit of $437,332.  Gross margin for the period
was in excess of 70%. Until new products are introduced,  including the Sterling
Process,  there is significant  uncertainty  about future gross  margins.  Gross
margin  percentage  is highly  dependent  upon product  prices,  sales  volumes,
materials cost and allocation of manufacturing overhead.

         Selling, General and Administrative costs for the period were $270,124.
The Company  currently employs a total of 34 people in the United States and the
United  Kingdom.  Of those  employed,  approximately  18 are on  contract  lease
agreements.  Management  believes  that by leasing  its primary  workforce,  the
Company has substantially limited fixed overhead costs and provided for a larger
free-cash flow for the Company's growth phase.

         For the three  months  ending  March  31st,  1998 the  majority  of the
Company's  research was conducted at the Company's  Engineering  and Development
Center in American Fork, Utah.  Substantial  research and development costs were
incurred by Universal Dynamics for the development of the Northstar and Sterling
Process products prior to the December, 1997 asset purchase.

LIQUIDITY AND CAPITAL RESOURCES
     The Company is currently  seeking  additional  working  capital to meet its
short  term  growth  planning.  Management  believes,  although  there can be no
assurance,  that the  Company  will have  sufficient  cash needs for the next 12
months regardless of its success in attracting  additional  capital  investment.
However,

                                        3

<PAGE>



management  also  believes that a lack of  additional  working  capital over the
remainder of the current fiscal year would substantially curtail the roll-out of
the Sterling  Process  product  line.  As of the three months ending March 31st,
1998, the Company has approximately $258,079 in working capital.

NEW ACCOUNTING PRONOUNCEMENTS
         The Financial  Accounting  Standards  Board has adopted several notices
with regard to the treatment of interim financial  statements.  These issues are
presented in the Company's  interim  financial  statements.  As discussed in the
notes to the  interim  financial  statements,  the  implementation  of these new
pronouncements  is not  expected  to have a  material  effect  on the  financial
statements.

BUSINESS RISKS
         While  management  believes,  but there can be no  assurance,  that the
Company is sufficiently  capitalized to continue operations for the remainder of
the fiscal year,  management is currently seeking  additional capital investment
to fulfill  inventory  requirements and outstanding  purchase orders which could
have a material impact on short-term growth objectives.

         This  report  contains  a number of  forward-looking  statements  which
reflect the Company's  current views with respect to future events and financial
performance.  These forward-looking  statements are subject to certain risks and
uncertainties  that  could  cause  actual  results  to  differ  materially  from
historical   results  or  those   anticipated.   In  this   report,   the  words
"anticipates",   "believes",   "expects",   "intends",   "future"   and  similar
expressions  identify  forward-looking  statements.  Readers  are  cautioned  to
consider the specific risk factors  described in the Company's  Annual Report on
Form 10-K for the year ended December 31st, 1997 and not to place undue reliance
on the forward-looking  statements  contained herein, which speak only as of the
date hereof.  The Company  undertakes  no  obligation  to publicly  revise these
forward-looking  statements,  to reflect events or circumstances  that may arise
after the date hereof.

ITEM 2.  LEGAL PROCEEDINGS

         Legal  proceedings  are outlined in detail in the  Company's 10K filing
for the year ending December 31st, 1997.

         On January 7, 1994, the Bureau of Securities of the State of New Jersey
filed a complaint in the matter of Capital General Corporation,  David R. Yeaman
and 74 other  named  defendants,  Nevada  and Utah  corporations  including  the
Company,  which  complaint  proposed  that  civil  monetary  penalties  totaling
$30,000.00  be  assessed   against  Capital  General   Corporation  for  alleged
violations of the Uniform  Securities Law (1967),  N.J.S.A.  49:3-47 et. seq. by
(1)  selling  to 24 New  Jersey  residents  between  April  1986  and May  1991,
securities  in 25 of the 74  respondent  corporations  named in the  proceeding,
including  the  Company,   which  were  neither   registered   nor  exempt  from
registration,  and (2) making untrue statements of material fact and omitting to
state material  facts in connection  with the New Jersey sales in 6 of the 74 to
resident  corporations named in the proceeding,  not including the Company. Also
on January 7, 1994, the Bureau of Securities of the State of New Jersey based on
substantially similar allegations as in the above referred complaint, issued its
Order Denying  Exemptions and to Cease and Desist.  This order summarily  denied
the exemptions  contained in N.J.S.A.  49:3-50(b),  (1), (2), (3), (9), (11) and
(12)  of the  securities  of  Capital  General  Corporation  and  the  other  74
respondent  corporations,  including the Company,  except that excluded from the
summary  denial of the  exemption  contained in N.J.S.A.  49-3-50(b)(12)  is the
Offer of Rescission by Capital General Corporation

                                        4

<PAGE>



to 24 New Jersey residents pursuant to the offer of rescission which began about
April 28, 1993. This order also ordered  Capital  General  Corporation and David
Yeaman to Cease and Desist from offering or selling any securities in blind pool
corporations into, or from the State of New Jersey.

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

     During  1986 and  1987,  Capital  General  gifted  small  amounts  of stock
(usually 100 shares to each giftee) in 48 subsidiary  companies,  which included
the Company, to approximately 1,000 persons or entities. Capital General did not
register the gifts of shares in these companies with the Securities  Division of
the State of Utah or with the Securities Exchange Commission because it believed
these gifts to be outside the scope of the Utah Uniform  Securities  Act and the
Securities  Act of 1933 in as much as such acts require  registration  for sales
and do not require registration of gifts.  Nevertheless,  in connection with the
distribution  of shares of its  subsidiaries,  Capital  General was found by the
Utah  Securities  Advisory  Board,  in two decisions  affirmed by the Utah State
Courts,  to have  violated  the  registration  provisions  of the  Utah  Uniform
Securities  Act.  See In re Amenity  Inc.,  No.  SD-86-11  (Utah Sec.  Adv.  Bd.
February 18, 1987) aff'd  C87-2625 (3d Dist.  Ct.  September 18, 1987) aff'd sub
nom Capital  General  Corp.  v. Utah Dep't of Business  Reg.,  777 P.2d 494, 498
(Utah  Ct.  App.)  cert.  denied,  781 P.2d 873  (Utah S. Ct.  1989);  In re H&B
Carriers  Inc.,  No.  87-09-28-01  (Utah Sec. Adv. Bd., Apr. 15, 1988) aff'd No.
88-5900053 (3d Dist.  Ct. Sept 10, 1990) aff'd sub nom Capital  General Corp. v.
Utah Dep't of Business  Reg.,  Case No 91-196 (Utah Ct. App.  February 10, 1992.
All of the subsidiary companies,  including the company, were parties to the H&B
Carriers order.

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

         Management does not feel that the legal problems of the former officers
and  directors  will  have an  adverse  effect  on the  Company  in the  future.
Management intends to comply with all applicable securities laws in the future.

         On February 8, 1996,  David R. Yeaman was charged in the United  States
District Court for the Eastern District of Pennsylvania  with  conspiracy,  wire
fraud and fraud in the offer,  purchase and sale of securities,  in violation of
18 U.S.C.  Sections 2, 371 and 1343; 15 U.S.C. Sections 77q(a), 77x, 78j(b), and
78ff; and Rule 10b-5  promulgated  by the  Securities  and Exchange  Commission,
Title 17, Code of Federal Regulations, Section 240.10b-5 (1986).

         On February 22,  1996,  Mr.  Yeaman  entered his not guilty plea to all
charges. The allegations against Mr. Yeaman are based on the government's claims
that he and five of the other  defendants  named in the proceeding  violated the
aforesaid laws by inflating the apparent worth of certain reinsurance  companies
by leasing them alleged worthless securities.  Specifically,  it is alleged that
Mr. Yeaman, with other defendants,  engaged in practices which falsely increased
the quoted prices of the securities and misrepresented  restricted securities as
free trading securities.

                                        5

<PAGE>



Based on these allegations,  the charges against Mr. Yeaman include one count of
conspiracy,  seven counts of wire fraud,  six counts of  securities  fraud,  and
aiding and abetting  with respect to each count.  On April 16, 1997,  Mr. Yeaman
was convicted on one count of conspiracy,  five counts of wire fraud,  and three
counts of Securities Fraud.

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

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

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

         Management does not feel that the legal problems of the former officers
and directors will have an adverse effect on the Company in the future.

         Any  outstanding  legal  proceedings  relate  only  to the  operational
activities of the Company prior to the December  1997  activities  which changed
control of the Company and are not a  reflection  of current  management  and/or
business  strategy.  No  material  relationship  existed or now  exists  between
current  management  and any  former  director,  officer,  or  affiliate  of the
Company. Management does not feel that the legal problems of the former officers
and directors will have an adverse effect on the Company in the future. However,
no assurance can be given that costs, expenses or any awards of damages will not
exceed the  expectations  of  management,  which  could have a material  adverse
impact on the Company.

Item 6.           Exhibits and Reports on Form 8-K

                  (a)      Exhibits
                           Financial statements as of March 31, 1998

                  (b)      Reports on Form 8-K
                           None

                                        6

<PAGE>






                                   SIGNATURES

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934,  the Issuer has duly  caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          UNIDYN, CORP.



Dated:  May 20, 1998                  /s/  Ira Gentry
                                          Ira Gentry, President and Director


                                        7

<PAGE>


                                 SMITH & COMPANY
                          A PROFESSIONAL CORPORATION OF
                          CERTIFIED PUBLIC ACCOUNTANTS

MEMBERS OF:                                   10 WEST 100 SOUTH, SUITE 700
AMERICAN INSTITUTE OF                         SALT LAKE CITY, UTAH 84101
     CERTIFIED PUBLIC ACCOUNTANTS             TELEPHONE:       (801) 575-8297
UTAH ASSOCIATION OF                           FACSIMILE:       (801) 575-8306
     CERTIFIED PUBLIC ACCOUNTANTS             E-MAIL: smith&co@smithandcocpa.com
--------------------------------------------------------------------------------



                          INDEPENDENT AUDITOR'S REPORT

The Board of Directors and Shareholders
UniDyn, Corp.

The  accompanying  balance sheet of UniDyn,  Corp. as of March 31, 1998, and the
related  statements  of  operations,  and cash flows for the three  months ended
March 31, 1998 and 1997,  and the period from  inception  to March 31, 1998 were
not audited by us and, accordingly, we do not express an opinion on them.




                                            /s/ Smith & Company
                                       CERTIFIED PUBLIC ACCOUNTANTS

Salt Lake City, Utah
May 8, 1998


                                      F - 1

<PAGE>



                                  UNIDYN, CORP.
                          (A Development Stage Company)
                                  BALANCE SHEET
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                  March 31,
                                                                                    1998
                                                                           ----------------------
ASSETS
              CURRENT ASSETS
<S>                                                                        <C>                   
                  Cash in bank                                             $               48,057
                  Accounts receivable                                                     282,538
                  Inventory                                                                54,191
                                                                           ----------------------

                                              TOTAL CURRENT ASSETS                        384,786
                                                                           ----------------------

                                                                           $              384,786
                                                                           ======================

LIABILITIES & EQUITY
              CURRENT LIABILITIES
                  Accounts payable                                         $               36,707
                  Income taxes payable                                                     54,000
                  Loan payable - related party (Note 4)                                    36,000
                                                                           ----------------------

                                         TOTAL CURRENT LIABILITIES                        126,707

              STOCKHOLDERS' EQUITY 
                  Common Stock $.001 par value:
                      Authorized - 100,000,000 shares
                      Issued and outstanding
                      32,000,000 shares                                                    32,000
                  Additional paid-in capital                                              172,653
                  Treasury stock                                                          (20,992)
                  Earnings accumulated during the
                      development stage                                                    74,418
                                                                           ----------------------

                                        TOTAL STOCKHOLDERS' EQUITY                        258,079
                                                                           ----------------------

                                                                           $              384,786
                                                                           ======================
</TABLE>


                                      F - 2

<PAGE>



                                  UNIDYN, CORP.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                           5/2/86
                                                                     Three Months Ended                   (Date of
                                                                          March 31,                     inception) to
                                                                   1998               1997                 3/31/98
                                                            -----------------   -----------------  -----------------------
<S>                                                         <C>                 <C>                <C>                    
Net sales                                                   $         623,798   $               0  $               623,798
Cost of sales                                                         186,466                   0                  186,466
                                                            -----------------   -----------------  -----------------------

                                              GROSS PROFIT            437,332                   0                  437,332

General and administrative expenses                                   270,124                   0                  280,864
                                                            -----------------   -----------------  -----------------------

                                                NET INCOME
                                       BEFORE INCOME TAXES            167,208                   0                  156,468

Income tax expense                                                     54,050                   0                   54,050
                                                            -----------------   -----------------  -----------------------

                                                NET INCOME  $         113,158   $               0  $               102,418
                                                            =================   =================  =======================

Net income per weighted
           average share                                    $             .00   $             .00
                                                            =================   =================

Weighted average number of common
           shares used to compute net income
           per weighted average share                              32,000,000           1,000,000
                                                            =================   =================
</TABLE>


                                      F - 3

<PAGE>



                                  UNIDYN, CORP.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                                5/2/86
                                                                                                               (Date of
                                                                         Three Months Ended March 31,        Inception) to
                                                                              1998              1997            3/31/98
                                                                       ----------------   ---------------  ---------------
OPERATING ACTIVITIES
<S>                                                                    <C>                <C>              <C>            
           Net income                                                  $        113,158   $             0  $       102,418
           Adjustments to reconcile net income to cash provided
              by operating activities:
                Amortization                                                          0                 0               50
                Stock issued for expenses                                             0                 0              196
           Changes in assets and liabilities:
                Accounts receivable                                            (169,751)                0         (169,751)
                Inventory                                                             0                 0          (13,513)
                Accounts payable                                                 13,652                 0           36,707
                Income taxes payable                                             54,000                 0           54,000
                                                                       ----------------   ---------------  ---------------

                                                    NET CASH PROVIDED
                                              BY OPERATING ACTIVITIES            11,059                 0           10,107

INVESTING ACTIVITIES
           Organization costs                                                         0                 0              (50)
                                                                       ----------------   ---------------  ---------------

                                             NET CASH PROVIDED (USED)
                                              BY INVESTING ACTIVITIES                 0                 0              (50)

FINANCING ACTIVITIES
           Proceeds from sale of common stock                                         0                 0            2,000
           Loans - related party                                                 36,000                 0           36,000
                                                                       ----------------   ---------------  ---------------

                                                 NET CASH PROVIDED BY
                                                 FINANCING ACTIVITIES            36,000                 0           38,000
                                                                       ----------------   ---------------  ---------------

                                                     INCREASE IN CASH
                                                 AND CASH EQUIVALENTS            47,059                 0           48,057

Cash and cash equivalents at beginning of year                                      998                 0                0
                                                                       ----------------   ---------------  ---------------

                                            CASH AND CASH EQUIVALENTS
                                                     AT END OF PERIOD  $         48,057   $             0  $        48,057
                                                                       ================   ===============  ===============

Cash paid for income taxes                                             $             50   $             0  $            50
</TABLE>



                                      F - 4

<PAGE>



                                  UNIDYN, CORP.
                          (A Development Stage Company)
                     NOTES TO UNAUDITED FINANCIAL STATEMENTS
                                 March 31, 1998


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

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

         Organization Costs
         The Company amortized its organization costs over a five year period.

         Inventory
         Inventory  consists  of items for  resale and is valued at the lower of
         cost (first-in, first-out basis) or market.

         Allowance for Uncollectible Accounts
         The Company provides an allowance for uncollectible accounts based upon
         prior experience and management's  assessment of the  collectability of
         existing accounts.

         Revenue Recognition
         Revenue is recognized upon shipment of products.

         Cash and Cash Equivalents
         For  financial  statement  purposes,  the Company  considers all highly
         liquid  investments  with an original  maturity of three months or less
         when purchased to be cash equivalents.

         Earnings (loss) per share
         Earnings or loss per common and common  equivalent share is computed by
         dividing net  earnings  (loss) by the weighted  average  common  shares
         outstanding during each year.

         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,
         liabilities,  revenues,  and  expenses  during  the  reporting  period.
         Estimates  also  affect  the   disclosure  of  contingent   assets  and
         liabilities  at the date of the financial  statements.  Actual  results
         could  differ  from these  estimates.  Such  estimates  of  significant
         accounting sensitivity are allowance for doubtful accounts.

         Stock Options
         The Company has elected to follow  Accounting  Principles Board Opinion
         No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related
         interpretations  in accounting  for its future  employee  stock options
         rather than adopting the alternative fair value accounting provided for
         under Financial  Accounting Standards Board ("FASB") FASB Statement No.
         123, Accounting for Stock Based Compensation (SFAS 123).

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

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


                                      F - 5

<PAGE>


                                  UNIDYN, CORP.
                          (A Development Stage Company)
               NOTES TO UNAUDITED FINANCIAL STATEMENTS (continued)
                                 March 31, 1998


NOTE 1:                SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued)
         At December  31, 1997 a deferred  tax asset was not recorded due to the
         Company's  lack of profitable  operations to provide  income to use the
         net operating loss carryover of $10,740 which expires as follows:

                  Year Ended               Expires               Amount

               December 31, 1986       December 31, 2001     $       1,950
               December 31, 1987       December 31, 2002                10
               December 31, 1988       December 31, 2003                10
               December 31, 1989       December 31, 2004                10
               December 31, 1990       December 31, 2005                10
               December 31, 1991       December 31, 2006                10
               December 31, 1997       December 31, 2012             8,740
                                                             -------------

                                                             $      10,740
                                                             =============

         The Company  expects to use the net  operating  loss on its 1998 income
         tax return.

NOTE 2:                DEVELOPMENT STAGE COMPANY
         The Company was incorporated under the laws of the State of Utah on May
         2, 1986 as Macaw Capital,  Inc. and has been in the  development  stage
         since incorporation. On December 30, 1993, the Company was dissolved as
         a Utah  corporation  and  reincorporated  as a Nevada  corporation.  On
         December 3, 1997, the name was changed to UniDyn, Corp.

NOTE 3:                CAPITALIZATION
         On the date of incorporation,  the Company sold 1,000,000 shares of its
         common  stock to Capital  General  Corporation  for $2,000  cash for an
         average  consideration  of $.002 per share.  The  Company's  authorized
         stock includes  100,000,000  shares of common stock at $.001 par value.
         See also Note 6.

NOTE 4:                RELATED PARTY TRANSACTIONS
         During 1998, the Company borrowed $36,000 from its largest shareholder.
         The amount is  non-interest  bearing and  expected to be repaid  during
         1998.

NOTE 5:            OTHER 1997 EVENTS
         On December 1, 1997,  the Company  constructed a multi-party  agreement
         with the  following  entities;  Universal  Dynamics,  Inc.  an  Arizona
         Corporation,  and Unidyn Inc. a company orgainzed under the laws of the
         Bahamas. Pursuant to the agreement, the Company acquired from Universal
         Dynamics, Inc. certain assets including equipment,  inventory, accounts
         receivable, software, and other intangible assets all pertaining to the
         vibration control system known as "NorthStar". The Company also entered
         into formal  negotiations  for the acquisition of the Derritron  shaker
         product,  and entered into an agreement for the  acquisition  of 80% of
         DVCS,   LTD,  a  UK  company  in  the  business  of  Derritron   shaker
         remanufacturing and related shaker services in the UK.

         In consideration  for the NorthStar assets and to publicly disclose its
         shares for the  pending  acquisitions,  the  Company  issued  3,000,000
         authorized but unissued shares of its common stock,  with the following
         distribution.  Universal Dynamics, Inc. received 982,000 shares for the
         NorthStar  product.  The structure was concluded December 31, 1997. The
         Company also issued 1,822,000 shares for the pending acquisition of the
         Derritron product and 80% ownership of DVCS, LTD. Unidyn Inc. agreed to
         be the trustee of the shares as required  for the pending  acquisitions
         of both Derritron and DVCS, LTD and subsequently returned the shares to
         the Company as  specific  share  transfer  instructions  were  received
         pursuant to the  individual  acquisition  agreement.  Other  interested
         parties received 196,000 shares.


                                      F - 6

<PAGE>


                                  UNIDYN, CORP.
                          (A Development Stage Company)
               NOTES TO UNAUDITED FINANCIAL STATEMENTS (continued)
                                 March 31, 1998


         The Company also generated a $2,000,000 promissory note in the event it
         would  be  required  for  the  pending  acquisitions.   This  note  was
         subsequently  destroyed,  and not  required  for the  acquisition,  and
         represents no liability to the Company.

NOTE 6:                FORWARD STOCK SPLIT
         Effective  December  3,  1997,   pursuant  to  written  action  adopted
         unanimously   by  the  Board  of  Directors   and  a  majority  of  the
         shareholders,  the  Company  changed  its name to  UniDyn,  Corp.,  and
         approved an  eight-for-one  forward stock split on the Company's common
         stock as  follows:  each  outstanding  share was  converted  into eight
         shares.  Before  the  change,  the  Company  was  authorized  to  issue
         100,000,000  shares of $.001 par value common stock;  after the forward
         stock  split the  Company  shall  continue  to be  authorized  to issue
         100,000,000  shares of $.001  par value  common  stock.  The  number of
         outstanding  shares of common stock  affected by the forward  split was
         4,000,000.  The number of issued and outstanding shares of common stock
         of the Company after the forward stock split is 32,000,000.

NOTE 7:                SUBSEQUENT EVENTS
         On April 2, 1998 the Company  announced it intends to issue  14,000,000
         shares of its common stock to acquire Derritron, a leading manufacturer
         of shakers and amplifiers for environmental testing.






                                      F - 7