UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 10-Q


[X]  Quarterly  report  pursuant  to Section 13 or 15(d) of the  Securities
     Exchange Act of 1934

         For the quarterly period ended              September 30, 1997
                                                     ------------------

OR

[ ]  Transition  Report  Pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934

         For the transition period from                     to

Commission File Number              33-55254-45


                            ASSOCIATED TECHNOLOGIES
             (Exact name of registrant as specified in its charter)

                  NEVADA                                   87-0485306
(State or other jurisdiction of incorporation          (IRS Employer 
         or organization)                              Identification Number)

1204 THIRD AVENUE, SUITE 172
NEW YORK, NY                                             10021
(Address of principal executive offices)               (Zip Code)


Registrant's telephone number, including area code       (212) 988-0394
                                                  ---------------------

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


           Class                    Outstanding as of September 30, 1997
---------------------------         ------------------------------------
    CLASS A COMMON STOCK                       2,303,520 Shares
      Par Value $0.001





                                        1

<PAGE>




                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


Financial Statements                                                     Page

Consolidated Balance Sheets as at December 31, 1996 and
     September 30, 1997                                                   F-1

Consolidated Statements of Operations for the quarter ending
     September 30, 1997                                                   F-2

Consolidated Statement of Shareholders' Equity for the period
     from August 9, 1990 to September 30, 1997                            F-3

Consolidated Statements of Cash Flows for the quarter ending
     September 30, 1997                                                   F-4

Selected Notes to Consolidated Financial Statements                       F-5



                                        2

<PAGE>



Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

Associated  Technologies  continues to seek to acquire technology companies with
strong existing management growth potential and technology which can be utilised
in numerous market places. During the current quarter, negotiations were entered
into and terms agreed to in principle for the  acquisition of a company based in
Massachusetts  involved  in the  development  of computer  software  games using
digital  sound  technology.  At the  date  of  this  report,  both  parties  are
finalising the details of the transaction and completing due diligence work. The
acquisition is expected to be finalised during the first quarter of 1998.

Meanwhile,  the company's principal trading subsidiary,  Ogenic Technologies Pty
Ltd,  continues  to focus on improving  operating  results with a view to moving
into a position of  operating  profit as early as  possible in 1998.  A thorough
management  review of all operating  systems and  procedures is currently  being
undertaken and is expected to be completed by the end of 1997.

Management's strategy is to ensure:-

that reporting  systems clearly  differentiate  between the three  components of
Ogenic's  business  i.e.  analog  systems,  digital  systems  and  research  and
development.

a)   that maximum  returns are achieved  from the company's  traditional  analog
     radio  broadcasting  market including improved planning and forecasting and
     as a  consequence,  longer  production  runs which will improve  margins on
     manufactured product.
b)   that  software  development  is clearly  focussed  on  delivering  saleable
     software products which can be marketed  according to an agreed strategy in
     defined markets.
c)   that  maximum  results  are  achieved  from  the  company's   research  and
     development  programs  to enable  the  company  to  position  itself at the
     forefront of future markets.

Ogenic  continues to improve and upgrade its  Virtuoso  product with version 1.2
due for release in December  1997. At the same time,  marketing  strategies  are
being  developed  for the  release of a version  of  Virtuoso  designed  for the
Community Radio Broadcasting market.

During the quarter,  Ogenic  commenced  research and  development  under the sub
research contract,  referred to in the June quarter report, for $1.8 million. It
is expected that the research and development  work will be completed during the
first half of the 1998 financial year.

Results of Operations

The company's subsidiary, Ogenic Technologies Pty Ltd, was acquired in June 1996
and the Statement of Operations shown in F-2, excludes trading  activities prior
to this date. The comments that follow therefore,  are based on the Statement of
Operations  shown in F-10  which  includes  the  trading  activities  of  Ogenic
Technologies  Pty Ltd prior to June 1996. The operating  revenue for the year to
date was $1,370,351,  an increase of more than 250% on the operating revenue for
the  corresponding  period to  September  1996 and resulted in a gross profit of
$688,551   (50%)  compared  with  a  gross  profit  of  $108,095  (28%)  in  the
corresponding period.  General and administrative  expenses are $1,228,801 which
compares  favourably with the 1996 figure of $1,730,938 which includes  $460,000
relating to parent  company  costs  associated  with the  acquisition  of Ogenic
Technologies Pty Ltd.

The operating  revenue for the quarter to September 30, 1997 was $774,348  which
includes $426,938 relating to the sub research contract.  Cost of sales amounted
to $386,100 which includes  $101,990  relating to the sub research  contract and
resulted in a gross profit of $388,248.

General  and  administrative  expenditure  amounted  to  $428,627  and  included
$206,657  for wages and  salaries of which  $26,100 was related to  remuneration
paid to the  directors  of the company or its  subsidiary.  Other major items of
expenditure  were  travel at  $13,697,  depreciation  at  $24,014,  bad debts at
$11,468,  consultancy fees at $34,916, telephone at $16,054 and project expenses
at $43,452.

Since June 30 1997, the Group has received orders totalling $0.70 million and at
the date of this report, the company has outstanding orders of $0.8 million.

                                        3

<PAGE>



Further  contracts are anticipated  from structured R&D programs  involving fund
raising for the development and commercialisation of new software products.

Liquidity and Capital Resources

The  Company's  cash  liquidity  continued  to  improve  as a result of the $1.8
million  received as an advance  payment on account of  contracted  research and
development work and contract deposits received on account of radio broadcasting
contracts ($279,557).

Current assets include:-
a)   $290,420 relating to expenditure incurred in Research and Development which
     the company expects to recoup from the R&D Syndication  program expected to
     commence in the first quarter of 1998; and
b)   prepaid  expenses which include  $304,377  relating to expenses  associated
     with R&D structured  funding programs with a total value of $4.3 million of
     which $1.8 million had been  received at June 30 1997. A proportion  of the
     total  prepaid  fees  which are  expected  to relate  to the  period  after
     September  1998,  have been included under non current assets in accordance
     with normal accounting conventions.

Included  under  current  liabilities,  is a figure  for  income in  advance  of
$1,386,000.  This represents the value of the sub research contract (gross value
$1.8 million) which has not been brought to account.  The anticipated net income
on this sub  research  contract is  expected to be $1.37  million of which $0.32
million has been taken to profit/loss in the current quarter.

The company  repaid  $450,000 in short term loans  during the quarter  including
interest of $15,000.

Impact of Inflation

The  Company  believes  that  its  activities  are not  materially  affected  by
inflation.

Foreign Currency Exposure

Income from Ogenic  Technologies  Pty Ltd  ("Ogenic"),  the Company's  operating
subsidiary,  will be in the form of cash  received  from  customers for sales of
products,  services, and technology,  and the reimbursement of funds expended on
Research &  Development.  In the main,  contracts  are  negotiated in Australian
Dollars, with liabilities incurred in Australian Dollars.

Exchange Rate

The Exchange Rate at September 30, 1997 was:  US$1.00 = A$1.38 (December 31 1996
A$1.27)


                                        4

<PAGE>



                           PART II - OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K


(a) The following exhibits are included in this filing:
                                                                     Page
     Financial Statements as of September 30, 1997                    F-1
     Financial Data Schedule

(b) Reports on Form 8-K.

     None.




                                        5

<PAGE>



                                   SIGNATURES

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

ASSOCIATED TECHNOLOGIES




By:     s/ Alan James Gallagher
       Alan James Gallagher, President (Acting)

Dated :                 18 November 1997
          ------------------------------




                                        6

<PAGE>



                    ASSOCIATED TECHNOLOGIES AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

ASSETS                                                                                 9/30/97               12/31/96
                                                                                     (Unaudited)             (Audited)
                                                                                  -----------------     -----------------
CURRENT ASSETS
<S>                                                                               <C>                   <C>              
     Cash                                                                         $               0     $          18,054
     Research & Development Project debtor                                                  900,001                     0
     Accounts receivable                                                                    334,607               181,341
     Inventories                                                                            253,891               187,062
     Prepaid R&D Expenditure                                                                290,420                     0
     Prepaid expenses                                                                       429,732               759,051
                                                                                  -----------------     -----------------

TOTAL CURRENT ASSETS                                                                      2,208,651             1,145,508
PROPERTY, PLANT, AND EQUIPMENT
     Equipment                                                                              366,064               425,003
     Accumulated depreciation and amortization                                             (270,411)             (309,661)
                                                                                  ------------------    ------------------

NET PROPERTY, PLANT AND EQUIPMENT                                                            95,653               115,342

OTHER ASSETS
     Investments                                                                                138                     0
     Prepaid expenses - R&D structured funding                                              328,125                     0
                                                                                  -----------------     -----------------
                                                                                            328,263                     0
                                                                                  -----------------     -----------------

         TOTAL ASSETS                                                             $       2,632,567     $       1,260,850
         ------------                                                             =================     =================

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
     Bank overdraft                                                               $           5,084     $               0
     Accounts payable                                                                       364,525               155,256
     Accrued expenses                                                                       243,553               324,287
     Income in Advance                                                                    1,386,000                     0
     Loans (secured)                                                                        150,000                66,562
     Accrued Employee Benefits                                                               51,708                27,216
     Contract deposits                                                                      279,557                     0
                                                                                  -----------------     -----------------

TOTAL CURRENT LIABILITIES                                                                 2,480,427               573,321
NON-CURRENT LIABILITIES
     Loans - related parties (unsecured)                                                    123,312               500,321
                                                                                  -----------------     -----------------

TOTAL LIABILITIES                                                                         2,603,739             1,073,642

SHAREHOLDERS' EQUITY Common stock par value $.001:
         25,000,000 shares authorized; 2,303,520 shares issued
         (2,148,000 in 1996)                                                                  2,304                 2,148
     Additional paid-in capital                                                           3,332,204             2,830,112
     Foreign exchange reserve                                                                80,543                     0
     (Deficit) accumulated during development stage                                      (3,386,223)           (2,645,052)
                                                                                  ------------------    ------------------

TOTAL SHAREHOLDERS' EQUITY                                                                   28,828               187,208
                                                                                  -----------------     -----------------

                                                                                  $       2,632,567     $       1,260,850
                                                                                  =================     =================
</TABLE>

                                       F-1


<PAGE>



                    ASSOCIATED TECHNOLOGIES AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                                              Period from
                                                                                                              8/9/90 (date
                                                 Three Months Ended                 Nine Months Ended           of inception)
                                                 9/30/97        9/30/96         9/30/97          9/30/96         to 9/30/97
                                            ----------------  ------------  --------------   ---------------  -----------------
<S>                                         <C>               <C>           <C>              <C>              <C>             
Operating revenue                           $       774,348   $   248,053   $   1,370,351    $      248,053   $      1,830,234
Cost of sales                                      (386,100)     (136,429)       (681,800)         (136,429)        (1,039,918)
                                            ----------------  ------------  --------------   ---------------  -----------------

GROSS PROFIT                                        388,248       111,624         688,551           111,624            790,316

General and administrative expenses                (428,627)     (761,072)     (1,228,801)       (1,221,072)        (3,015,431)
                                            ----------------  ------------  --------------   ---------------  -----------------
Loss before other items                             (40,379)     (649,448)       (540,250)       (1,109,448)        (2,225,115)
                                            ----------------     ---------  -------------    ---------------  ----------------

Other Items:
*    Prior year adjustment                         (124,000)            0        (124,000)                0           (124,000)
     Expenses of Voluntary Administration                 0             0               0                 0            (13,284)
     Profit on sale of fixed assets                  (1,114)      102,052              35           102,052             88,070
     Goodwill on acquisition of subsidiary
         written off                                      0             0               0                 0           (845,012)
     Exchange loss on capitalisation of
         subsidiary's loan                                0             0         (92,068)                0            (92,068)
     Debt Forgiveness                                     0        60,790               0            60,790                  0
     Performance Bond                                     0       (22,363)              0           (22,363)                 0
     Unrealised exchange gain - subsidiary
         loan                                        15,112             0          15,112                 0             15,112
     Research and Development costs                 162,215      (146,478)              0          (146,478)          (189,926)
                                            ---------------   ------------  -------------    ---------------  -----------------
                                                     52,213        (5,999)       (200,921)           (5,999)        (1,161,108)

INCOME (LOSS) BEFORE INCOME
     TAXES                                           11,834      (655,447)       (741,171)       (1,115,447)        (3,386,223)

PROVISION FOR INCOME TAXES                                0             0               0                 0                  0
                                            ---------------   -----------   -------------    --------------   ----------------

NET INCOME (LOSS)                           $        11,834   $  (655,447)  $    (741,171)   $   (1,115,447)  $     (3,386,223)
                                            ===============   ============  =============    ===============  =================

     Net income (loss) per weighted
         average common share
         outstanding                        $          0.01   $     (0.46)  $       (0.34)   $        (0.96)  $          (2.86)
                                            ===============   ============  =============    ===============  =================

     Weighted average number of
         common shares outstanding                2,303,520     1,437,804       2,200,410         1,162,547          1,182,885
                                            ===============   ===========   =============    ==============   ================
</TABLE>

*    The  prior  year  adjustment   represents  an  amount  finally   negotiated
     subsequent  to the  previous  year  end in  relation  to a fee due to First
     Sydney Capital Ltd for merchant banking services and advice rendered during
     and prior to the acquisition of Ogenic Technologies Pty Ltd.

                                       F-2


<PAGE>
                    ASSOCIATED TECHNOLOGIES AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
      Period from August 9, 1990 (Date of Inception) to September 30, 1997
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                                                  Deficit
                                                                                                                Accumulated
                                                                                            Additional            During
                                                       Common              Stock              Paid-in           Development
                                                       Shares             Amount              Capital              Stage
                                                  ---------------    -----------------   ----------------   ------------------
<S>                                               <C>                <C>                 <C>                <C>               
Balances at 8/9/90 (Date of Inception)                          0    $               0   $              0   $                0
   Issuance of common stock (restricted) at
      $.001 per share at 8/9/90                         1,000,000                1,000                  0                    0
Net loss for period                                                                                                     (1,000)
                                                  ---------------    -----------------   ----------------   ------------------
Balances at 12/31/90                                    1,000,000                1,000                  0               (1,000)
Net income for year                                                                                                          0
                                                  ---------------    -----------------   ----------------   ------------------
Balances at 12/31/91                                    1,000,000                1,000                  0               (1,000)
Net income for year                                                                                                          0
                                                  ---------------    -----------------   ----------------   ------------------
Balances at 12/31/92                                    1,000,000                1,000                  0               (1,000)
Net income for year                                                                                                          0
                                                  ---------------    -----------------   ----------------   ------------------
Balances at 12/31/93                                    1,000,000                1,000                  0               (1,000)
Net income for year                                                                                                          0
                                                  ---------------    -----------------   ----------------   ------------------
Balances at 12/31/94                                    1,000,000                1,000                  0               (1,000)
Net income for year                                                                                                          0
                                                  ---------------    -----------------   ----------------   ------------------
Balances at 12/31/95                                    1,000,000                1,000                  0               (1,000)
   Issuance of common stock (restricted) at
      $5.00 per share for cash at 1/10/96                  20,000                   20             99,980
   Issuance of common stock (80,000
      Regulation  S and 100,000  restricted)  
      at par to acquire  subsidiary  and
      associated loan at 6/28/96 (Value based 
      on assets received)                                 180,000                  180                  -
   Issuance of common stock (restricted) at
      $2.00 per share for expenses at 6/28/96             230,000                  230            459,770
   Issuance of common stock (restricted) at
      $2.00 per share to retire debt at
      9/30/96                                             270,000                  270            539,730
   Issuance of common stock (Regulation S)
      at $4.50 per share to retire debt at
      9/30/96                                             218,000                  218            980,782
   Issuance of common stock (restricted) at
      $0.001 per share for prepaid expenses
      At 9/30/96                                           80,000                   80                  -
   Issuance of common stock (restricted) at
      $5.00 per share for prepaid expenses                150,000                  150            749,850
      at 9/30/96
Net loss for the year to 12/31/96                                                                                   (2,644,052)
                                                  ---------------    -----------------   ----------------   -------------------
Balances at 12/31/96                                    2,148,000                2,148          2,830,112           (2,645,052)
Issuance of common stock (Reg S) at $4 per
   share to retire debt at 6/30/97                         95,605                   96            382,322                    0
Issuance of common stock (Reg S) at $2 per
   share to retire debt at 6/30/97                         59,915                   60            119,770                    0
Net loss for the period to 9/30/97                              0                    0                  0             (741,171)
                                                  ---------------    -----------------   ----------------   -------------------
Balances at 9/30/97                                     2,303,520    $           2,304   $      3,332,204   $       (3,386,223)
                                                  ===============    =================   ================   ===================
</TABLE>

                                       F-3


<PAGE>
                    ASSOCIATED TECHNOLOGIES AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                                              Period from
                                                                                                             8/9/90 (date
                                                                            Nine Months Ended                of inception)
                                                                       9/30/97             9/30/96            to 9/30/97
                                                                  ----------------    ----------------    -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                               <C>                 <C>                 <C>               
   Net loss                                                       $       (741,171)   $     (1,115,447)   $      (3,386,223)
      Adjustments to reconcile net (loss) to net
         cash required by operating activities:
             (Profit)/Loss on sale of non current assets                   (16,308)            (88,037)            (104,344)
         Stock issued for expenses                                               0             460,000                    0
         Depreciation                                                       46,518              14,467               78,755
             Goodwill written off                                                0                   0              845,012
             Accrued Employee Benefits                                      28,614                   0               41,231
             Investments written off                                        11,907                   0               11,907

      Changes in assets and liabilities
             Accounts receivable                                        (1,102,665)                  0           (1,304,704)
             Inventories                                                   (89,709)                  0               37,841
             Prepaid expense                                              (350,930)                  0           (1,109,306)
             Accounts payable                                              286,287                   0              427,027
             Accrued expenses                                              (78,275)                  0              (63,573)
             Income in advance                                           1,429,313                   0            1,429,313
             Contract deposits                                             288,293                   0              288,293
                                                                  ----------------    ----------------    -----------------
                                                                           453,045             386,430              577,452
                                                                  ----------------    ----------------    -----------------
NET CASH REQUIRED BY
   OPERATING ACTIVITIES                                                   (288,126)             (5,043)          (2,808,771)

CASH FLOWS FROM INVESTING ACTIVITIES
      Proceeds from sale of non current assets                                   0             693,615              713,797
      Cash acquired from subsidiaries                                            0             104,353              147,939
         Investment in joint venture                                       (12,164)                  0              (12,164)
      Purchase of Fixed Assets                                             (42,870)                  0              (61,622)
                                                                  -----------------   ----------------    ------------------
NET CASH PROVIDED (REQUIRED)
    BY   INVESTING ACTIVITIES                                              (55,034)            797,968              787,950
                                                                  -----------------   ----------------    -----------------

CASH FLOWS FROM FINANCING
   ACTIVITIES
      Loan Repayments - Bank                                                     0                   0             (657,307)
      Stock sold                                                           502,248             100,000            3,334,508
      Loans - related parties                                              366,236             572,208              866,557
      Loan repayments - other                                             (514,762)           (748,157)            (514,762)
      Loans - other                                                        600,000                   0              668,369
      Loan repayments - related parties                                   (502,248)                  0           (1,550,176)
                                                                  -----------------   ----------------    ------------------
NET CASH PROVIDED (REQUIRED)
   BY FINANCING ACTIVITIES                                                 451,474             (75,949)           2,147,189
                                                                  ----------------    -----------------   -----------------

NET INCREASE IN CASH                                                       108,314              23,361              126,368

   Foreign exchange translation adjustment                                (131,452)                  0             (131,452)
                                                                  -----------------   ----------------    ------------------
                                                                           (23,138)             23,361               (5,084)

CASH AT BEGINNING OF PERIOD                                                 18,054                   0                    0
                                                                  ----------------    ----------------    -----------------

CASH AT END OF PERIOD                                             $         (5,084)   $         23,361    $          (5,084)
                                                                  =================   ================    ==================
</TABLE>

                                       F-4


<PAGE>

SUPPLEMENTAL FINANCING ACTIVITIES

During the period ended September 30 1997, the Company issued 155,520 Regulation
S shares in satisfaction of loans due to the following related parties.

                                                              No. of shares
         Project & General Finance Pty Ltd                           95,605
         First Sydney Capital Ltd                                    59,915
                                                              -------------
                                                                    155,520
                                                              =============

On 10 March 1997 the Company  entered into a  promissory  agreement in regard to
loan funds advanced of $300,000. In addition to interest at 10% per annum on the
amount  outstanding,  the Company entered into a stock option agreement with the
lender  for  120,000  shares at a price of $2.50 per share  exercisable  until 7
March 2002.  The loan is secured over the  Company's  shares in its  subsidiary,
Ogenic  Technologies  Pty Ltd. The loan was fully repaid in the  September  1997
quarter together with interest of $15,000.

In June 1997, the Company entered into a promissory  agreement in regard to loan
funds advanced of $300,000.  The promissory  agreement  bears no interest and is
repayable by December  1997.  In lieu of  interest,  the borrower was granted an
option to  purchase  205,000  shares in the  Company  at a price of $2 per share
exercisable  until 30 June 2003.  At 30 September  1997,  $150,000 had been duly
repaid to the lender.

On 16 May 1997, the Board of Directors  resolved to set aside for issuance under
a Stock Option Plan up to 1,000,000 shares of common stock options to be granted
to employees and directors of the Group.




                                       F-5


<PAGE>



                    ASSOCIATED TECHNOLOGIES AND SUBSIDIARIES
               SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               September 30, 1997


NOTE 1:           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation
The  consolidated  financial  statements  as of  September  30, 1997 include the
accounts of the Company and its wholly-owned  subsidiary Ogenic Technologies Pty
Ltd,  Ogenic's  95% owned  inactive  subsidiary  Ogenic  Industries  Pty Ltd and
Ogenic's dormant subsidiary Ogenic Sales Pty Ltd. All significant  inter-company
balances and transactions have been eliminated in consolidation.

Accounting Methods
The  Company  recognizes  income and  expenses  based on the  accrual  method of
accounting.

Cash and Cash Equivalents
All short term investments  purchased with an original  maturity of three months
or less  are  considered  to be cash  equivalents.  Cash  and  cash  equivalents
primarily   include  cash  on  hand  and  amounts  on  deposit  with   financial
institutions.

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

Non Current Investments Investments are brought to account at cost.

Property, Plant and Equipment
Property,  plant and  equipment  are  brought to account  at cost,  less,  where
applicable, any accumulated depreciation or amortisation. The carrying amount of
property,  plant and equipment is reviewed annually by Directors to ensure it is
not in excess of the  recoverable  amount  from these  assets.  The  recoverable
amount is  assessed  on the basis of the  expected  net cash flows which will be
received from the assets employed and subsequent disposal. The expected net cash
flows  have  not  been   discounted  to  their  present  values  in  determining
recoverable amounts.

The depreciable  amount of all fixed assets including  buildings and capitalised
lease assets,  but excluding  freehold  land, is  depreciated  over their useful
lives commencing from the time the asset is held ready for use.

The gain or loss on disposal of all fixed assets is determined as the difference
between  the  carrying  amount  of the  asset  at the time of  disposal  and the
proceeds of disposal,  and is included in operating  profit before income tax of
the economic entity in the year of disposal.

Income Tax
The economic entity adopts a liability method of tax effect  accounting  whereby
the  income  tax  expense  shown in the  Profit & Loss  Account  is based on the
operating profit before income tax adjusted for permanent differences.


Timing differences which arise due to the different  accounting periods in which
items of revenue and expense are  included  in the  determination  of  operating
profit before income tax and taxable  income are brought to account  either as a
provision for deferred  income tax or as an asset described as future income tax
benefit at rates of income  tax  applicable  to the period in which the  benefit
will be received or the liability will become payable.

Future income tax benefits are not brought to account unless  realisation of the
asset is assured beyond any reasonable  doubt.  The amount of benefit brought to
account or which may be realised in the future is based on the  assumption  that
no adverse change will occur in income tax legislation and the anticipation that
the

                                       F-6


<PAGE>



economic entity will derive  sufficient future assessable income and comply with
the conditions of deductibility imposed by the Law to permit a future income tax
benefit to be claimed.

At the date of this report,  the economic entity has tax losses of approximately
$5.6m of which $1.3m relates to Associated  Technologies and the balance relates
to its  principal  subsidiary  Ogenic  Technologies  Pty Ltd. The  Directors are
confident that the Research and Development syndication and funding arrangements
to be completed  during 1998,  will result in the full amount of the accumulated
tax losses being  recovered  against future taxable  income.  The Directors have
however,  adopted a conservative  view in regard to these losses until such time
as full  documentation is completed and operating results improve.  Accordingly,
no value has been  included in the  accounts  for the future  income tax benefit
that is  expected  to arise in the  foreseeable  future.  This  treatment  is in
accordance with US G.A.A.P. and Australian accounting standards.

Inventories
With the  exception of contract work in progress all  inventories  are valued at
the lower of cost and net realisable  value.  The cost of manufactured  products
includes direct materials,  direct labour and an appropriate portion of variable
and fixed  overheads.  Overheads  are  applied on the basis of normal  operating
capacity. Costs are assigned on the basis of weighted average.

Construction Contracts
All  contracts  which are on a fixed price basis are  accounted for on the basis
that profit is  recognised  in  proportion to the progress of each contract when
the following conditions are satisfied:

       -      Total contract revenues to be received can be reliably estimated.
       -      The costs to complete the contract can be reliably estimated.
       -      The stage of contract completion can be reliably determined (and
              is at least 30% of the total contract;)
       -      The costs attributable to the contract to date can be clearly 
              identified and can be compared with prior estimates.

Research & Development Contracts
Contracts  for  Research &  Development  which are on a fixed price  basis,  are
accounted  for on the basis  that  profit is  recognised  in  proportion  to the
progress of each contract when the following conditions are satisfied:

       -      Total contract revenues to be received can be reliably estimated.
       -      The costs to complete the contract can be reliably estimated.
       -      The stage of contract completion can be reliably determined.
       -      The costs attributable to the contract to date can be clearly 
              identified and can be compared with prior estimates.



At the  date of this  report,  the  Directors  estimate  that  the sub  research
contract for $1.8 million is 23% complete. As this contract meets the conditions
specified  above,  the  following  income and  expenditure  has been  brought to
account as profit in the current quarter.

<TABLE>
<CAPTION>
                                    Total            Profit &          Foreign        Unexpired
                                  Contract           Loss A/C         Exchange        Portion
                                                                       Reserve
                                ------------         ----------         ---------     ------------
<S>                                <C>                  <C>                <C>           <C>      
       Gross Revenue               1,800,000            426,938            12,938        1,386,000
       Less Expenditure              430,000            101,990             3,090          331,100
                                ------------         ----------         ---------     ------------
       Net Income                  1,370,000            324,948             9,848        1,054,900
                                ============         ==========         =========     ============
</TABLE>

Operating Revenue
Sales revenue  represents  revenue earned from the sale of the group's products,
research and development  work, net of returns,  trade allowances and duties and
taxes paid.  Other revenue includes  interest income,  proceeds from disposal of
non current assets and insurance recoveries.


                                       F-7


<PAGE>



Receivables
A  provision  is  raised  for  any  doubtful  debts  based  on a  review  of all
outstanding  amounts at year end. Bad debts are written off during the period in
which they are identified.

Research & Development
During the period to  September  30 1997,  the  company's  principal  subsidiary
Ogenic  Technologies Pty Ltd, incurred  Research and Development  Expenditure of
$290,420 in the development of Virtuoso,  a digital audio playback and recording
system for the radio broadcasting  industry.  Virtuoso has been designed to form
the foundation of the company's future PC based play-out software systems. These
systems are intended for  traditional  markets and new markets in the commercial
entertainment  industries.  Virtuoso  forms the  foundation  of the proposed R&D
Syndication to develop the Virtual  Interactive Radio Station.  Documentation on
the R&D  Syndication  is  expected  to be  completed  during the  December  1997
quarter.  The Directors  are of the opinion that the full amount of  expenditure
incurred  on the  development  of  Virtuoso  during the  current  year,  will be
recoverable from the R&D Syndication income.  Accordingly,  the charge to Profit
and Loss for the half  year to June 1997  ($162,215)  and  expenditure  incurred
during the current quarter ($128,205), has been treated as a recoverable item in
current assets.

The company adopts the policy of writing off against  current  revenue,  any R&D
costs which are not directly funded from external sources.

Intangible Assets
The  company's  principal  trading  subsidiary  which was acquired in June 1996,
possesses  significant  core  technology  which  has not  been  recorded  in the
company's  books.  This core  technology was valued by Ernst & Young at $4.3m in
1996 for the purposes of the proposed Research and Development Syndication.

In addition since November 1995, Ogenic Technologies Pty Ltd has spent in excess
of $530,000 in Research and Development of a new digital  recording and playback
system for the radio broadcasting industry (Virtuoso). As noted above, costs for
the year to date ($290,420) have been treated as a current asset at September 30
1997 as the  Directors  are of the opinion that these costs will be  recoverable
out of the proposed  R&D  Syndication  which is expected to be finalised  before
December 31, 1997.

There is a further  intangible  asset  relating to a future  income tax benefits
which has also not been brought to account.  This  treatment is consistent  with
the Directors  conservative approach to the recognition of intangible assets and
is in accordance with both US G.A.A.P. and Australian accounting standards.

Goodwill
Goodwill arising on consolidation of subsidiaries is capitalised and written off
over a maximum period of 5 years.  However,  in accordance with SEC practice and
in view of the  fact  that  Ogenic  represented  the  first  acquisition  of AT,
goodwill  arising on the acquisition of Ogenic,  was written off during the year
ended December 31, 1996.

Foreign Currency Translation
Assets and  liabilities  denominated in foreign  currencies are translated to US
dollars at the exchange rate at the balance sheet date.  Income  statement items
are translated at an average currency  exchange rate. The resulting  translation
adjustment is recorded as a separate component of stockholders' equity.

NOTE 2:           BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for interim
financial  information and with the  instructions to Form 10-Q and Rule 10-01 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial  statements.   In  the  opinion  of  the  Company's  management,   all
adjustments  (consisting  of normal  accruals)  considered  necessary for a fair
presentation of these financial statements have been included. Operating results
for the nine months ended September 30, 1997 are not  necessarily  indicative of
the results that can be expected for the year ending December 31, 1997.


                                       F-8


<PAGE>



NOTE 3:           RELATED PARTY TRANSACTIONS

The Company's subsidiary Ogenic, leases property in Perth, Western Australia and
the  Company  utilises  office  space  in New York and  Sydney,  Australia  when
necessary.

Included  under  non-current  liabilities  are loans  totalling  $123,312 due to
companies associated with First Sydney Capital Ltd which is a shareholder in the
Company.  Both Mr. Len McDowall and Mr. Alan  Gallagher  are  Directors of First
Sydney Capital Ltd. The loan bears interest at 12%.

NOTE 4:           RESEARCH AND DEVELOPMENT

On June 29,  1996,  a Research  and  Development  syndicate  was entered into by
Ogenic  with a joint  venture  party for  funding  over a 2 year  period of $1.7
million.  Details of the key terms of these  agreements  have been  provided  in
previous filings.

In December 1996,  these agreements were unwound as a result of the inability to
complete the transaction  within the specified time period following a change of
policy  by  the  Australian  Government.   After  extensive  lobbying,  Ogenic's
syndication  was  allowed to proceed  subject to  appropriate  approvals  by the
Government.

At the date of this report,  Ogenic has received  approval  from the  Australian
Government for this R & D Syndication and  documentation  is progressing  with a
view to completion prior to December 31, 1997.

In addition to the R&D  Syndication,  on June 30 1997 Ogenic was  appointed as a
sub-researcher under a structured R&D funding program with a total value of $1.8
million over the year to June 30,  1998.  This  contract was arranged  through a
related  entity,  First  Sydney  Capital Ltd.  Further  research  contracts  are
anticipated over the next 12 months.

NOTE 5:           INTANGIBLE ASSETS

No account has been taken of the  intangible or  contingent  assets to which the
Company has title.  These include the Company's existing analogue product range,
the released version of Virtuoso,  general technological and market knowledge in
regard to the radio  broadcasting  industry  and the income tax benefit that may
arise  once the  Company  has  secured  its  Research  and  Development  funding
programs.


                                       F-9


<PAGE>



                    ASSOCIATED TECHNOLOGIES AND SUBSIDIARIES
                 PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
                                    UNAUDITED

<TABLE>
<CAPTION>
                                                    Three months    Three months        Nine months        Nine months
                                                        ended           ended              ended              ended
                                                       9/30/97         9/30/96            9/30/97            9/30/96
                                                   --------------   -------------   ------------------  -----------------
<S>                                                <C>              <C>             <C>                 <C>             
Operating Revenue                                  $     774,348    $    248,053    $       1,370,351   $        387,813
Cost of Sales                                           (386,100)       (136,429)            (681,800)          (279,718)
                                                   --------------   -------------   ------------------  -----------------

GROSS PROFIT                                             388,248         111,624              688,551            108,095
General and Administrative expenses                     (428,627)       (761,072)          (1,228,801)        (1,730,938)
                                                   --------------   -------------   ------------------  -----------------
Loss before other items                                  (40,379)       (649,448)            (540,250)        (1,622,843)

Other Items:
   Prior Period Adjustment                              (124,000)              0             (124,000)                 0
   Research and Design costs                             162,215        (146,478)                   0           (191,583)
   Bad debt - subsidiary & write off investment                0               0                    0            (23,700)
   Bankruptcy expenses                                         0         (62,961)                   0           (112,222)
   Debt forgiveness                                            0          60,790                    0            650,042
   Profit on sale of fixed asset                          (1,114)        102,052                   35            102,052
   Realised exchange loss on capitalisation of
      subsidiary's loan                                        0               0              (92,068)                 0
   Unrealised exchange gain on loan with
      subsidiary                                          15,112               0               15,112                  0
   Performance Bond                                            0         (22,363)                   0            (22,363)
                                                   -------------    -------------   -----------------   -----------------

                                                          52,213          (5,999)            (200,922)           402,226
                                                   -------------    -------------   -----------------   ----------------

INCOME (LOSS) BEFORE INCOME TAXES                         11,834        (655,447)            (741,171)        (1,220,617)
PROVISION FOR INCOME TAXES                                     0               0                    0                  0
                                                   -------------    ------------    -----------------   ----------------

NET INCOME (LOSS)                                  $      11,834    $   (655,447)   $        (741,171)  $     (1,220,617)
                                                   =============    =============   ==================  ================

INCOME (LOSS) PER COMMON SHARE
Net income (loss) per weighted average
   common share outstanding                        $        0.01    $      (0.46)   $           (0.34)  $          (0.98)
                                                   =============    =============   ==================  ================
Weighted average number of common
   shares outstanding                                  2,303,520       1,437,804            2,200,410          1,242,547
                                                   =============    ============    =================   ================
</TABLE>



NB     1 The Corporation's  principal trading subsidiary Ogenic Technologies Pty
       Ltd,  was  acquired  on June 28 1996.  The  above  statements  have  been
       prepared  for  comparison  purposes  only and  excludes the profit on the
       abortive R&D Syndication in June 1996.

NB     2 The prior period  adjustment  represents an amount  finally  negotiated
       subsequent  to the  previous  year end in  relation to a fee due to First
       Sydney  Capital Ltd for merchant  banking  services  and advice  rendered
       during and prior to the acquisition of Ogenic Technologies Pty Ltd.


                                      F-10