SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
(Mark One)

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

                   For the Fiscal Year Ended December 31, 1996

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

                       For the transition period from to .

                        Commission File Number 2-96392-A

                          TRIANGLE IMAGING GROUP, INC.
                 (Name of small business issuer in its charter)

                   Florida                                 59-2493183
  (State or other jurisdiction of incorporation    (IRS Employer I.D. Number)
               or organization)

                4400 W. Sample Road, Coconut Creek, Florida 33073
               (Address of Principal Executive Offices) (Zip Code)

                    Issuer's Telephone Number (954) 968-2080

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

Securities registered under Section 12(g) of the Exchange Act:

                                      None
                                (Title of class)

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

         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of  Regulation  S-B contained in this form,  and no disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ X ]

Issuer's revenues for its most recent fiscal year.    $302,196     .

As of March  27,  1997,  5,660,166  shares  of the  issuer's  common  stock  was
outstanding.
As of such  date,  the  aggregate  market  value  of the  common  stock  held by
non-affiliates was approximately $4,700,000.

                       DOCUMENTS INCORPORATED BY REFERENCE

No documents have been incorporated by reference.



<PAGE>


                          TRIANGLE IMAGING GROUP, INC.

                          ANNUAL REPORT ON FORM 10-KSB

                      FOR THE YEAR ENDED DECEMBER 31, 1996



                                TABLE OF CONTENTS

<TABLE>
<CAPTION>


                                     PART I                                               PAGE
<S>                                                                                       <C>

Business                                                                                   2
Properties                                                                                 7
Legal Proceedings                                                                          7
Submission of Matters to a Vote of Security Holders                                        7

                                     PART II

Market for Registrant's Common Equity and Related Stockholder Matters                      8
Management's Discussion & Analysis of Financial Condition & Results of Operations          8
Inflation                                                                                  10
Financial Statements and Supplementary Data                                                10
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure       10

                                    PART III

Directors and Executive Officers of the Registrant                                         11
Security Ownership of Certain Beneficial Owners and Management                             12
Executive Compensation                                                                     13
Certain Relationships and Related Transactions                                             13

                                     PART IV

Exhibits, Financial Statement Schedules, and Reports on Form 8-K                           13
Stock Options                                                                              14











</TABLE>

<PAGE>



                                     PART I
ITEM 1.           BUSINESS

General

     Triangle Imaging Group, Inc. ("Triangle" or the "Company"), through its 95%
owned  subsidiary,  is  engaged  in  providing  credit  reporting  software  and
automated quality control software for the credit industry.

Engineered  Business  Systems,  Inc.  ("EBS")  constitutes the Company's  entire
business as a result of the  Acquisition,  as more fully described below. EBS is
one of the nation's largest  independent  providers of credit reporting software
with more than 350 CRISTM  systems  installed at credit  bureaus  throughout the
United States. In addition, EBS is the top provider of automated quality control
software  with more than 50  ACESTM  systems  installed  at  mortgage  companies
nationwide.

Background

On December 2, 1996, Triangle purchased from certain stockholders of EBS a total
of 95% of the  outstanding  shares  of EBS  Common  Stock  for cash and notes of
approximately $2.6 million and Triangle Common Stock.

Business Operations

EBS began in 1989 as a direct response to the needs of the credit  reporting and
mortgage  lending  industries.  Since then,  EBS has become one of the  nation's
larger  independent  providers of credit  reporting  software with more than 350
CRISTM systems installed at credit bureaus. In addition, EBS is the top provider
of automated quality control software with more than 50 ACESTM systems installed
at mortgage companies nationwide.

EBS has built its reputation on innovative  system design and superior  customer
support. Software products include the CRISTM Mortgage Reporting System, the EBS
XchangeTM,  an automated  merged infile system with Electronic Data  Interchange
(EDI)  capabilities,  and the ACESTM Quality Control System.  Additionally,  EBS
offers ACESTM Quality Control  Solutions to provide the outsourcing  service and
mortgage  banking  institutions'  quality  assurance  function  to the  mortgage
banking industry.

Products

CRISTM AND EBS XchangeTM

These systems provide merged in file credit information and Residential Mortgage
Credit Report  (RMCR)  information  based upon  requests  from Loan  Origination
System (LOS) programs primarily for the purchase of residential homes.

CRISTM  interfaces  from the LOSs  then  with  TRW,  Trans  Union,  and  Equifax
(repositories) to obtain,

                                        2

<PAGE>



merge,  and  deduplicate  credit  data  into a  single  merged  in file  report.
Additionally,  CRISTM  provides an accounts  receivable  and billing system with
reporting capabilities for EBS' customers to bill their customers.

CRISTM is a personal computer based system with communication ability.  Requests
for credit information originate with EBS' customers' customers.  The request is
then made to EBS'  customer  who utilizes  the CRISTM  system to request  credit
information from the  repositories.  CRISTM also enables EBS' clients to perform
RMCRs which include manually verified information regarding employment,  housing
location,   and  other   information   requiring   verification  from  the  loan
application.  Additionally,  CRISTM  automatically  produces a  Consumer  Letter
requesting an  explanation  when a credit report  contains  adverse  information
which requires clarification from the consumer.

EBS XchangeTM  connects the Quick Credit product,  which only produces merged in
file  reports,  from EBS'  customers'  customer  to CRISTM.  This  communication
package  provides  the  interface  from  the LOS to  CRISTM  and  then  with the
repositories.

Traditional credit reporting for the residential  mortgage credit segment varies
based upon interest rates. New technologies,  such as electronic data interfaces
(EDI), one of the more well known being the ANSI X.12 format,  create changes in
the  marketplace.  Investors,  such as  Federal  National  Mortgage  Association
(Fannie Mae) and the Federal Home Loan  Mortgage  Corporation  (Freddie Mac) and
others,  created automated  processing and underwriting systems that need credit
information to make a lending  decision.  Opportunities for growth exist through
these new systems.

Transactional / Merge Center

The EBS Merge Center links the CRISTM  system to the  repositories  through EBS.
The Merge Center  enables EBS' customers to be charged a  transactional  fee per
report with minimums, billed on a monthly basis. With this product, EBS provides
customers with all interfaces with LOSs that EBS creates. The Merge Center is an
EBS XchangeTM  system  through which EBS'  customers'  customers  request credit
report information and RMCRs. EBS' customers are performing the entire operation
from their offices.

ACESTM

ACESTM  provides  an  automated  review  tracking  system to perform the quality
control review function  required by Fannie Mae, Freddie Mac, FHA, VA, and other
mortgage  investors.  The ACESTM product enables each company to perform quality
control  reviews based upon the risk management  philosophy  determined by their
company.  As  guidelines  change,  ACESTM  enables the user to modify the review
process.  ACESTM provides a basic questionnaire,  which the customer may modify,
to apply the  procedures and  guidelines  each company  requires on a consistent
basis.

ACESTM is sold in three formats, usage, lease and sale. The usage option charges
a per use  expense  for each file  reviewed.  The lease  includes  the  software
maintenance fee while the sale adds an annual software maintenance fee.

     ACESTM  receives  mortgage  loan  information  in an ASCII comma  delimited
format created by the user.
                                        3

<PAGE>



from their loan origination  system.  This provides  automatic  downloads of the
loans each company  originates  and reduces  redundant  duplicative  data input.
Alternatively,  the customer  may  manually  input any or all of the loan detail
elements.

ACESTM also  contains a loan  selection  module  which  enables the  customer to
select  loans for review  from the entire  universe  of loans  originated,  with
specific criteria or risk elements. This module randomly selects loans to insure
no undue bias. Furthermore, EBS entered into a contract with COGENT Economics to
provide an interface  with  COGENT's  customized  statistical  sampling  program
designed for each specific company. This system enables large mortgage companies
to enhance the review process and target risk areas.

Within ACESTM the processing of the loan for quality  control  review  initiates
the  process.  This  entails  the  creation  of  reverification  letters for the
application,  employment,  deposits  (source of funds),  credit,  and  sometimes
appraisal.  With the bulk of this information  included in the download from the
LOS,  customers  may create their own letter with tokens in place to receive the
specific  information for each individual loan without re-entry.  Through ACESTM
the customer may also access the Quick Credit  product to request credit reports
on the specified loans.

The underwriting  module includes the questionnaire,  which customers may tailor
to their  needs.  This  provides  consistent  application  of the  review of all
aspects of the loan as customers determine. The questionnaire provides the basis
for  investors to insure that all of the risk  elements  they identify have been
addressed by the mortgage company.  This section records exceptions and provides
a worksheet which includes specific information about each loan and provides the
opportunity for the reviewer to rate each loan. Alternatively, customers may use
any  combination of checklists and / or exception based reviews to customize the
system to their individual risk management needs.

The reporting module summarizes selected  information on exceptions cited in the
underwriting module.  Reports may be generated to include statistical percentage
information,  listing and adding of exceptions  cited,  and  graphical  reports.
Customers  may  export  information  in an  ASCII  format  for  use  in  various
spreadsheet and database packages.

Quality Assurance

EBS' ACES Quality Control Services focuses on assisting Lenders in their quality
construction  requirements.  EBS  promotes  and  supports  the highest  level of
standards for mortgage lending.

EBS provides third party quality construction  services for professional reviews
of  Conventional,  FHA, VA, Jumbo,  and specialty  mortgage loans throughout the
lending  process.  Through the ACESTM  Quality  Control  Software  EBS  selects,
processes, reviews, and reports on all aspects of loans to include specific loan
exceptions to all findings in a given loan. The ACESTM Quality Control  software
also  enables  EBS  to  perform  reviews  for  various  transactions   including
prefunding  reviews,  post  closing  reviews,  portfolio  acquisitions,  and due
diligence processes.

Upon the  completion  of an audit,  the client is charged for each review  based
upon a per file charge,  credit report and RMCR (if applicable)  charge,  review
appraisal  (as  applicable)  charge,  and any  other  extra  services  charge as
requested by the customer.

                                        4

<PAGE>



EBS  performs a complete  review of loan files and  reverification  of  relevant
documents  which exceeds  investors'  requirements.  Various options exist which
include fewer review elements, exclude certain components of the full review, or
entail additional review criteria as agreed upon with the customer.

The lender  provides  EBS with the  universe of loans from which EBS will select
loans for the quality  control  audit.  EBS selects the sample  loans based upon
agreed  upon  selection  criteria  to meet  the  guidelines  established  by the
lender's Agencies,  investors,  management,  etc. Alternatively,  the lender may
perform their own loan selection and provide EBS with the download  information.
Upon  completion of the review,  EBS provides  detailed  information and reports
that identify the findings of the review for analysis by the customer.

Sales and Markets

The credit reporting market, while somewhat cyclical in the mortgage origination
segment,  possesses substantial opportunity for growth in new segments requiring
sizeable   investments  which  necessitate   credit   evaluation.   Furthermore,
opportunities  exist for related products requiring the evaluation of consumers'
credit background.

Customers  acquire CRISTM and EBS XchangeTM through referrals to EBS or contacts
through the sales  organization.  EBS derives  revenue from these products based
upon  sale of  software  and  hardware,  annual  service  maintenance  agreement
payments, and monthly transactional fees.

Outsourcing  of  systems  and  support  offers  growth in the EBS  Merge  Center
product.  This  customer  segment can utilize this  service  without the capital
investment  for a dedicated  system and provide  their quality  product  through
their local office.  This product possesses a unique piece of the market offered
by few others.

Customers  acquire the product through  referrals to EBS or contacts through the
sales  organization.  EBS derives revenue from these products based upon sale of
software and  hardware,  annual  service  maintenance  agreement  payments,  and
monthly transactional fees.

ACESTM  provides a very flexible  quality  control  system.  ACESTM  remains the
choice of the nation's largest mortgage  companies who did not develop their own
system  in  house.   Utilization  of  the  ACESTM  product  offers   substantive
opportunity for expansion.  As the financial value of quality receives  expanded
knowledge in the industry, the demand for a tracking and evaluation product will
continue to grow. Furthermore, the increased utilization of automated processing
and  underwriting  systems will necessitate the evaluation of the basic premises
under which these systems make decisions.  The analysis of the output of quality
assurance  system  will  determine  the  changes  that  need to be made to these
processing and underwriting systems.

Customers  acquire the product through  referrals to EBS or contacts through the
sales  organization.  EBS derives revenue from these products based upon sale of
software and hardware, annual service maintenance agreement payments, or monthly
transactional fees.

Outsourcing provides substantial growth opportunities for EBS. Utilizing ACESTM,
the  Outsourcing  function can support  existing  ACESTM users when the cyclical
industry grows, as well as provide the

                                        5

<PAGE>



base loan review  function  allowing  companies  to allocate  limited  financial
resources  to  evaluating  results  and  targeting  reviews  based upon  adverse
findings.

Fundamentally,  companies  of any size can utilize the  Outsourcing  function to
build upon their  internal  quality  assurance  function and build  results into
improving the system.  Customers  contract for the product through  referrals to
EBS or contacts through the sales organization.

Each of the individual  business  segments of CRISTM,  EBS XchangeTM,  the Merge
Center,  ACESTM, and ACES Outsourcing are in growth markets that can be expanded
with demand and increased functionality of CRISTM, EBS XchangeTM, and ACESTM.

Competition

Both CRISTM and EBS XchangeTM  penetrate a sizeable portion of the market.  Both
systems receive widespread  industry knowledge of the products and enter in each
application  decision  for credit  reporting  systems.  Other  credit  reporting
systems exist from other  companies,  most of which are privately held.  Because
the  Transactional  / Merge  Center  operates  on the CRISTM  and EBS  XchangeTM
systems, other national privately held companies' credit reporting systems exist
that offer this service.

Competition  for ACESTM  exists from one private  non-mortgage  banking  company
which provides a system  nationally and from large national  mortgage  companies
developing their own proprietary  system  internally,  but these systems are not
sold.

Quality Assurance  Outsourcing  competition  exists from many local and regional
privately held companies. Several national companies also provide this service.

Backlog

At December  31, 1996,  EBS' has no contract  backlog.  Revenues  from sales are
recorded upon software delivery,  hardware delivery,  and training. EBS provides
all products and services within contractual requirements.  EBS has entered into
one to two year  contracts  for services  which  obligate  customers to specific
minimum transactions with EBS.

Executive Office

     The executive  offices of the Company and EBS are located at 4400 W. Sample
Rd., Coconut Creek, Florida 33073. (Telephone (954) 968-2080).

Employees

EBS currently employs  approximately 43 people.  None of the employees are union
members and are not covered  under any  collective  bargaining  agreements.  EBS
considers relations with its employees to be good.



                                        6

<PAGE>



Patents and Trademarks

EBS holds a number of trademarks and servicemarks  covering various products and
processes  relating  to its  business.  EBS  believes  that its  trademarks  are
important  and  highly  recognized  by  customers  in the credit  reporting  and
mortgage  banking  markets as providers of quality credit  reporting and quality
assurance  software  and  services.  EBS has  four  registered  and two  pending
trademarks.

Insurance

EBS maintains  insurance  with respect to its  properties and operations in such
form, in such amounts and with such  insurers as is customary in the  businesses
in which EBS is engaged.  EBS believes that the amount and form of its insurance
coverage are adequate at the present time.

Research and Development

EBS research and  development  activities are focused at the present time on the
optimization of performance and design of the ANSI X.12 communication  protocol.
EBS' programmers are engaged in research and development. 24% of the programming
resources are spent on developing and completing new products.

ITEM 2.           PROPERTIES

EBS leases a facility in Coconut  Creek,  Florida  consisting  of  approximately
8,300 square feet of office and research and development  space. The Company has
a lease through May, 1998, at a base monthly rental of approximately  $6668. The
Company  believes  that the space it  currently  occupies  is  adequate  for the
Company's needs for the foreseeable future.

ITEM 3.           LEGAL PROCEEDINGS

In January of 1996, Columbia Credit Bureau (the "Plaintiff") commenced an action
in the Supreme Court of the State of Florida against the Company seeking damages
in the amount of $32,000.  The Company is of the opinion that the claim  against
it is without  merit and the Company will  prevail.  Although the outcome of the
claim  cannot  be  predicted,  EBS does not  believe  that the  results  of this
litigation will have a material effect on EBS.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of the fiscal year ended December 31, 1996.







                                        7

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                                     PART II


ITEM 5.           MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                  STOCKHOLDER MATTERS

The  Company's  Common  Stock is traded on the NASDAQ  Bulletin  Board under the
symbol TRIG.  As of March 25,  1996,  there were  approximately  1250 holders of
record of the Company's Common Stock.

The following table sets forth,  for the fiscal periods shown,  the high and the
low sales  prices for Triangle  Common Stock as reported on the NASDAQ  Bulletin
Board.  These prices are based on quotations  between dealers and do not reflect
retail mark-up, mark-down or commissions.

COMMON STOCK                                     HIGH                      LOW

Calendar 1996                                     .40                      .09
October 1 through December 31                     .40                      .11
July 1 through September 30                       .17                      .09
April 1 through June 30                           .15                      .12
January 1 through March 31                        .18                      .15

Calendar 1995
Annual                                           5.00                      .15


On March 25, 1997, there were 5,660,166 shares outstanding.

The Company has never paid  dividends on its shares of Common Stock and does not
expect to pay any in the  immediate  future.  The future  dividend  policy  will
depend on the Company's earnings, capital requirements,  financial condition and
other factors considered relevant to the Company's ability to pay dividends.

ITEM 6.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

General

Prior to December 2, 1996,  the  Company's  primary  focus was to search for and
identify  acquisition  candidates  for the purpose of merging  with or acquiring
promising  young  companies  in need of an  infusion  of  cash  and/or  superior
management. On December 2, 1996, the Company completed the acquisition of 95% of
the stock of Engineered Business Systems, Inc., in a leveraged transaction.
Total value of the transaction was approximately $3 Million.

Reocurring  sales in the CRISTM and ACESTM product lines  constituted 66% of the
Company's  revenues in the fiscal year 1996.  Sales from the ACESTM product line
contributed  12% of the  reoccurring  sales for the  fiscal  year 1996 while the
remaining 54% of the revenues contributed to reoccurring sales were derived from
the CRISTM  product line.  New sales of CRISTM  products  constituted  8% of the
Company's revenues for fiscal year 1996 and new sales of ACESTM products

                                        8

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comprised 14% of the revenues.  Outsourcing revenues accounted for approximately
12% of the Company's  revenues in fiscal 1996. The company's  total revenues for
the fiscal  year 1996 were  $302,196,  which is an increase  over the  Company's
fiscal year 1995  revenues of $0.00.  The increase  resulted  entirely  from the
acquisition of Engineered  Business Systems,  Inc. (EBS) on December 2, 1996 and
the results of EBS's  operations  for the one month period  ending  December 31,
1996.

Cost of sales was $51,704 in fiscal 1996,  which again was an increase  over the
Company's fiscal year 1995 cost of sales of $0.00.  Gross profit as a percentage
of revenue was 83% in fiscal  1996.  The  increase  resulted  entirely  from the
acquisition of EBS on December 2, 1996, and the results of EBS's  operations for
the one month period ending December 31, 1996.

Selling  general  and  administrative  expenses  were  $218,247  in fiscal  1996
compared to $65,915, an increase of 231%.  Management believes that the increase
in selling,  general and  administrative  expenses was due to the acquisition of
EBS  and  the  expenses  related  to its  operations,  compared  to the  minimal
operating  expenses  associated with a non-revenue  producing company for fiscal
year 1995.  Non-cash  imputed  compensation for the fiscal year 1996 was $73,960
compared to $437,250  for fiscal 1995.  The  decrease  was due to the  Company's
ability to pay cash  compensation  during  fiscal 1996, as well as a decrease in
the number of  consultants  during  1996,  due to the  acquisition  of EBS,  its
revenue stream and personnel.

The  Company's  net income in fiscal  year 1996  includes  non-cash  expenses of
approximately $15,480 and a litigation settlement of $35,000. Such expenses were
incurred as a result of  depreciation  and  amortization of assets acquired with
the  acquisition  of EBS as well as the  goodwill  created  in the  acquisition.
Litigation  expenses  related to the settlement,  in full, of a suit against the
Company, by the issuance of 350,000 shares of Common Stock, with a $0.10 basis.

Interest expense was $10,192 in 1996, compared to $0.00 in the fiscal year 1995,
reflecting interest paid on an 8% promissory note of $1,600,000.  The promissory
note is held by the selling  shareholders of EBS, created during the sale of EBS
to the Company. Minority interest for the fiscal year 1996 was $4,098 reflecting
interest due to holders of the 5% of EBS Stock.

The  Company's  net loss for fiscal year 1996,  was $99,040  compared to the net
loss of $503,165  for the fiscal year 1995.  The net loss in fiscal year 1996 is
primarily  attributed to a combination of all the factors  discussed above, plus
acquisition costs related to the acquisition of EBS.

Liquidity and Capital Resources

The Company has funded its working capital and capital expenditure  requirements
from  cash  provided  from  operations  and  from  the  proceeds  of the sale of
Preferred  Stock.  The  primary  source of cash  receipts is from  payments  for
CRISTM, EBS XchangeTM, ACESTM and Outsourcing Sales and accounts receivables.

At December  31,  1996,  the Company had cash of $200,264 as compared to cash of
$1,371 at December  31,  1995.  The increase is due to the issuance of Preferred
Stock for the acquisition of EBS and the cash flow from the operations of EBS.

In  December of 1996,  the Company  acquired  EBS for  $896,000 in cash,  a note
payable to EBS' shareholders for $1,600,000,  and, 500,000  restricted shares of
the  Company's  stock.  The $896,000 of cash was funded as follows:  $596,000 as
acquired from EBS and $300,000 in new cash raised from

                                        9

<PAGE>



the sale of Preferred Stock.

As of March 25, 1997, the Company has substantially  increased its cash position
and its working capital and on a monthly basis is showing an increasing positive
cash flow.

ITEM 7.           INFLATION

To date, inflation has not had a material effect on the Company's business.  The
Company  believes  that the  effects of future  inflation  may be  minimized  by
controlling costs and increasing efficiency through an increase in the volume of
MRI examinations performed.

The Company is including the following cautionary statement in its Annual Report
on Form 10-K to make applicable and take advantage of the safe harbor provisions
of the Private Securities  Litigation Reform Act of 1995 for any forward-looking
statements  made by,  or on behalf of the  company.  Forward-looking  statements
include  statements  concerning plans,  objectives,  goals,  strategies,  future
events or performance and underlying  assumptions and other statements which are
other than statements of historical facts.  Certain statements  contained herein
are  forward-looking  statements and accordingly involve risks and uncertainties
which could cause  actual  results or outcomes to differ  materially  from those
expressed in the forward-looking statements. The Company's expectations, beliefs
and projects are expressed in good faith and are believed by the Company to have
a reasonable basis, including without limitations,  management's  examination of
historical  operating trends,  data contained in the Company's records and other
data  available  from  third  parties,  but  there  can  be  no  assurance  that
management's expectations,  beliefs or projections will result or be achieved or
accomplished.  In addition to other  factors  and  matters  discussed  elsewhere
herein, the following are important factors that, in view of the Company,  could
cause  actual  results  to  differ   materially  from  those  discussed  in  the
forward-looking statements: technological advances by the Company's competitors,
changes in health care reform,  including reimbursement programs,  capital needs
to fund any  delays or  extensions  of  research  programs,  delays  in  product
development,  lack of market  acceptance of technology and the  availability  of
capital  on  terms  satisfactory  to the  Company.  The  Company  disclaims  any
obligation  to  update  any  forward-looking  statements  to  reflect  events or
circumstances after the date hereof.

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Item 14 and the Index therein for a listing of the financial  statements and
supplementary data as part of this report.

ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE

On December 30, 1996,  Feldman  Radin & Co.,  P.C.  resigned as the  independent
accountants for Triangle  Imaging Group,  Inc. During the two most recent fiscal
years there have been no  disagreements  with Feldman  Radin & Co.,  P.C. on any
matter of accounting principles or practices, financial statement disclosure, or
auditing  scope or procedure or any  reportable  events.  Similarly,  during the
interim  period from January 1, 1996 to the dismissal date of December 30, 1996,
there have been no disagreements with Feldman Radin & Co., P.C.

On February 2, 1997,  Triangle Imaging Group, Inc. engaged Mazars & Guerard
as its independent accountants.
                                       10

<PAGE>





                                    PART III

ITEM 10.          DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
                  PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
                  ACT

Information Regarding Present Directors and Executive Officers

The following  table sets forth  certain  information  concerning  the Company's
current directors and executive officers:

NAME                          AGE         POSITION

Vito A. Bellezza              58          President, Chief Executive Officer,
                                            Chairman and Director
Peter J. Bellezza             62          Director
Franz A. Fideli               74          Director

Officers and  directors  are elected on an annual  basis.  The present terms for
each director will expire at the next annual meeting of  shareholders or at such
time as a successor is duly  elected.  Officers  serve at the  discretion of the
Board of Directors.  Vito Bellezza and Peter  Bellezza are brothers.  Except for
the foregoing,  there are no family relationships between any of the officers or
directors.

The  following  is a  biographical  summary of the  business  experience  of the
directors and executive officers of the Company:

Vito A.  Bellezza Mr.  Bellezza has served as President and Chairman of the
Company since 1994, and also serves as CEO of EBS, its operating subsidiary. Mr.
Bellezza has served as President of Omnicap Corp., a merchant banking firm since
June of 1993.  Additionally,  since 1981, Mr. Bellezza has served as a President
of  Wealthmasters,  a financial  planning  firm.  Mr.  Bellezza  has served as a
licensed  sales  executive  for US Life  Equity  Sales  from  1980  to 1995  and
currently for Redstone Securities,  and since 1967, Mr. Bellezza has served as a
sales representative of New York Life Insurance Co.
Peter J.  Bellezza Mr.  Bellezza  has served as a Director of the Company  since
1994.  Prior to joining the Company,  Mr.  Bellezza served as President and 100%
owner of Alpha Systems, Inc., a manufacturer and marketer of high vacuum valves,
from 1968 to 1992.

Franz A. Fideli Mr.  Fideli has served as a director  of the company  since
1994. Mr. Fideli, a professional  engineer, has served as President and owner of
Fideli Associates Consulting,  a heating,  ventilation and air conditioning firm
since 1985.






                                       11

<PAGE>



ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

The following  tables sets forth,  as of March 25, 1997, the number of shares of
the Company's Common Stock beneficially  owned, or as to which there was a right
to acquire  beneficial  ownership within 60 days, by each beneficial owner known
to own more than five percent of the Company's  Common Stock,  by each director,
each  executive  officer  and  all  directors,  nominees  for  director  and all
executive officers, directors and nominees for director as a group.
<TABLE>
<CAPTION>

Name and Address of                 Amount and Nature of               Title of                  Percent
Beneficial Owner                    Beneficial Ownership (1)           Class or Series           of Class
<S>                                <C>                                <C>                       <C>

Vito A. Bellezza                               2,036,150 (2)           Common                    36.00%
12 S. Penataquit Avenue
Bay Shore, NY  11706

Peter J. Bellezza                                 47,500               Common                      .8%
4250 N A1A, Apt. 506
N. Hutchinson Island, Fl 33449

Franz A. Fideli                                   57,500               Common                     1.0%
820 Bird Bay Way
Venice, FL  34292

Charles Moche                                  1,120,000               Common                    19.8%
196 Maple Street
Englewood, NJ  07631

Elaine Oppenheimer                               500,000               Common                     8.8%
466 Golf Course Dr.
Leonia, NJ  07605

Marc Oppenheimer                                 160,000               Common                     2.8%
466 Golf Course Dr.
Leonia, NJ 07605

Steven Sherb                                     500,000               Common                     8.8%
80 Coachman Place West
Muttontown, NY  11791

Irving Bass                                      250,000               Common                     4.4%

Harold Schwartz                                  248,000               Common                     4.4%
c/o Jeffrey L. Greenberg, Esq.
5550 Glades Rd. Ste 401
Boca Raton, FL 33431
</TABLE>

     (1) Unless noted otherwise,  all shares indicated as beneficially owned are
held of record by, and the right to vote and transfer  such shares lies with the
person indicated.

     (2)Includes  385,000  shares held of record by Omnicap Corp., a corporation
controlled  by Mr.  Vito  Bellezza.  Excludes  13,500  shares  held by the adult
children of Vito  Bellezza,  with respect to which Mr.  Bellezza  disclaims  any
beneficial interest.

                                       12

<PAGE>



ITEM 12.          EXECUTIVE COMPENSATION

The Company paid $10,000 as compensation to its current  President,  during 1996
and the  Company  has  paid no  compensation  exceeding  $100,000  to any of its
current Officers during the preceding three years.

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During 1996,  the Company  issued an aggregate of 665,000 shares of Common Stock
to various  officers  and  directors of the Company as an  inducement  for their
services and certain  contributions  to the Company.  Such shares were issued as
follows:  Vito Bellezza 350,000 shares for $18,500 in debt  cancellation;  Peter
Bellezza  20,000  shares for  service on the Board of  Directors;  Franz  Fideli
20,000  shares for  service on the Board of  Directors;  Vito  Bellezza  275,000
shares for service on the Board of Directors.

Additionally,  the Company  sublets its  executive  offices from  Omnicap  Corp.
Effective  October 1, 1995,  the company sublet space and  secretarial  services
from Omnicap Corp. at a rate of $1,000 per month.  As of December 31, 1996,  all
rents with respect to the Company's  executive  offices had been accrued but not
paid.

As of January 2, 1997,  the Company  relocated its Corporate  Offices to 4400 W.
Sample Rd., Coconut Creek,  Florida 33073, and all agreements with Omnicap Corp.
with respect to rent and secretarial services have been terminated.

                                     PART IV

ITEM 14.          EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits
                                                                    Sequentially
Exhibit                                                             Numbered
Number   Description of Exhibit                                     Page

 3.1     Articles of Incorporation, as amended.......                    *
 3.2     Bylaws, as amended..........................                    *
 4.1     Specimen Common Stock Certificate - incorporated                *

 *       Incorporated by reference pursuant to Exchange Act Rule 12b-23.

(b)      Reports on Form 8-K

         Form 8-K          Dated December 31, 1996
         Form 8-K          Dated December 20, 1996
         Form 8-K/A        Dated March 4, 1997







                                       13

<PAGE>



Employment Agreements

VITO A. BELLEZZA

Vito A.  Bellezza  entered  into an  Employment  Agreement  with the  Company on
December 2, 1996, as President of Triangle Imaging Group,  Inc. The Agreement is
for an initial term of three years,  or, until such time as the promissory  note
to the  Sellers  of EBS is paid  off.  Compensation  is at the rate of  $120,000
annually with bonus  arrangements  based on quarterly profit goals as set by the
Board of Directors.  The Agreement also entitles Mr.  Bellezza to receive 10% of
the outstanding stock of EBS. Additionally, a temporary living allowance, moving
expenses and a car allowance is included along with a limited amount of life and
health insurance coverage.

HAROLD S. FISCHER

Harold S. Fischer  entered into an Employment  Agreement with EBS on January 13,
1997,  as  President.  The  Agreement  is  for an  initial  term  of  one  year.
Compensation is at the rate of $120,000 annually with bonus  arrangements  based
on quarterly  profit goals as set by the Board of Directors.  The Agreement also
entitles  Mr.  Fischer  to  receive  10%  of  the  outstanding   stock  of  EBS.
Additionally,  a temporary living allowance, moving expenses and a car allowance
is included along with a limited amount of life and health insurance coverage.

ALBERT J. BRIGGS

Albert J. Briggs entered into an Employment Agreement with EBS on March 1, 1997,
as  Vice  President.  The  Agreement  is  for  an  initial  term  of  one  year.
Compensation is at the rate of $60,000 annually with bonus arrangements based on
quarterly  profit  goals  as set by the  Board  of  Directors.  Additionally,  a
temporary  living  allowance,  moving  expenses and a car  allowance is included
along with a limited amount of life and health insurance coverage.

ITEM 15.          STOCK OPTIONS

At December  31,  1996,  there were  3,100,000  outstanding  options to purchase
shares  of  Common  Stock  at  prices  ranging  from  $.05  to $.20  per  share,
exercisable through December 2, 1998.

















                                       14

<PAGE>



                                   SIGNATURES

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

Dated: March 31, 1997           TRIANGLE IMAGING GROUP, INC.

                                By:
                                Vito Bellezza, Chairman of the Board,
                                President, Chief Financial Officer, Chief
                                Executive Officer and Director



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

Name                 Title                                       Date


/s/ Vito Belleza     Chairman of the Board,                      March 31, 1997
Vito Bellezza        President, Chief Financial Officer,
                     Chief Executive Officer and Director


/s/ Peter Belleza    Director                                    March 31, 1997
Peter Bellezza



/s/ Franz Fideli     Director                                    March 31, 1997
Franz Fideli
















                                       15


<PAGE>



                   TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARY

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 1996 AND 1995




                                                                          Page
                                                                          Number

INDEPENDENT AUDITORS' REPORT..............................................F-2

INDEPENDENT AUDITORS' REPORT..............................................F-3

CONSOLIDATED BALANCE SHEET............................................... F-4

CONSOLIDATED STATEMENTS OF OPERATIONS.....................................F-5

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY.......................... F-6

CONSOLIDATED STATEMENTS OF CASH FLOWS.....................................F-7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS................................F-8-15










                                      F-1

<PAGE>








                          INDEPENDENT AUDITORS' REPORT


To the Stockholders and Board of Directors
Triangle Imaging Group, Inc. and Subsidiary

         We have  audited the  consolidated  balance  sheet of Triangle  Imaging
Group, Inc. and Subsidiary as of December 31, 1996 and the related  consolidated
statements of operations, stockholders' equity and cash flows for the year ended
December 31, 1996.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.

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

         In our opinion,  the  financial  statements  referred to above  present
fairly,  in all material  respects,  the financial  position of Triangle Imaging
Group,  Inc. and  Subsidiary  as of December  31,  1996,  and the results of its
operations and its cash flows for the year ended December 31, 1996 in conformity
with generally accepted accounting principles.







                                                    /s/ Mazars & Guerard, LLP
                                                    Mazars & Guerard, LLP
                                                    Certified Public Accountants

New York, New York
March 27, 1997


                                       F-2

<PAGE>









                          INDEPENDENT AUDITORS' REPORT


To the Stockholders and Board of Directors
Triangle Imaging Group, Inc.

         We have audited the balance sheet of Triangle Imaging Group, Inc. as of
December 31, 1995 and the related statements of operations, stockholders' equity
and cash flows for the year ended December 31, 1995. These financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audit.

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

         In our opinion,  the  financial  statements  referred to above  present
fairly,  in all material  respects,  the financial  position of Triangle Imaging
Group,  Inc. as of December 31, 1995,  and the results of its operations and its
cash flows for the year ended  December 31, 1995 in  conformity  with  generally
accepted accounting principles.







                                                    /s/Feldman Radin & Co., P.C.
                                                    Feldman Radin & Co., P.C.
                                                    Certified Public Accountants

New York, New York
June 12, 1996


                                       F-3

<PAGE>

                  TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 1996



                                     ASSETS


CURRENT ASSETS:
     Cash and cash equivalents                               $          200,264
     Accounts receivable, net of allowance for
         doubtful accounts of $65,000                                   369,868
     Prepaid expenses                                                    31,275
                                                                ----------------
         TOTAL CURRENT ASSETS                                           601,407

EQUIPMENT                                                               191,716

GOODWILL                                                              1,920,478

OTHER ASSETS                                                              4,097
                                                                ----------------

                                                             $        2,717,698
                                                                ================

                      LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES:
     Accounts payable and accrued expenses                   $          271,175
     Deferred revenue                                                   347,203
     Due to stockholders                                                 50,000
     Current portion of note payable                                    200,000
                                                                ----------------
         TOTAL CURRENT LIABILITIES                                      868,378

NOTE PAYABLE                                                          1,400,000

MINORITY INTEREST                                                        40,540

STOCKHOLDERS' EQUITY:
     Preferred stock,$1.00 par, 1,000,000 shares
         authorized:
         Class A, 10,000 shares issued and
         outstanding                                                     10,000
         Class B, 75,000 shares issued and
         outstanding                                                    300,000
     Common stock, $.001 par value, authorized
         50,000,000 shares, 5,153,166 shares issued
         and outstanding                                                  5,153
     Additional paid-in capital                                       1,722,611
     Accumulated deficit                                             (1,628,984)
                                                                ----------------
            TOTAL STOCKHOLDERS' EQUITY                                  408,780
                                                                ----------------

                                                              $       2,717,698
                                                                ================





                 See notes to consolidated financial statements.
                                       F-4

<PAGE>

                  TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                    Years ended December 31,
                                             -----------------------------------
                                                   1996               1995
                                             ----------------   ----------------

SALES                                      $         302,196  $        -

COST OF SALES                                         51,704           -
                                             ----------------   ----------------

GROSS PROFIT                                         250,492           -

SELLING, GENERAL AND
     ADMINISTRATIVE EXPENSES                         218,247             65,915

NON-CASH IMPUTED COMPENSATION EXPENSE                 73,960            437,250

LITIGATION SETTLEMENT                                 35,000            -

AMORTIZATION EXPENSES                                  8,035            -
                                             ----------------   ----------------

INCOME (LOSS) FROM OPERATIONS                        (84,750)          (503,165)

INTEREST EXPENSE                                     (10,192)            -
                                             ----------------   ----------------

LOSS BEFORE MINORITY INTEREST                        (94,942)          (503,165)

MINORITY INTEREST                                      4,098              -
                                             ----------------   ----------------

NET LOSS                                  $          (99,040) $        (503,165)
                                             ================   ================

NET LOSS PER SHARE                        $            (0.03) $           (0.26)
                                             ================   ================

NUMBER OF SHARES USED IN COMPUTATION               3,956,415          1,958,168
                                             ================   ================




















                 See notes to consolidated financial statements.
                                       F-5

<PAGE>


                   TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARY

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                     YEARS ENDED DECEMBER 31, 1996 AND 1995

<TABLE>
<CAPTION>

                               Preferred Stock  Preferred Stock
                                   Class A           Class B         Common Stock                                           Total
                              ----------------  ----------------  ------------------    Paid-In   Accumulated  Treasury Stockholders
                               Shares   Amount   Shares   Amount    Shares    Amount    Capital     Deficit      Stock      Equity
                              -------  -------  -------  -------  ---------  -------  ----------  -----------  ---------  ---------
<S>                           <C>      <C>      <C>      <C>      <C>        <C>      <C>         <C>          <C>        <C>

BALANCE - December 31, 1994        -   $    -        -   $    -     692,166  $   692 $ 1,003,256 $(1,024,779) $ (12,115) $ (32,946)

 Shares sold                   10,000   10,000       -        -          -        -           -           -           -     10,000
 Shares issued for services        -        -        -        -   1,800,000    1,800     435,450          -           -    437,250
 Shares issued for
    cancellation of debt           -        -        -        -   1,000,000    1,000      42,021          -           -     43,021
 Net loss                          -        -        -        -          -        -           -     (503,165)         -   (503,165)
                              -------  -------  -------  -------  ---------  -------  ----------  -----------  ---------  ---------

BALANCE - December 31, 1995    10,000   10,000       -        -   3,492,166    3,492   1,480,727  (1,527,944)   (12,115)   (45,840)

 Shares issued for services        -        -        -        -     961,000      961      96,199          -           -     97,160
 Shares issued for legal
     settlement                    -        -        -        -     350,000      350      34,650          -           -     35,000
 Shares issued in acquisition
     of EBS                        -        -        -        -     500,000      500      34,500          -           -     35,000
 Shares issued for settlement
     of debt                       -        -        -        -     350,000      350      18,150          -           -     18,500
 Cancellation                      -        -        -        -    (500,000)    (500)        500          -           -         -
 Cancellation of treasury
     stock                         -        -        -        -          -         -     (12,115)         -       12,115        -
 Sale of options                   -        -        -        -          -         -      70,000          -           -     70,000
 Shares sold                       -        -    75,000  300,000         -         -          -           -           -    300,000
 Dividend payable                  -        -        -        -          -         -          -       (2,000)         -     (2,000)
 Net loss                          -        -        -        -          -         -          -      (99,040)         -    (99,040)
                              -------  -------  -------  -------  ---------  --------  ---------  -----------  ---------  ---------

BALANCE - December 31, 1996    10,000 $ 10,000   75,000 $300,000  5,153,166 $   5,153 $1,722,611 $(1,628,984) $       -  $ 408,780
                              =======  =======  =======  =======  =========  ========  =========  ===========  =========  =========


</TABLE>














                 See notes to consolidated financial statements.
                                       F-6



<PAGE>
                   TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                                     Years Ended December 31,
                                                                                              --------------------------------------
                                                                                                       1996               1995
                                                                                                 ----------------   ----------------
<S>                                                                                          <C>                 <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
       Net loss                                                                                $         (99,040) $        (503,165)
       Adjustment to reconcile net loss to net cash
         provided by operating activities (net of effects of acquisition):
            Depreciation                                                                                   7,445                  -
            Amortization of goodwill                                                                       8,035                  -
            Shares issued for services                                                                    73,962            437,250
            Shares issued for legal settlement                                                            35,000                  -
            Minority interest                                                                              4,098                  -

       Changes in assets and liabilities:
            Increase in accounts receivable                                                              (39,994)                 -
            Increase in prepaid expenses                                                                 (25,800)                 -
            Increase in accounts payable and accrued expenses                                             33,963             57,986
            Increase in deferred revenue                                                                  32,140                  -
                                                                                                 ----------------   ----------------

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                                           29,809             (7,929)
                                                                                                 ----------------   ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Cash paid for acquisition, net of cash acquired                                                  (221,894)                 -
       Purchase of equipment                                                                             (12,522)                 -
                                                                                                 ----------------   ----------------

CASH PROVIDED BY (USED) IN INVESTING ACTIVITIES                                                         (234,416)                 -
                                                                                                 ----------------   ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Proceeds from sale of stock                                                                             -             10,000
       Proceeds from sale of options                                                                      50,000                  -
       Proceeds from sale of preferred stock                                                             300,000                  -
       Increase (decrease) in due to stockholders                                                         53,500               (700)
                                                                                                 ----------------   ----------------

CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                                          403,500              9,300
                                                                                                 ----------------   ----------------

NET INCREASE IN CASH                                                                                     198,893              1,371

CASH - BEGINNING OF YEAR                                                                                   1,371                  -
                                                                                                 ----------------   ----------------

CASH - END OF YEAR                                                                             $         200,264  $           1,371
                                                                                                 ================   ================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
       INFORMATION:
       Cash paid during the year for:
            Interest                                                                           $               -  $               -
                                                                                                 ================   ================
            Taxes                                                                              $               -  $               -
                                                                                                 ================   ================

       Non cash financing and investing activities:
            Issuance of common stock in connection with acquisition of EBS                     $          78,200  $               -
                                                                                                 ================   ================
            Issuance of common stock for cancellation of debt                                  $          18,500  $          43,021
                                                                                                 ================   ================
            Issuance of debt in connection with acquisition of EBS                             $       1,600,000  $               -
                                                                                                 ================   ================
            Dividend payable                                                                   $           2,000  $               -
                                                                                                 ================   ================
</TABLE>
                 See notes to consolidated financial statements.
                                       F-7
<PAGE>



                   TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 1996 AND 1995


1.       BUSINESS

         Triangle Imaging Group,  Inc. and Subsidiary (the "Company"),  formerly
         known as The Triangle  Group,  Inc.,  formerly  Benefit  Performance of
         America,  Inc. ("Benefit") was incorporated under the laws of the State
         of Florida on December  12,  1984.  From 1988 until 1992,  the Company,
         through Old Triangle and various operating subsidiaries,  provided data
         processing consulting and software development  services.  During 1992,
         the  Company   abandoned  the  operations  of  each  of  its  operating
         subsidiaries  and  management of the remaining  public shell set out to
         identify attractive businesses with which to merge or to acquire.

         On December 2, 1996, the Company acquired 95% of the outstanding  stock
         of  Engineered  Business  Systems,  Inc.  ("EBS") (See Note 10). EBS is
         engaged in the business of developing, marketing and supporting various
         software packages primarily of business use.


2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         a.       Principles of  consolidation  - The financial  statements  for
                  year ended  December  31,  1996  include  the  accounts of the
                  Company and its  subsidiary,  EBS. All  material  intercompany
                  transactions have been eliminated.

         b.       Cash and cash  equivalents  - The Company  classifies  as cash
                  equivalents  highly  liquid  temporary   investments  with  an
                  original maturity of three months or less when purchased.

         c.       Equipment  -  Equipment  is stated at cost and is  depreciated
                  over the  estimated  useful lives of the assets using  various
                  accelerated methods which approximates economic depreciation.

         d.       Goodwill  - Goodwill  resulting  from the  acquisition  of EBS
                  represents   the  excess  of  the  purchase   price  plus  the
                  acquisition  costs  over the fair  value of the net  assets of
                  EBS.  Goodwill is  amortized  on a straight  line basis over a
                  period of 20 years. The Company assesses the recoverability of
                  this intangible asset by determining  whether the amortization
                  of  the  goodwill  balance  over  its  remaining  life  can be
                  recovered through projected  undiscounted future cash flows of
                  the acquired companies.

                                       F-8

<PAGE>




         e.       Revenue recognition - Revenue from software sales is generally
                  recognized upon execution of a sales contract, the delivery of
                  the  software  and  completion  of the  major  portion  of the
                  contract requirement.

         f.       Research and development - Research and  development  costs
                  are expensed as incurred.  These costs primarily  consist of
                  fees paid for the development of the Company's software.

         g.       Minority interest - Minority interest  represents the minority
                  stockholders'  proportionate  share of the equity in EBS which
                  was 5% at December 31, 1996.

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

         i.       Fair value of financial  instruments  - The  carrying  amounts
                  reported  in the  balance  sheet  for cash,  receivables,  and
                  accrued   expenses   approximate   fair  value  based  on  the
                  short-term maturity of these instruments.

         j.       Stock  based  compensation  - The Company  accounts  for stock
                  transactions   in   accordance   with  APB   Opinion  No.  25,
                  "Accounting For Stock Issued To Employees" and has adopted the
                  disclosure-only  option under SFAS No. 123, as of December 31,
                  1995.  If the  accounting  provisions of the new Statement had
                  been adopted as of the beginning of 1995,  the effects on 1995
                  and 1996 net earnings would have been immaterial.

         k.       Impairment  of long - lived  assets - The  Company has adopted
                  Statement  of   Financial   Accounting   Standards   No.  121,
                  "Accounting  For The  Impairment Of Long- Lived Assets And For
                  Long-Lived  Assets To Be  Disposed  Of" as of January 1, 1996.
                  Such adoption had no material effect on the financial position
                  of the Company.

         l.       Earnings  (Loss)  Per Share -  Earnings  (loss)  per share are
                  computed on the basis of the weighted average number of common
                  shares and common  stock  equivalents  outstanding  during the
                  respective  periods after  reducing the net loss for preferred
                  stock dividends.  Per share amounts give retroactive effect to
                  all recapitalizations.





                                       F-9

<PAGE>



3.       EQUIPMENT

         Equipment at December 31, 1996 consisted of the following:


                               Estimated
                              useful lives
                          --------------------
Computer hardware                 5-7             $           124,051
Computer software                  5                           35,575
Office furniture                   7                           13,945
Office equipment                  5-7                          25,590
                                                      ----------------
                                                              199,161
Less: Accumulated depreciation                                  7,445
                                                      ----------------
                                                  $           191,716
                                                      ================


4.       DEFERRED REVENUE

         At December  31,  1996,  deferred  revenue of $347,203  represents  the
         unearned portion of sales related to software  maintenance  agreements.
         Deferred  revenue  is  recognized  as income on a straight - line basis
         over the service  contract  terms  which are  generally  for  renewable
         twelve month periods.


5.       DUE TO STOCKHOLDERS

         Amounts due to stockholders are non-interest bearing advances which are
         repayable on demand.


6.       NOTE PAYABLE

         On December 2, 1996 in  connection  with the  acquisition  of EBS,  the
         Company  entered  into a  $1,600,000  promissory  note with the  former
         stockholders  of EBS. The note presently bears interest at a rate of 8%
         per annum with the interest  rate  determined  annually,  at a rate per
         annum equal to the Prime Rate less one quarter percent,  with a minimum
         and  maximum  rate of 8% and 9% per annum,  respectively.  Payments  of
         interest  only  are  due  and  payable  on the  first  day of  January,
         February,  March and April 1997,  thereafter principal shall be payable
         in equal installments of $25,000 each together with interest commencing
         in May 1997 through  January 2000 when all  outstanding  principal  and
         interest is due.




                                      F-10

<PAGE>



         The  note  is  secured  by a  Stock  Pledge  Agreement  and a  Security
         Agreement.  Under the Stock  Pledge  Agreement,  the Company  agreed to
         pledge all of its stock of EBS as security for the note.  Additionally,
         under the Security Agreement,  the note is collateralized by all assets
         of the Company.

         Principal payments under the note through January 2000 are as follows:

1997                                           $              200,000
1998                                                          300,000
1999                                                          300,000
2000                                                          800,000


7.       STOCKHOLDERS' EQUITY

         a.       On April 7, 1995, the Company declared a one for ten reverse
                  stock split.  All common share data has been restated to
                  reflect this recapitalization.

         b.       In May 1995,  the  Company  issued a  dividend  in the form of
                  common  stock  warrants  to each  holder of common  stock.  An
                  aggregate of 1,202,126  warrants  were issued and each warrant
                  is convertible into one share of common stock at a price of $5
                  expiring on August 1, 1996. The warrants expired in 1996.

         c.       During  September  1995 the Company sold for  $10,000,  10,000
                  shares of Class A,  $1.00  par  value,  convertible  preferred
                  stock to an individual who serves as its President. Each share
                  is  entitled  to 500  votes and the  holder  of the  shares is
                  entitled to elect a majority of the board of  directors  for a
                  period of three years. The shares do not pay any dividends and
                  each  share is  convertible  into 150  shares of common  stock
                  until  March  27,   1999  and  100  shares  of  common   stock
                  thereafter.

         d.       In October 1995 the Company issued 1,000,000 shares of common
                  stock to its President in exchange for the cancellation of
                  indebtedness totaling $43,021.

         e.       A total of  1,800,000  shares of common  stock were issued for
                  services  during the year ended December 31, 1995. Such shares
                  have been valued at their  estimated  fair market value on the
                  date of issuance  resulting in a non-cash  charge to income of
                  $437,250.

         f.       In December 1996, the Company sold for $300,000, 75,000 shares
                  of Class B, $1.00 par value  convertible  preferred stock. The
                  shares pay cumulative dividends at the rate of 8% per year and
                  are convertible into 1,500,000 shares of common stock.


                                      F-11

<PAGE>



         g.       In December 1996,  the President of the Company  purchased for
                  $50,000,  1,000,000  options to purchase common stock at $0.05
                  per share which expire in  December,  1999.  In addition,  the
                  President  also received  500,000  options to purchase  common
                  stock at $.20 per share which  expire in December,  1999.  The
                  difference between the options' estimated fair market value at
                  the date of  issuance  and the amount paid for the options has
                  been recorded as compensation of $20,000.

         h.       A total of  961,000  shares of common  stock  were  issued for
                  services  during the year ended December 31, 1996. Such shares
                  have been valued at their  estimated  fair market value on the
                  date of issuance  resulting in a non-cash  charge to income of
                  $53,960 and $43,200 was capitalized.

         i.       In December 1996,  the Company issued to a consultant  500,000
                  options  to  purchase  common  stock at $.20 per  share  which
                  expire in December, 1999.

         j.       During 1996, the Company  exchanged  $18,500 of amounts due to
                  the  President of the Company  into  350,000  shares of common
                  stock.  In addition,  the Company  settled a legal dispute for
                  350,000 shares of common stock valued at $35,000.

         k.       In January 1997 the Company  issued  600,000  stock options to
                  three  consultants to purchase common stock at $0.20 per share
                  which expire in January, 2000. In addition, the Company issued
                  500,000 shares of common stock for consulting services.


8.       INCOME TAXES

         The Company  accounts  for income  taxes under  Statement  of Financial
         Accounting  Standards No. 109, "Accounting for Income Taxes" ("SFAS No.
         109"). SFAS No. 109 requires the recognition of deferred tax assets and
         liabilities  for both the expected  impact of  differences  between the
         financial  statements and tax basis of assets and liabilities,  and for
         the  expected  future tax  benefit to be derived  from tax loss and tax
         credit   carryforwards.   SFAS  No.  109   additionally   requires  the
         establishment  of a valuation  allowance to reflect the  likelihood  of
         realization  of deferred tax assets.  At December 31, 1996, the Company
         had net deferred tax assets of $500,000.  The Company has established a
         valuation  allowance  for the full amount of such  deferred tax assets.
         The  following  table  gives the  Company's  deferred  tax  assets  and
         (liabilities) at December 31, 1996:


Net operating loss carryforward                       $                 500,000
Valuation allowance                                                    (500,000)
                                                            --------------------
                                                      $                       -
                                                            ====================


                                      F-12

<PAGE>



         The  provision  for income  taxes  (benefits)  differs  from the amount
         computed by applying the  statutory  federal  income tax rate to income
         (loss) before income taxes as follows:

                                                      Year ended December 31,
                                           -------------------------------------
                                                   1996                  1995
                                           ---------------       ---------------
Income tax (benefit) computed
  at statutory rate                      $       (18,100)        $     (176,108)
Effect of permanent difference                    10,000                 35,000
Tax benefit not recognized                         8,100                141,108
                                           ---------------       ---------------
Provision for income taxes (benefit)     $           -           $         -
                                           ===============       ===============

         The Company  has net  operating  loss  carryforwards  for tax  purposes
         totaling approximately  $1,600,000 at December 31, 1996 expiring in the
         years 2005 to 2011.  Substantially all of the carryforwards are subject
         to  limitations  on  annual  utilization   because  there  are  "equity
         structure shifts" or "owner shifts" involving 5% stockholders (as these
         terms are defined in Section 382 of the Internal  Revenue Code),  which
         have  resulted  in a more than 50%  change  in  ownership.  The  annual
         limitation is based on the value of EBS as of the date of the ownership
         change  multiplied by the applicable  Federal Long Term Tax Exempt Bond
         Rate.  In June 1995 the Company  triggered a section 382 net  operating
         loss limitation on the cumulative net operating loss  carryforwards  of
         approximately $1,300,000.  Utilization of such net operating losses are
         limited to $100,000 per annum.


9.       COMMITMENTS

         a.       The Company leases office space in Coconut Creek, Florida.
                  At December 31, 1996, the future minimum lease payments under
                  the operating leases which expire in May 1998 are as follows:

                  1997                                            $       76,000
                  1998                                                    31,000

         b.       The Company has employment agreements with two officers and
                  an employee of the Company.  The agreements expire in January
                  1998 and January 2000.  Minimum commitments under  these
                  agreements are as follows:

                  1997                                          $        350,700
                  1998                                                   126,600
                  1999                                                   126,600
                  2000                                                    10,550

                  The agreements also provide for incentive bonuses based
                  on profit criteria and the

                                      F-13

<PAGE>



                  payment of various expenses.  In addition,  the agreement with
                  the  President and CEO of EBS entitles each of them to receive
                  10% of the outstanding stock of EBS. Additionally, the Company
                  has guaranteed the sale of the President's  house in an amount
                  equal to an MAI appraisal.


10.      ACQUISITION

         On  December  2,  1996,  95% of the  stock of EBS was  acquired  by the
         Company for $896,000 in cash, a note payable to EBS's  shareholders for
         $1,600,000 and 500,000  restricted shares of the Company's common stock
         with certain piggy back  registration  rights and  restrictions.  EBS's
         shareholders  also have certain  anti-dilution  provisions  and selling
         rights tied to the President's  personal stock  holdings,  which expire
         upon the earlier of the a)  registration  of the restricted  shares and
         the  payment  of all  obligations  to the EBS's  shareholders  or b) on
         January 2, 2000 and payment of all  obligations to EBS's  shareholders.
         The  acquisition  of EBS  has  been  accounted  for as a  purchase  and
         accordingly,  the assets  acquired  and  liabilities  assumed have been
         recorded at their estimated fair values which approximates book value.
         The following table summarizes this acquisition:



Purchase Price, including acquisition costs             $             2,620,915
Liabilities assumed                                                     454,159
Assets acquired                                                      (1,146,561)
                                                            -------------------
Goodwill                                                $             1,928,513
                                                            ===================

         Accumulated amortization on goodwill at December 31, 1996 was $8,035.

         The results of  operations  for EBS for the period  December 2, 1996 to
         December  31,  1996  are  included  in  the  accompanying  consolidated
         financial statements for the year ended December 31, 1996.

         The  following  schedule  combines the  unaudited  pro forma results of
         operations of the Company and EBS for the years ended December 31, 1996
         and 1995,  respectively,  as if the acquisition had occurred on January
         1, 1995 and includes such adjustments  which are directly  attributable
         to the  acquisition.  It should  not be  considered  indicative  of the
         results that would have been achieved had the  acquisition not occurred
         or the  results  that  would  have been  obtained  had the  acquisition
         actually occurred on January 1, 1995.




                                      F-14

<PAGE>




                                                 Year Ended December 31,
                                      ------------------------------------------
                                              1996                     1995
                                      -----------------       ------------------
Net sales                       $            3,296,325    $           3,860,711
Net income (loss)                              155,027                  (30,764)
Net income (loss) per share                       0.04                    (0.02)
Shares used in computation                   3,956,415                1,958,168


11.      RESCINDED ACQUISITION

         During 1995,  the Company had entered  into an  agreement  with Pegasus
         Technologies,  Inc.  to acquire  certain  licenses  related to aircraft
         inspection  technology in exchange for 90% of the Company's  issued and
         outstanding common stock. The Company subsequently learned that Pegasus
         did not own the  rights to the  technologies,  contrary  to what it had
         claimed.  Upon learning of this  situation,  the Company  exercised its
         rights and  rescinded  all aspects of this  transaction.  In connection
         with the rescinded acquisition,  500,000 shares of the Company's common
         stock were canceled during 1996.

                                      F-15