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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                     -------
                                   FORM 10-KSB

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

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

For the fiscal year ended December 31, 1998     Commission File Number 000-25213

                          TRIANGLE IMAGING GROUP, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

               Florida                                    59-2493183
    (STATE OR OTHER JURISDICTION                       (I.R.S. EMPLOYER
  OF INCORPORATION OR ORGANIZATION)                    IDENTIFICATION NO.)

1800 NW 49th Street, Suite 100, Ft. Lauderdale, FL                      33309
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                          (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:               (954) 229-5100
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                     Common Stock, par value $.001 per share

         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. Yes [ X ] No [ ]

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

         Revenues for the Issuer's most recent fiscal year are $7,608,904.

         The aggregate  market value of the voting stock held by  non-affiliates
of the Issuer as of April 20, 1999 was approximately $6,530,960.

         The number of  outstanding  shares of the  Issuer's  common stock as of
April 20, 1999 was 14,143,791 shares. 
                      DOCUMENTS INCORPORATED BY REFERENCE:

         NONE.
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                          TRIANGLE IMAGING GROUP, INC.

                                TABLE OF CONTENTS


PART I                                                                      PAGE

Business......................................................................1
Properties...................................................................15
Legal Proceedings............................................................15
Submission of Matters to a Vote of Security Holders..........................16

PART II

Market for Common Equity and Related Stockholder Matters.....................17
Management's Discussion and Analysis.........................................18
Financial Statements ........................................................20
Changes In and Disagreements With Accountants on Accounting
  and Financial Disclosure...................................................21

PART III

Directors, Executive Officers, Officers, Promoters and Control Persons;
  Compliance with Section 16(a) of the Exchange Act..........................21
Executive Compensation.......................................................25
Security Ownership of Certain Beneficial Owners and Management...............33
Certain Relationships and Related Transactions...............................34

Exhibits, Lists and Reports on Form 8-K......................................37

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ITEM 1   BUSINESS

GENERAL

         Triangle Imaging Group, Inc.  (collectively with the subsidiaries,  the
"Company" or "Triangle") through its operating subsidiaries creates software and
provides services to the mortgage lending and credit agency  industries.  All of
the Company's  business  operations are conducted  through  Engineered  Business
Systems,  Inc. ("EBS") and QuickCREDIT Corp. ("QCC") and its subsidiaries.  EBS,
acquired by the Company in December 1996,  develops and sells  software  quality
assurance  products and services  for the  mortgage  and credit  industry.  QCC,
formed by the Company in February 1998,  acquired  three (3) credit  agencies in
April  and May  1998.  Through  its three (3)  wholly  owned  subsidiaries,  QCC
compiles, organizes and sells comprehensive credit reports to its customers.

HISTORICAL INFORMATION

         The Company was  incorporated in December 1984 as Benefit  Performances
of America,  Inc.  ("Benefit") to engage in the business of promoting  concerts,
shows  and  other  entertainment  productions.  In April  1988,  Benefit  ceased
operations and in September 1988 Benefit  acquired all of the outstanding  stock
of  The  Triangle  Group,  Inc.,  a  data  processing  consulting  and  software
development  firm. In November  1988,  Benefit  changed its name to The Triangle
Group, Inc.  ("Triangle Group"). In September 1992, Triangle Group concluded its
business as a result of  insufficient  working  capital.  From September 1992 to
January  1993,  the Company  had no business  activities  and Vito  Bellezza,  a
minority  stockholder,  approached the Board of Directors regarding the purchase
of the shares of Common Stock held by management and other insiders.  In January
1994, Mr. Bellezza acquired from certain existing stockholders  2,970,000 shares
of  Common  Stock,  representing  52%  of  the  total  shares  of  common  stock
outstanding.

         In April 1995,  Triangle  Group  acquired  Pegasus  Technologies,  Inc.
("Pegasus"),  a company which purportedly owned cutting edge imaging  technology
used for the  inspection of aircraft.  In May 1995,  Triangle  Group,  under the
direction of the principal of Pegasus, changed its name to the Company's current
name, Triangle Imaging Group, Inc. After discovering that Pegasus misrepresented
its  ownership  rights to the  imaging  technology,  the Company  rescinded  the
transaction and canceled certain of the shares issued in connection therewith.

         In December  1996,  the Company  paid an  aggregate  purchase  price of
$2,620,915 to acquire 760 shares of EBS common stock, or 95% of the total number
of shares of EBS common  stock  outstanding.  The  purchase  price  included the
payment of  $896,000 in cash,  500,000  shares of  Triangle  Common  Stock and a
promissory note in the principal amount of $1,600,000 (the "Note"). The Note (i)
bears interest at the prime rate per annum (but no less than 8% and no more than
9% per  annum),  (ii) is  payable  monthly,  (iii) is  secured  by all assets of
Triangle and EBS, and (iv) requires a balloon payment of the balance of the Note
on February 1, 2000.  In December  1997,  the Company  acquired 40 shares of EBS
Common Stock (the remaining 5% of shares  outstanding) for an aggregate purchase

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price of $153,250.  In October 1998,  the Company made an  additional  principal
payment of  $375,000  to reduce  the  balance  of the Note  incident  to certain
capital  raising  activities  of the  Company  as  required  by  the  agreements
ancillary to the purchase by the Company of the EBS Common Stock. Currently, the
principal  balance of the balloon payment of the Note due on February 1, 2000 is
$400,000.

         The  executive  offices  of the  Company  are  located  at 1800 NW 49th
Street, Suite 100, Ft. Lauderdale, FL 33309 (Telephone (954) 229-5100).

RECENT DEVELOPMENTS

         On November 18, 1998, the Board of Directors of the Company  convened a
meeting with all six members of the Board  attending.  Information was presented
concerning  certain  alleged  activities of Vito Bellezza,  the Company's  Chief
Executive  Officer  and  Chairman  of the  Board.  The  members  of the Board of
Directors adopted certain  resolutions which, among other things,  established a
Special  Committee  of the  Board to  investigate  certain  transactions  in the
Company's  common stock which may have involved Mr. Bellezza.  In addition,  Mr.
Bellezza and Judith  Bellezza,  the wife of Mr.  Bellezza and an  administrative
assistant at the  Company,  each agreed to take a two week  vacation  commencing
immediately  during  which  period of time the Special  Committee  (and  special
counsel engaged by the Special Committee (the "Special  Counsel")) could conduct
a prompt and thorough investigation of the alleged transactions.

         On December 1, 1998, the Special Committee  convened a meeting with all
three members of the Committee in attendance. The Committee unanimously resolved
to temporarily  suspend Mr. Bellezza as Chief Executive  Officer and Chairman of
the Board of the Company until such time that Mr. Bellezza provided testimony to
the Special  Committee (and its counsel) and provided the Special Committee with
certain requested documents.

         On December 3, 1998, the Special Committee  convened a meeting with all
three  members of the  Committee in  attendance.  In response to Mr.  Bellezza's
refusal (i) to acknowledge the authority of the Special  Committee,  and (ii) to
respect  and honor the  temporary  suspension  of his duties of Chief  Executive
Officer and Chairman of the Board, the Special Committee unanimously resolved to
engage  counsel to  petition a court of  competent  jurisdiction  to enforce the
temporary suspension of Mr. Bellezza.  On December 9,1998, Mr. Bellezza reported
to the  Board  of  Directors  that a  majority  of  the  Company's  shareholders
allegedly  elected to remove J. Alan Lindauer,  Charles D. Winslow and Harold S.
Fischer as Directors. Mr. Bellezza, Franz Fideli and Peter Bellezza purported to
take certain  actions  pursuant to this disputed vote,  which actions  included,
among other things,  the  termination of Mr. Fischer as President of the Company
and the termination of certain other officers of the Company, including Mr. Greg
J. Seminack, the Company's Vice President-Finance, and Mr. Patrick J. Haney, the
Executive  Vice  President of QCC. On December 17,  1998,  certain  stockholders
filed an Amended  Complaint with the Circuit Court of the 17th Judicial  Circuit
in Broward  County,  Florida (the  "Circuit  Court")  against the Company,  Vito
Bellezza,  Judith  Bellezza,  Franz  Fideli,  a director  of the  Company  since
February 1994, and Peter Bellezza, a director of the Company since February 1994
and the brother of Vito Bellezza, asserting a stockholder derivative action with
respect to the  allegations  involving Mr.  Bellezza.  On December 21, 1998, the

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Court entered an Order  requiring that the parties agree to jointly select a new
special counsel by December 24, 1998 to investigate  the  allegations  involving
Mr. Bellezza.

         As of December 23, 1998,  stockholders holding a majority of the shares
of common  stock  outstanding  of the  Company  voted in favor of a new board of
directors  consisting  of J. Alan  Lindauer,  Charles D.  Winslow  and Harold S.
Fischer,  the Company's  President.  As a result,  Messrs. Vito Bellezza,  Peter
Bellezza  and Franz Fideli are no longer  members of the Board of Directors  and
Mr. Winslow serves as the Company's Chairman of the Board. On December 23, 1998,
the Company also filed a Form 8-A with the  Securities  and Exchange  Commission
(the  "Commission")  which  registered  the  Company's  shares of  common  stock
pursuant to Section  12(g) of the  Securities  Exchange Act of 1934,  as amended
(the "1934 Act"). As a result, the Company is obligated to file periodic reports
with the Commission as required by the 1934 Act.

         On January 14, 1999, a hearing was held before the Circuit Court and an
order was entered on February 22, 1999 (the  "Order").  The Order (i)  appointed
Harold S.  Fischer,  the President and a member of the Board of Directors of the
Company,  as  a  receiver  until  the  next  annual  meeting  of  the  Company's
stockholders, (ii) confirmed the validity of the election of the Company's Board
of Directors  consisting of Harold S.  Fischer,  J. Alan Lindauer and Charles D.
Winslow  by the  Company's  stockholders  as of  December  23,  1998,  and (iii)
required the parties to submit their dispute to non-binding mediation.

         On  February  12,  1999,  the  Special  Counsel  delivered  its  report
documenting the results of its investigation to the Board of Directors. On March
17,  1999,  the Company  terminated  Mr.  Bellezza for "Cause" as defined in his
employment  agreement  with the  Company.  The Board of  Directors  is presently
investigating  whether Company securities presently held by Mr. Bellezza and his
family and associates were validly issued.

         As of April 16, 1999,  shareholders of the Company beneficially holding
an aggregate of 6,368,454  shares of Common Stock,  or 45.7% of the total number
of shares then outstanding,  entered into a Stockholders  Agreement  pursuant to
which the participating  shareholders (the "Participating  Shareholders") agreed
to  certain  matters  pertaining  to the  governance  of  the  Company  and  the
circumstances under which the shares held by the Participating  Shareholders may
be sold or  transferred.  The  Participating  Shareholders  agreed,  among other
things, that (i) at any annual or special meeting of stockholders called for the
purpose of voting on the  election  of  directors,  or by  consensual  action of
stockholders  with  respect to the  election  of  directors,  the  Participating
Stockholders  will vote the shares of the Company's Common Stock held thereby in
favor of the directors nominated by Harold S. Fischer,  the Company's President,
and (ii) except for certain permitted transfers,  each Participating Shareholder
will not sell or transfer  shares of the  Company's  Common  Stock held  thereby
without first granting the Company and then the other Participating Shareholders
with a right  of  first  offer.  Although  the  Company  is not a  party  to the
Stockholders   Agreement,   certain  members  of  management  are  Participating
Shareholders, including Harold S. Fischer, the Company's President.

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ENGINEERED BUSINESS SYSTEMS, INC.

         EBS  designs,  develops,  markets  and  supports  a family of  PC-based
software products for the credit reporting and mortgage banking industries.  EBS
software  products  include (i) the ACES(TM)  Quality Control System,  a quality
assurance  program for mortgage lenders,  (ii) the EBS Xchange(R),  an automated
merged infile system with electronic data interchange  (EDI)  capabilities,  and
(iii) the CRIS(R)  Mortgage  Reporting  System,  credit reporting  software.  In
addition to selling the ACES(TM)  software  program,  EBS also provides ACES(TM)
Quality Control Solutions, an outsourcing service that uses ACES(TM) software to
assist mortgage banking institutions in their quality assurance function.

         In the  second  quarter  of 1998,  EBS  released  two (2) new  software
products.  ACES 98 (a  Windows  95 and  Windows  NT  version  of  ACES(TM))  and
DESC(TM)(Data Evaluation and Selection Criteria module).

         In February 1998, EBS implemented its new consulting services division.
The EBS Consulting  Services  Division,  offers clients extensive  expertise in,
among other things,  mortgage  quality  evaluation,  program risk analysis,  and
operation  reviews that focus on  maximizing  revenue and reducing  risk.  It is
critical for  mortgage  lenders to establish  and evaluate  effective  operating
procedures while assessing and managing risk inherent in the mortgage industry.

PRODUCTS AND SERVICES

ACES(TM)

         ACES(TM) software has been created, developed and sold by EBS to assist
Mortgage  lenders in  assessing  the  accuracy  of the  information  gathered in
connection  with  making a loan.  When  considering  whether  to lend  funds,  a
mortgage lender has potential  borrowers complete a mortgage  application.  From
this  application  and other  accumulated  information,  the  lender  determines
whether the applicant  qualifies  for a loan. As part of this loan process,  the
lender must also assess  whether the property  being  purchased is of sufficient
value to  collateralize  the loan.  If the  information  obtained  regarding the
potential  borrower and the property to be pledged as collateral satisfy certain
lending criteria, the loan can then be made by the mortgage lender.  Frequently,
the  mortgage  lender  then  bundles  a number of loans  together  and sells the
portfolio  of loans to  Fannie  Mae,  Freddie  Mac,  Federal  Housing  Authority
("FHA"), Veterans Administration ("VA"), and other mortgage investors.

         In order to effect the sale of a mortgage portfolio,  a lender, or loan
originator,  must review the information compiled in connection with originating
the loan on a representative sample of loans in the portfolio. ACES(TM) software
simplifies this process  greatly.  The ACES(TM) product enables each customer to
perform  quality  control  reviews  based  upon the risk  management  philosophy
determined by their company. ACES(TM) provides either (i) a questionnaire, which
the customer may modify, or (ii) an exception based analysis.  The questionnaire
enables the analyst reviewing the information gathered during the origination of
the loan to quickly and accurately determine whether any information was omitted
or misstated.  ACES(TM) then creates reverification letters for the application,
employment,   deposits  (source  of  funds),   credit,  and  sometimes  property

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appraisal.  The  exception  based  analysis  enables  the  reviewer  to identify
specific exceptions, or items of concern.

         ACES(TM) also contains a loan selection module that enables the user 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.

         ACES(TM) receives mortgage loan information in an ASCII comma delimited
Format  created by the user 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.

         EBS either sells or leases the ACES(TM) program. When a customer leases
ACES(TM)  software the  maintenance  fee is included.  When selling the ACES(TM)
program, the Company charges an additional annual software maintenance fee.

         In the second quarter of 1998, EBS released its ACES 98 software.  ACES
98, a Year 2000 compliant program,  is a Windows 95 and Windows NT based product
which includes enhanced reporting modules.  These new reporting modules generate
clearer  and more  concise  reports  as well as trend  information  that was not
available in the previous versions of ACES(TM).  As a result,  ACES 98 functions
more efficiently and effectively than earlier versions of ACES(TM).

ACES(TM) QUALITY CONTROL SOLUTIONS

         In lieu  of  purchasing  or  leasing  the  ACES(TM)  software  product,
mortgage  Lenders can  outsource  the  quality  review task to EBS. By using the
ACES(TM) software program,  trained specialists at EBS analyze the original file
containing  information  compiled  in  connection  with a  loan.  EBS  customers
utilizing  ACES(TM)  Quality  Control  Solutions  include  many  of the  largest
mortgage  companies  nationwide.  Pursuant  to the terms of a contract  with its
customers, EBS charges its customers a fixed fee for each reviewed file.

         EBS provides  third party  quality  review  services  for  professional
reviews of  Conventional,  FHA, VA, Jumbo,  and specialty  mortgage  loans.  The
ACES(TM)  Quality  Control  software  also  enables  EBS to perform  reviews for
various  transactions,  including  preliminary  reviews  prior to funding,  post
lending  reviews and reviews of portfolios in connection  with  acquisitions  or
divestitures.

DESC(TM)

         In  the second  quarter of 1998 EBS released DESC (Data  Evaluation and
Selection  Criteria),  its statistical  sampling software.  This new tool, while
providing  mortgage  lenders with the ability to draw sample data based on their
own  criteria,  also allows them the ability to  categorize  their  samples into
predetermined  risk  groups  for  statistical   sampling   purposes.   Known  as
"stratification,"  this  function  gives  lenders the  ability to validate  risk
assumptions  by any  number of factors  as well as to assure  themselves  of the
overall quality of the mortgage loans being sold into the secondary market. This
methodology  supports EBS's clients ability to maximize the information obtained

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from the quality control process while  minimizing the actual number of mortgage
files to be reviewed.

COMPAREX

         This  previously  announced  project  to develop a data  warehouse  and
comparison  project  has  been  expanded  and  restructured.  EBS,  through  its
contractual  agreements,  processes and retains  extensive  statistical  data on
mortgage loans nationwide. The type of information collected and compiled by EBS
is  useful  on an  individual  lender  by  lender  basis by  providing  mortgage
companies with valuable industry  comparisons.  It is of even greater value when
correlated  to loan  performance.  Therefore,  EBS has sought out and  secured a
relationship with a provider of loan performance information and intends to make
available to the market,  a product that provides  comparisons  on the impact of
loan  exceptions  across the  industry.  It is  uncertain at this time when this
product will be delivered to the market.

EBS CONSULTING SERVICES

         Since its  inception  in February  1998,  EBS  Consulting  Services has
provided  advice to a variety of  mortgage  lenders on  operations,  systems and
personnel. Aimed at supporting the efforts of the mortgage quality professional,
the consulting  division  ensures that all clients are assisted in the effective
implementation  of software  products  marketed by EBS.  This program is focused
towards a process  measurement  approach  which has  proven to be  effective  in
providing mortgage-lending management with key process quality information.  EBS
Consulting  Services  also  provides  an  analysis  of overall  quality  control
operations for lenders and has the ability to assist them in the development and
implementation of large-scale quality initiatives.

THE MORTGAGE INSTITUTE

         The EBS Institute  began operation in the third quarter of 1998. Led by
education  professionals  experienced in adult  education and distance  learning
programs,  the institute is focused on implementing a comprehensive  educational
program for mortgage  professionals  in the area of quality  control and process
management.  The cornerstone  course,  "Foundations in Quality" was presented as
the  preceding  session  of the  Mortgage  Banker's  Association  (MBA)  Quality
Assurance  Conference in September  1998,  and has been  presented to individual
mortgage  lenders.  The  institute  also  offers  a course  on Loss  Mitigation,
developed at the request of the MBA, that has been offered and  presented  since
the fourth quarter of 1998.  The institute is currently  developing a curriculum
on fraud awareness which is scheduled for implementation in the third quarter of
1999.  In addition to being  presented  in  regularly  scheduled  sessions,  the
programs are available to lenders at their locations upon request.

CRIS(R)

         CRIS(R) software has been created,  developed and sold by EBS to assist
Credit agencies in compiling  comprehensive  credit reports for their customers.
To date,  over 350 credit  agencies have  purchased the personal  computer based
CRIS(R)  program,  each of which have also entered  into a software  maintenance
agreement with the Company.  The CRIS(R) program enables credit agencies through
its built-in  communication  software to access information from all three major
credit  information  repositories  --  Experian  (formerly,  TRW),  Equifax  and

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TransUnion.  CRIS(R)  then  automatically  consolidates  the credit  information
obtained  from these  sources and  creates a  simplified,  comprehensive  credit
report.  The program can then  generate,  upon  demand,  letters  requesting  an
explanation  of  information  in the  report  that  requires  clarification.  In
addition,  CRIS(R) also provides credit agencies with an accounts receivable and
billing  system to charge their  customers for reports  generated by the CRIS(R)
program.

         CRIS(R),  a Year  2000  compliant  program,  is  installed  by EBS on a
customer's personal computer or sold pre-loaded on new computer hardware.

EBS XCHANGE(R)

         EBS also  creates  credit  reports for its credit  agency and  mortgage
lending  customers.  Typically,  a  customer  will  need a credit  report  on an
individual because a lender is considering making a loan to such individual. The
credit agency will then request electronically through the EBS Xchange(R) that a
report be compiled on such individual.  By using the CRIS(R) program internally,
EBS can generate and  communicate  a full credit report to its customer in a few
minutes.  EBS charges a fee for compiling  each report and charges an additional
fee if its credit agency customer does not have its own account with each of the
credit information repositories.

QUICKCREDIT FOR WINDOWS

         In June of 1998, QCC  introduced  QuickCREDIT  for Windows,  a software
application  which enables credit agency  clients to access via telephone  modem
the EBS Xchange  system for the purpose of requesting  and compiling  individual
credit reports. This application operates on Windows 3.1, Windows 95 and Windows
NT operating systems and is accessible by industry accepted modems.  QuickCREDIT
for Windows is provided  without cost to the client,  however it derives revenue
on a transactional basis when used.

SALES AND MARKETING

         In order to  service  its  customers,  EBS and QCC  presently  employ a
combined  sales  force  of  eleven  (11)  sales  representatives.   These  sales
representatives  work on a salary plus commission  basis and are responsible for
placing their respective  products with its principal  customers,  which include
commercial  banks,  mortgage  brokers,  savings  and loan  associations,  credit
unions,  credit  agencies  and  other  lenders.  The sales  representatives  are
supported by a marketing services staff and seven (7) technical customer service
representatives.

         In  addition,  customers  acquire  CRIS(R) and EBS  Xchange(R)  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.

COMPETITION

         The Company is aware of several software  programs  produced by private
non-mortgage  banking  companies  which  compete  directly with  ACES(TM).  More

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significantly,  mortgage  companies  continually  develop their own  proprietary
software in-house.  ACES(TM) Quality Assurance  Outsourcing has competition from
many local, regional and national privately held companies.

         The  credit  reporting  industry  is highly  competitive.  Many  credit
reporting  agencies have other software  programs which generate  credit reports
from information supplied by the credit information  repositories.  As a result,
both CRIS(R) and EBS Xchange(R) have significant competition.

BACKLOG

         At December 31, 1998, EBS had no contract backlog.  Revenues from sales
are recorded upon software delivery,  hardware delivery,  and training.  EBS has
entered into one to two year  contracts for services that obligate  customers to
specific minimum transactions with EBS.

EMPLOYEES

         At March  31,1999  the  Company,  through its  operating  subsidiaries,
currently  employs  approximately 84 people of which 11 are engaged in marketing
and sales,  16 are  engaged  in  programming  and  customer  service  and 12 are
involved in finance and administration.  None of the employees are union members
and none are covered under any collective bargaining  agreements.  EBS considers
relations with its employees to be good. See "Recent Developments."

PATENTS AND TRADEMARKS

         The EBS Xchange(R) and  QuickCREDIT(R)  trademarks have been registered
in  International  Class 9 in the  United  States  Patent and  Trademark  Office
("PTO") and the Company has several applications for registration pending in the
PTO.  Through the Company's five (5) year long use of the ACES(TM)  trademark in
the United States in connection  with  computer  software,  the Company has also
acquired common law trademark rights in the ACES(TM) trademark.  There can be no
assurance,  however,  that the Company will be able to effectively obtain rights
in the Company's mark throughout all the countries of the world.  The failure of
the Company to protect such right from unlawful and improper  appropriation  may
have a material adverse effect on the Company's  business,  financial  condition
and results of operation.

INSURANCE

         The Company  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 the Company is engaged. The Company believes that the
amount and form of its insurance coverage are adequate at the present time.

RESEARCH AND DEVELOPMENT

         During 1998, the Company expensed approximately  $1,032,272 of external
research  and  development   costs.   Approximately  50%  of  the  internal  EBS
programming resources are engaged in research and development activities.  These

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<PAGE>

internal  resources were accounted in the Company's  general and  administrative
costs.  Research  and  development  expenses  related to external  vendors  were
$1,032,272.  The  development  activities were focused on upgrading the ACES and
QCC products to a Microsoft Windows environment.

         The Company  estimates the future spending for research and development
for the fiscal year 1999 to be approximately  $1,000,000 and will be funded by a
combination of equity and debt financing.

QUICKCREDIT CORP.

         QuickCREDIT  Corp.  ("QCC") was formed by the Company as a wholly owned
subsidiary in February 1998 for the purpose of acquiring local credit  reporting
agencies. Presently, EBS offers its CRIS(R) software and EBS Xchange(R) services
to credit  agencies who in turn service their  customers.  The Company  believes
that QCC can be successful in offering its expertise and experience  directly to
end users.  In April 1998,  QCC  acquired  two  privately  held credit  agencies
located in Fort  Lauderdale,  Florida and  Orlando,  Florida.  In May 1998,  QCC
acquired a third credit agency located in Jacksonville,  Florida.  QCC maintains
each  of  the  acquired  credit  agencies  as  separate   subsidiaries  and  has
consolidated the operations of the Fort Lauderdale credit agency and the Orlando
credit  agency in QCC's  corporate  offices  in Fort  Lauderdale,  Florida.  QCC
continues to operate the Jacksonville  credit agency out of its original offices
in Jacksonville, Florida.

         In March,  1999,  QCC  entered  into an  Agreement  for  Joint  Product
Development,  Sales and Marketing with an Atlanta, Georgia based company for the
development and marketing of two new products.  QCC's partner in this project is
a company  having annual gross  revenues in excess of  $300,000,000  that offers
certain  consumer  products  to bank  credit  card  holders  through  (i) direct
marketing  materials included with account holder billing invoices,  (ii) direct
mail marketing and (iii) a telemarketing  sales force.  QCC's partner  currently
markets products to over 120,000,000 bank credit card holders.  The two products
to be developed and marketed under the agreement are a credit card  registration
product ("Card  Registration  Product") and a credit monitoring product ("Credit
Monitoring  Product").  The Card  Registration  Product will offer to the credit
card holder the  opportunity  to register  each of his or her bank credit cards,
oil company  credit and store credit cards to allow quick and easy  cancellation
by the  cardholder  in the event any or all of the  registered  credit cards are
lost or  stolen.  In the event of loss or theft,  the  cardholder  notifies  QCC
through a toll free telephone call of the loss or theft and QCC (i) arranges for
cancellation  of the cards  identified  by the card holder to be cancelled  (ii)
reorders the cancelled cards and (iii) provides emergency cash and certain other
emergency  services to the card holder. The Credit Monitoring Product will offer
credit  reporting  services and related data  collection  services to individual
consumers  to permit such  persons to obtain  periodic  information  about their
credit  history.  Credit  information  will be  gathered  from each of the three
credit repositories (Equifax,  TransUnion Corporation and Experian) and reported
to the customer each calendar  quarter.  Customers  having questions or concerns
regarding the  information  appearing on their credit report will be directed to
the National Consumer Credit Counseling Service.

                                       9

<PAGE>

TRIMAX SYSTEMS CORP.

         On May 30, 1998 the Company acquired TriMax Systems Corp. and MultiTask
Corp.  for 405,000  shares of the  Company's  common  stock.  At the time of the
acquisition,   the  Company   understood   TriMax  to  have   certain   business
relationships  and to have a  financial  history  that was later  revealed to be
different than that initially  contemplated.  On September 30, 1998, the Company
and the former  principal  shareholders of TriMax mutually agreed to rescind the
acquisition of TriMax. Pursuant to the rescission agreement,  the 270,000 shares
delivered  by the  Company  as  payment  of the  purchase  price  for all of the
outstanding  shares of TriMax were cancelled and the TriMax shares were returned
to the former  TriMax  shareholders.  In  addition,  the  Company  entered  into
consulting  contracts with each of the former TriMax shareholders and the former
Chairman of the Board of the Company  caused the Company to grant  100,000 stock
options  having an  exercise  price of $0.20 per share to each of the two former
shareholders  of  TriMax.  The  Company  has not made  any  payments  under  the
consulting  contracts and has  suspended  the right of exercise  under the stock
option agreements until such time as an investigation  into the granting of such
options and the relationship  between each of the former  shareholders of TriMax
and the former  Chairman  of the Board of the Company  has been  completed.  See
"Recent Developments" and "Legal Proceedings."

         IN ADDITION TO OTHER  INFORMATION IN THIS ANNUAL REPORT ON FORM 10-KSB,
THE FOLLOWING IMPORTANT FACTORS SHOULD BE CAREFULLY CONSIDERED IN EVALUATING THE
COMPANY AND ITS  BUSINESS  BECAUSE  SUCH FACTORS  CURRENTLY  HAVE A  SIGNIFICANT
IMPACT ON THE COMPANY'S BUSINESS, PROSPECTS,  FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

         LIMITED HISTORY OF BUSINESS OPERATIONS; ANTICIPATED LOSSES. The Company
has a limited  operating  history on which to base an evaluation of its business
and  prospects,  having  only  commenced  its  present  operations  through  its
Engineered Business Systems,  Inc.  subsidiary in December,  1996. The Company's
prospects  must be considered in light of the risks,  expenses and  difficulties
frequently  encountered by companies in their early stage of  development.  Such
risks  for the  Company  include,  but are  not  limited  to,  an  evolving  and
unpredictable  business  model and the  management  of growth.  To address these
risks, the Company must, among other things,  maintain and increase its customer
base,  implement and successfully  execute its business and marketing  strategy,
continue  to develop  and  upgrade its  technology,  provide  superior  customer
service, respond to competitive  developments,  and attract, retain and motivate
qualified  personnel.  Although  initial  customer  acceptance  of the Company's
services has been  encouraging,  the Company is unable to predict with certainty
how demand for these  services  may  develop  over time.  The  Company's  future
profitability  depends in large measure on acceptance of the Company's  products
and services.

         The Company has incurred  losses for the twelve  months ended  December
31, 1998 of approximately  $5,100,000.  Inasmuch as the Company will continue to
have a high level of operating expenses and will be required to make significant
up-front expenditures in connection with both the marketing and expansion of its
business  (including,  without  limitation,  salaries of  executive,  technical,
marketing and other personnel), the Company anticipates that it will continue to
incur  losses  until  such time as the  Company is able to  generate  sufficient
revenues to finance its operations.

                                       10

<PAGE>

         SIGNIFICANT  CAPITAL  REQUIREMENTS;  WORKING CAPITAL DEFICIT;  NEED FOR
ADDITIONAL  FINANCINGS.  The Company's  capital  requirements have been and will
continue to be  significant.  At December  31,  1998,  the Company had a working
capital deficit and the Company's working capital deficit is increasing  through
the date of the filing of this  Annual  Reports  on form  10-KSB.  To date,  the
Company's capital requirements have been satisfied primarily by the sale of debt
and equity securities,  and capital  contributions.  The Company is dependent on
and intends to use the proceeds  from these types of  financings to continue the
implementation of its proposed plan of operation. During the quarter ended March
31, 1999, the Company sold an aggregate of 416,183 shares of Common Stock for an
aggregate of $416,183.

         RECENT  DEVELOPMENTS;  LITIGATION.  The Company is a  defendant  in one
lawsuit styled,  THOMAS L. BAUER, ET AL V. TRIANGLE IMAGING GROUP, INC., VITO A.
BELLEZZA, JUDITH BELLEZZA A/K/A JUDITH KLOTZ, PETER BELLEZZA AND FRANZ FIDELI in
the  Circuit  Court of the 17th  Judicial  Circuit  in and for  Broward  County,
Florida filed in December 1998 by in excess of 25 of the Company's  shareholders
some of whom  are  officers  and  employees  of the  Company  (the  "Shareholder
Litigation").  The Shareholder Litigation alleges, among other things,  breaches
of fiduciary duty,  self-dealing,  stock manipulation and insider trading by Mr.
Bellezza,  the  Company's  former  Chief  Executive  Officer and Chairman of the
Board.  The lawsuit  further  alleges certain claims against Judith Bellezza for
her alleged participation in Mr. Bellezza's complained of activities, as well as
claims  against  Franz  Fideli and Peter  Bellezza  arising  from the failure to
discharge their fiduciary duties as directors of the Company when presented with
the allegations against Mr. Bellezza and Judith Bellezza.

         On November  20,  1998,  a Special  Committee of the Board of Directors
retained  the  Special  Counsel  (a  law  firm  specializing  in  corporate  and
securities  laws matters) to assist the Special  Committee in its  investigation
with respect to the allegations  later raised in the Shareholder  Litigation for
the purpose of determining the validity of such allegations. The Special Counsel
delivered its report (the "Special  Counsel  Report") dated February 12, 1999 to
the Board of  Directors.  The  Company's  litigation  counsel has  reviewed  the
Special Counsel Report and will advise the Company on the Company's  defenses to
the claims raised against the Company in the Shareholder  Litigation and whether
the  Company  should  pursue  separate  litigation  against Mr.  Bellezza,  Judy
Bellezza, Peter Bellezza and Franz Fideli. At this time, it is uncertain whether
the Company will pursue such separate litigation and what course the Shareholder
Litigation may take or the outcome of such litigation.

         In  addition to the  foregoing,  in January,  1999,  Waterside  Capital
Corporation  ("Waterside")  filed a lawsuit  against the Company (the "Waterside
Litigation")  in the United States  District  Court for the Eastern  District of
Virginia,  Civil  Action No. 2:98 cv 1468,  based upon  alleged  defaults by the
Company under a promissory note in the original  principal amount of $1,500,000,
dated October 15, 1998, and alleged  breaches of contract under certain  related
investment  agreements.  The Company and  Waterside  reached a settlement of the
litigation  pursuant  to which  the  Company  repriced  certain  stock  purchase
warrants  granted  to  Waterside  at the  time  of the  closing  of  Waterside's
investment in the Company.  Pursuant to the  settlement,  the purchase price for
the shares  underlying  the warrants was reduced from a range of $2.15 per share
to $3.00 per share down to $.05 per share.  In exchange for the repricing of the

                                       11

<PAGE>

warrants,  Waterside  dismissed  the Waterside  Litigation  and delivered to the
Company a contingent  general  release.  The release provides that Waterside may
not  refile  the  lawsuit  with  the same  claims  set  forth  in the  Waterside
Litigation  unless certain members of management and/or members of the Company's
Board fail to remain in such  positions  through  the date of the second  annual
meeting of shareholders held after the date of the settlement.

         It is anticipated  that  litigation may also result from the rescission
of the TriMax  acquisition in September 1998. The former  shareholders of TriMax
have  demanded the right to exercise the stock  options  purportedly  granted to
each of them by the  Company's  former  Chairman  which  right of  exercise  the
Company has suspended and is currently reviewing. See "TriMax Systems Corp."

         In the event  that the  foregoing  legal  disputes  or any other  legal
matters  are  determined  in favor of an  opposing  party,  the  Company  may be
materially  and  adversely  effected.  In addition,  the Company may continue to
incur  significant  legal  expenses from the foregoing  legal  disputes or other
legal matters which may materially and adversely effect the Company.

         ECONOMIC CONDITIONS. The mortgage industry is significantly effected by
general economic  conditions,  particularly  long-term interest rates. When long
term interest  rates are relatively  low,  homeowners  refinance  their existing
mortgages and demand for new mortgages increases significantly.  During the past
several years  interest  rates have been  relatively  low resulting in increased
demand for the  products  and  services  provided  by the  Company.  If economic
conditions  decline  and/or long term interest  rates  increase,  demand for the
Company's products and services may be severely effected. As a consequence,  the
Company's revenues may decline materially.

         IMPACT OF WARRANT  AND OPTION  EXERCISE;  PUT  OPTIONS.  As of the date
hereof,  the  Company  believes  there  are  warrants  and  options  outstanding
exercisable  for not less than  2,800,000  shares of Common Stock.  The exercise
price of these  warrants  and options  range from $.05 per share to in excess of
$3.00 per share. The Board of Directors is presently  investigating the validity
of the issuance of certain of these  securities,  and  therefore,  the number of
options  issued and  outstanding  and the shares  subject to  issuance  upon the
exercise  thereof is subject to change.  No  assurance  can be given that any of
such securities will be cancelled. In the event of the exercise of a substantial
number of  Warrants  and/or  Options,  the  resulting  increase in the amount of
Common  Stock of the Company  could  substantially  dilute  investors  ownership
interests  in the  Company  and may  negatively  effect the market  price or the
shares of Common Stock.

         QCC acquired  three  credit  services  bureaus in 1998.  As part of the
purchase  price for the credit  bureaus,  the Company  issued a total of 495,000
shares  of  the  Company's  common  stock  (the  "Issued  Stock").   The  former
shareholders  of each of the acquired  entities  that  received the Issued Stock
were granted a put option (the "Put Option") giving such stockholders the right,
upon the  occurrence  of  certain  circumstances,  to require  that the  Company
repurchase the stock at a repurchase  price of $3.00 per share (the  "Repurchase
Price").  Since the  market  price per share of the  Company's  common  stock at
December 31, 1998 was, and  continues to be,  below the  Repurchase  Price,  the
Company has recorded a liability in the amount of $1,485,000.  In the event that
all or part of the Put  Options  are  exercised,  the Company may be required to

                                       12

<PAGE>

repurchase  all or part of the Issued  Stock which  could  result in the Company
being obligated to make payments in excess of available funds.

         RELIANCE ON KEY PERSON.  The Company is dependent upon Harold  Fischer,
the Company's  President.  Should Mr.  Fischer  cease to be affiliated  with the
Company,  there could be a material adverse effect on the Company's business and
prospects.  There can be no assurance that a suitable replacement could be hired
without the Company incurring substantial additional costs.

         LIMITED TRADING MARKET; RESTRICTIONS ON TRANSFERABILITY.  The Company's
shares of Common  Stock  trade on the OTC  Bulletin  Board  with  limited  daily
trading  volume.  Investors  should be aware that the nature of the OTC Bulletin
Board, the lack of market analysts  following the Company's Common Stock and the
resulting  limited  trading  volume  may make it  difficult  or  impossible  for
investors to sell their holdings. In addition, efforts to sell blocks of Company
Common Stock that are large in relation to the average daily trading  volume may
cause significant  downward pressure on the market price of the Company's Common
Stock.

         PRODUCT CONCENTRATION. Although the Company sells a variety of products
and services,  the bulk of the Company's  revenues are  concentrated in the ACES
product line. The Company  Revenues from the ACES products  represented over 45%
of the Company's  total revenues in 1998. The Company expects that revenues from
these  products  will  continue  to  account  for a  substantial  portion of the
Company's  revenues.  The life cycles of the Company's products are difficult to
estimate due in large  measure to the recent  emergence of some of the Company's
products  to  market,  the  future  effect of  product  enhancements  and future
competition.  Declines  in demand  for these  products,  whether  as a result of
competition, technological change or otherwise, or price reductions would have a
material adverse effect on the Company's operating results.

         COMPETITION.  The  market  for  the  Company's  products  is  intensely
competitive.  The Company  expects  competition  to increase  and the  Company's
market  share  to  decline  as other  companies  introduce  additional  and more
competitive Microsoft Windows(R)-based products in this emerging market segment.
Many of the Company's  present or  anticipated  competitors  have  substantially
greater  financial,  technical,  marketing and sales resources than the Company.
There can be no assurance that the Company will be able to compete  successfully
in the future.

         DEPENDENCE   ON  OPERATING   ENVIRONMENTS.   The   Company's   software
development  tools are designed for use with computers  running in the Microsoft
Windows(R)  operating  environment.  Future sales of the Company's  products are
dependent upon continued use of this operating environment. In addition, changes
to these  software  programs  require  the  Company to  continually  upgrade its
products.  Any inability to produce  upgrades or any material  delay in doing so
would  adversely  affect  the  Company's   operating  results.   The  successful
introduction  of new operating  systems or  improvements  of existing  operating
systems that compete with these software  programs also could  adversely  affect
sales of the  Company's  products  and have a  material  adverse  effect  on the
Company's operating results.

                                       13

<PAGE>

         RAPID  TECHNOLOGICAL  CHANGE.  The market for the Company's products is
characterized by rapid  technological  advances,  evolving  industry  standards,
changes in end-user  requirements  and  frequent new product  introductions  and
enhancements.  While the  Company to date has been  committed  to the  Microsoft
Windows(R), and Windows(R) NT, platforms, the introduction of products embodying
new  technologies  and the emergence of new industry  standards could render the
Company's  existing products and products  currently under development  obsolete
and  unmarketable.  The Company's future success will depend upon its ability to
enhance its current products and to develop and introduce new products that keep
pace with technological developments,  respond to evolving end-user requirements
and achieve  market  acceptance.  Any failure by the  Company to  anticipate  or
respond adequately to technological  developments or end-user  requirements,  or
any significant delays in product development or introduction, could result in a
loss of  competitiveness  or  revenues.  In the past,  the Company  occasionally
experienced delays in the introduction of new products and product enhancements.
There can be no assurance  that the Company will be successful in developing and
marketing  new  products or product  enhancements  on a timely basis or that the
Company will not experience significant delays in the future, which could have a
material  adverse effect on the Company's  results of  operations.  In addition,
there can be no assurance that new products or product enhancements developed by
the Company will achieve market acceptance.

         MANAGEMENT OF GROWTH. The Company has recently experienced rapid growth
in the number of employees, the scope of its operating and financial systems and
the geographic area of its  operations.  This growth has resulted in an increase
in the level of responsibility  for both existing and new management  personnel.
To manage its growth  effectively,  the Company  will be required to continue to
implement and improve its operating and financial  systems and to expand,  train
and manage its  employee  base.  There can be no assurance  that the  management
skills and systems  currently in place will be adequate if the Company continues
to grow.  The  Company  may make  additional  acquisitions  in the  future.  The
Company's  management  has only  limited  experience  with  acquisitions,  which
involve  numerous  risks,  including  difficulties  in the  assimilation  of the
operations and products of the acquired companies, the diversion of management's
attention from other  business  concerns and the potential loss of key employees
of the acquired companies.

         DEPENDENCE ON PROPRIETARY  RIGHTS.  The Company regards its software as
proprietary and attempts to protect it with copyrights, trademarks, trade secret
laws and restrictions on disclosure,  copying and transferring  title.  However,
the Company has no patents,  and  existing  copyright  laws afford only  limited
practical protection for the Company's software.  In addition,  the laws of some
foreign  countries do not protect the Company's  proprietary  rights to the same
extent as do the laws of the United  States.  The Company  licenses its products
primarily  under  "shrink  wrap"  license  agreements  that  are not  signed  by
licensees and therefore may be  unenforceable  under the laws of certain foreign
jurisdictions.  In addition, in some instances the Company licenses its products
under  agreements  that give licensees  limited access to the source code of the
Company's  products.  Accordingly,  despite precautions taken by the Company, it
may be possible for  unauthorized  third parties to copy certain portions of the
Company's  products or to obtain and use information that the Company regards as
proprietary.  As the number of software  products in the industry  increases and

                                       14

<PAGE>

the functionality of these products further overlaps,  the Company believes that
such software will become  increasingly the subject of claims that such software
infringes  the rights of others.  Although the Company does not believe that its
products infringe on the rights of third parties, there can be no assurance that
third  parties will not assert  infringement  claims  against the Company in the
future  or that any such  assertion  will not  result in  costly  litigation  or
require the Company to obtain a license to intellectual  property rights of such
parties.  In addition,  there can be no  assurance  that such  licenses  will be
available on reasonable terms, or at all.

         NO DIVIDENDS  AND NONE  ANTICIPATED.  To date,  the Company has paid no
dividends.  For the foreseeable  future,  earnings  generated from the Company's
proposed operations will be retained for use in the Company's business.

         FORWARD-LOOKING  INFORMATION  MAY  PROVE  INACCURATE.  This  Memorandum
contains   forward-looking   statements  and  information   that  are  based  on
management's  beliefs as well as assumptions made by, and information  currently
available to,  management.  When used in this Memorandum  (including  Exhibits),
words such as "anticipate,"  "believe,"  "estimate," "except," and, depending on
the  context,   "will"  and  similar  expressions,   are  intended  to  identify
forward-looking  statements. Such statements reflect the Company's current views
with respect to future  events and are subject to certain  risks,  uncertainties
and assumptions, including the specific risk factors described above. Should one
or more of these  risks  or  uncertainties  materialize,  or  should  underlying
assumptions  prove  incorrect,  actual  results may vary  materially  from those
anticipated,  believed,  estimated or  expected.  The Company does not intend to
update these forward-looking statements and information.

         YEAR 2000. The Company recognizes that a challenging  problem exists in
that many computer  systems  worldwide do not have the capability of recognizing
the year 2000 or the years thereafter. No easy technological "quick fix" has yet
been  developed for this problem.  The Company has spent a  considerable  sum of
money to assure  that all its  software  programs  are year 2000  compliant  and
believes that they will be year 2000 compliant  during 1999,  most likely during
the first half of the year. This "Year 2000 Computer  Problem"  creates risk for
the Company from unforeseen  problems in its own software and from third parties
with whom the Company deals.  Such failures of the Company and/or third parties'
computer  systems  could have a material  adverse  effect on the Company and its
ability to conduct its business in the future.

ITEM 2.  PROPERTIES

         The Company leases a facility in Fort Lauderdale, Florida consisting of
approximately  20,000 square feet of office and research and development  space.
The  Company  has a  lease  through  January,  2003,  at a base  monthly  rental
increasing from approximately  $16,800 per month to $20,000 per month during the
first  year of the  lease.  The  lease  provides  for a base  monthly  rental of
approximately  $20,000 during years two through five of the lease.  Prior to the
end of the fifth year of the lease, the Company has the right to renew the lease
for an additional five year term at a base monthly rent of approximately $23,500
during each of the five years of the renewal term.

                                       15

<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

         The Company is a defendant in one lawsuit  styled,  THOMAS L. BAUER, ET
AL V. TRIANGLE  IMAGING GROUP,  INC.,  VITO A. BELLEZZA,  JUDITH  BELLEZZA A/K/A
JUDITH KLOTZ,  PETER  BELLEZZA AND FRANZ FIDELI in the Circuit Court of the 17th
Judicial Circuit in and for Broward County, Florida filed in December 1998 by in
excess  of 25 of the  Company's  shareholders  some of  whom  are  officers  and
employees  of  the  Company  (the  "Shareholder  Litigation").  The  Shareholder
Litigation   alleges,   among  other   things,   breaches  of  fiduciary   duty,
self-dealing,  stock  manipulation  and  insider  trading by Mr.  Bellezza,  the
Company's former Chief Executive  Officer and Chairman of the Board. The lawsuit
further   alleges  certain  claims  against  Judith  Bellezza  for  her  alleged
participation  in Mr.  Bellezza's  complained of  activities,  as well as claims
against  Franz Fideli and Peter  Bellezza  arising from the failure to discharge
their  fiduciary  duties as  directors of the Company  when  presented  with the
allegations against Mr. Bellezza and Judith Bellezza.

         On November  20,  1998,  a Special  Committee of the Board of Directors
retained  the  Special  Counsel  (a  law  firm  specializing  in  corporate  and
securities  laws matters) to assist the Special  Committee in its  investigation
with respect to the allegations  later raised in the Shareholder  Litigation for
the purpose of determining the validity of such allegations. The Special Counsel
delivered its report (the "Special  Counsel  Report") dated February 12, 1999 to
the Board of  Directors.  The  Company's  litigation  counsel has  reviewed  the
Special Counsel Report and will advise the Company on the Company's  defenses to
the claims raised against the Company in the Shareholder  Litigation and whether
the  Company  should  pursue  separate  litigation  against Mr.  Bellezza,  Judy
Bellezza, Peter Bellezza and Franz Fideli. At this time, it is uncertain whether
the Company will pursue such separate litigation and what course the Shareholder
Litigation may take or the outcome of such litigation.

         In  addition to the  foregoing,  in January,  1999,  Waterside  Capital
Corporation  ("Waterside")  filed a lawsuit  against the Company (the "Waterside
Litigation")  in the United States  District  Court for the Eastern  District of
Virginia,  Civil  Action No. 2:98 cv 1468,  based upon  alleged  defaults by the
Company under a promissory note in the original  principal amount of $1,500,000,
dated October 15, 1998, and alleged  breaches of contract under certain  related
investment  agreements.  The Company and  Waterside  reached a settlement of the
litigation  pursuant  to which  the  Company  repriced  certain  stock  purchase
warrants  granted  to  Waterside  at the  time  of the  closing  of  Waterside's
investment in the Company.  Pursuant to the  settlement,  the purchase price for
the shares  underlying  the warrants was reduced from a range of $2.15 per share
to $3.00 per share down to $.05 per share.  In exchange for the repricing of the
warrants,  Waterside  dismissed  the Waterside  Litigation  and delivered to the
Company a contingent  general  release.  The release provides that Waterside may
not  refile  the  lawsuit  with  the same  claims  set  forth  in the  Waterside
Litigation  unless certain members of management and/or members of the Company's
Board fail to remain in such  positions  through  the date of the second  annual
meeting of shareholders held after the date of the settlement.

         It is anticipated  that  litigation may also result from the rescission
of the TriMax  acquisition in September 1998. The former  shareholders of TriMax
have  demanded the right to exercise the stock  options  purportedly  granted to
each of them by the  Company's  former  Chairman  which  right of  exercise  the
Company has suspended and is currently reviewing. See "TriMax Systems Corp."

                                       16

<PAGE>

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

         As of December 23, 1998, a written consent of shareholders in lieu of a
special  meeting  of  shareholders  (the  "Written  Consent")  was  executed  by
shareholders  holding an aggregate of 6,541,999  shares of the Company's  common
stock, or 50.4% of the shares then outstanding.  The sole purpose of the Written
Consent was to elect Messrs.  Harold S. Fischer, J. Alan Lindauer and Charles D.
Winslow as directors  of the Company.  As a result,  Messrs.  Vito A.  Bellezza,
Franz  Fideli and Peter  Bellezza are no longer  directors  of the Company.  See
"Recent Developments" and "Legal Proceedings."


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

         The  Company's  shares of Common Stock trade on the OTC Bulletin  Board
(the  "Bulletin  Board")  under the trading  symbol  "TRIG." The Common Stock is
regularly quoted and traded on the Bulletin Board.

         As of April 20,  1999,  there  were  14,143,791  shares of Common  Sock
issued and outstanding with approximately 975 holders of record of the Company's
Common Stock with approximately 1,118 beneficial owners.

         The  following  table  indicates  the high and low bid  prices  for the
Company's  Common Stock for the two year period  ending  December 31, 1998 based
upon information  supplied by the Bulletin Board.  Prices  represent  quotations
between   dealers  without   adjustments   for  retail  markups,   markdowns  or
commissions, and may not represent actual transactions.

                                               HIGH ($)       LOW ($)
                                               --------       -------

Calendar 1998
-------------

January 1 through March 31                       2.81           1.50
April 1 through June 30                          5.75           2.25
July 1 through September 30                      4.44           1.94
October 1 through December 31                    2.00            .78

Calendar 1997
-------------

January 1 through March 31                        .87            .35
April 1 through June 30                          1.00            .53
July 1 through September 30                       .93            .56
October 1 through December 31                    1.62            .80

                                       17

<PAGE>

         As of April 20, 1999,  the closing bid price for the  Company's  Common
Stock was $.875 per share.

         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

STATEMENTS IN THIS "MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS"  AND ELSEWHERE IN THIS DOCUMENT AS WELL AS STATEMENTS
MADE IN PRESS RELEASES AND ORAL STATEMENTS THAT MAY BE MADE BY THE COMPANY OR BY
OFFICERS,  DIRECTORS OR EMPLOYEES OF THE COMPANY ACTING ON THE COMPANY'S  BEHALF
THAT ARE NOT  STATEMENTS  OF  HISTORICAL  OR CURRENT  FACT  CONSTITUTE  "FORWARD
LOOKING  STATEMENTS"  WITHIN THE  MEANING OF THE PRIVATE  SECURITIES  LITIGATION
REFORM ACT OF 1995. SUCH  FORWARD-LOOKING  STATEMENTS  INVOLVE KNOWN AND UNKNOWN
RISKS,  UNCERTAINTIES  AND OTHER  UNKNOWN  FACTORS  THAT COULD  CAUSE THE ACTUAL
RESULTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM THE HISTORICAL RESULTS OR
FROM ANY FUTURE RESULTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.
IN  ADDITION  TO   STATEMENTS   WHICH   EXPLICITLY   DESCRIBE   SUCH  RISKS  AND
UNCERTAINTIES,  READERS ARE URGED TO CONSIDER  STATEMENTS LABELED WITH THE TERMS
"BELIEVES",  "BELIEF",  "EXPECTS",  "INTENDS",  "ANTICIPATES"  OR  "PLANS" TO BE
UNCERTAIN FORWARD-LOOKING  STATEMENTS.  THE FORWARD LOOKING STATEMENTS CONTAINED
HEREIN ARE ALSO  SUBJECT  GENERALLY  TO OTHER RISKS AND  UNCERTAINTIES  THAT ARE
DESCRIBED FROM TIME TO TIME IN THE COMPANY'S REPORTS AND REGISTRATION STATEMENTS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

This section presents a review of the Company's  financial condition and results
of operations and should be read in conjunction with the consolidated  financial
statements of the Company and the notes included elsewhere herein.

The Company's total revenues for the fiscal year 1998 were  $7,608,904  which is
an increase of 38% over the Company's  fiscal year 1997 revenues of  $5,508,267.
The increase was primarily a result of credit service bureau  acquisitions  made
by QCC which was formed in May 1998 which accounted for revenue of $1,550,025.

For the year ended December 31, 1998,  revenue for EBS was $6,058,879.  This was
an increase of $550,612 or 10% above 1997 revenue of  $5,508,267.  EBS accounted
for 80% of the Company's  1998 revenue  compared to 100% of the  Company's  1997
revenue.  The ACES product line accounted for 58%, CRIS  transactional  services
38% and DESC and Exchange was 4% of EBS revenue  during the year ended  December
31, 1998,  respectively.  ACES continued its strong growth,  particularly in the
outsourcing  arena.  Outsourcing  revenue was up 36% or $588,000  over the prior
year with 12 of EBS's top 15 clients being new customers doing business with EBS
during 1998.  CRIS revenue was down by $423,000 or 20% compared to the preceding

                                       18

<PAGE>

year.  This  decline has been a function  of the  continued  contraction  of the
Company's  wholesale  credit client base brought  about by multiple  mergers and
acquisitions in the mortgage banking industry.

Reoccurring transactional revenue, including outsourcing (38%), wholesale credit
reporting (28%) and annual software  maintenance  contracts (10%) made up 76% of
EBS revenue  during the year ended December 31, 1998.  Sales of software  (12%),
the emerging  consulting  practice  (4%) and other (8%)  complete the  remaining
categories of revenue for EBS.

Revenue for the Company's  newly formed QCC  subsidiary  was  $1,550,025 for the
period from May 1998 through  December 1998. This revenue  represents 20% of the
Company's  total  revenue  for the  1998  fiscal  year.  The  Company's  product
portfolio  has  become  more  diverse  with  the   acquisition   of  QCC  firmly
establishing  the Company in the retail side of the credit  reporting  business.
QCC revenue is made up  entirely of  transactional  events  based on  processing
credit reports to mortgage companies throughout the U.S.

The cost of sales for the Company  was  $2,272,657  in fiscal  1998  compared to
$1,577,249  in fiscal  1997 which is an  increase  of  $695,408  or 31% over the
Company's  fiscal 1997 cost of sales.  Gross profit,  as a percentage of revenue
was 70% in fiscal 1998 compared with 71% in fiscal 1997.

The increase in gross profit was  attributed to the increase in sales  resulting
from the QCC acquisition as well as increased sales and lower cost of sales from
the EBS product lines.  The slight decrease in the gross margin  percentage is a
result  of a lower  gross  margin  business  generated  by QCC  offset by higher
margins from the EBS product lines.

Selling,  general and  administrative  expenses  were  $6,331,520 in fiscal 1998
compared to $2,753,406 in fiscal 1997, an increase of  $3,578,174.  The increase
was partially a result of the increase in sales,  however,  most of the increase
was due to the  investment in the  infrastructure  that  management  believes is
necessary  for  the  Company's  growth.  Unfortunately,  due  to  delays  in the
development  of the ACES for  Windows  product  and the DESC  product  and other
distractions  in the second half of the year,  the Company's  financial  results
have not  benefited  from the  investment  that it has made in its sales  force,
consulting  practice,  and management  team. Other  extraordinary  expenses were
incurred during 1998 and included an in depth accounting review of the Company's
accounts  receivable  which  resulted  in a write  off of  $532,390  in bad debt
expense  and  costs  associated  with  moving  the  Company's   headquarters  of
approximately  $60,000.  As a result in the change of  management  (see  "Recent
Developments"), the Company incurred legal expenses of approximately $194,000.

The Company  expensed  $1,032,272 in  development  costs to external  vendors to
further enhance its products. Most of the cost was incurred in the conversion of
the ACES product to a Microsoft Windows environment. Development funds were also
invested in the DESC product,  which was in production during the second half of
the year.

The 1998  results  include a write off to  goodwill  for the  rescission  of the
acquisition of Trimax  Systems,  Inc.  ($44,178) and MultiTask  Services,  Corp.
($203,084).  The Company has also taken an expense of $850,968  associated  with

                                       19

<PAGE>

the  re-evaluation  of the amount of goodwill  that was  established  for QCC in
connection  with the credit bureau  acquisitions in April and May 1998. The 1998
results  include a write off of $467,090 in non-cash  imputed  compensation  for
certain  consultants and officers that are no longer  providing  services to the
Company.

Results  from  continuing  operations  were  also  affected  by a write off of a
deferred tax asset in the amount of $226,000. A provision for a reserve to cover
anticipated  litigation and restructuring expenses was established in the amount
of $594,119.

Interest  expense was $130,616 in 1998  compared to $110,182 in 1997  reflecting
interest  paid on two  debt  instruments.  The  Company  issued  one note in the
original  principal  amount of $1,600,000 and bearing an annual interest rate of
between  8% and 9% in  connection  with  the  purchase  of  EBS.  The  remaining
principle balance of such note as of December 31,1998 is $700,000 and it becomes
due and payable in February 2000 (See "Historical Information"). The second note
in the original  principal amount of $1,500,000 was issued in October 1998. This
note bears  interest at the rate of 14% per annum and is scheduled to be paid in
full by October  2003. A portion of the proceeds from this note  ($375,000)  was
used  to  reduce  the  outstanding  principal  balance  of the  note  issued  in
connection with the EBS acquisition in accordance with the terms of the purchase
documents  relating  thereto.  The  remaining  proceeds  were used for  software
development and working capital.

QCC acquired  three  credit  services  bureaus in 1998.  As part of the purchase
price for the credit  bureaus,  the Company  issued a total of 495,000 shares of
the Company's common stock (the "Issued Stock"). The former shareholders of each
of the  acquired  entities  that  received  the Issued  Stock were granted a put
option  (the  "Put  Option")  giving  such  stockholders  the  right,  upon  the
occurrence of certain circumstances,  to require that the Company repurchase the
stock at a repurchase price of $3.00 per share (the "Repurchase  Price").  Since
the market  price per share of the  Company's  common stock at December 31, 1998
was, and continues to be, below the Repurchase Price, the Company has recorded a
liability in the amount of $1,485,000.

The Company reported a loss from continuing operations of $4,658,593 in the 1998
fiscal year  compared to a profit of  $1,045,488  in the 1997  fiscal  year.  In
addition, the discontinued operations of Trimax and MultiTask resulted in a loss
of $473,771 for a combined net loss to the Company of $5,132,364.

LIQUIDITY AND CAPITAL RESOURCES

The Company has funded its working capital and capital expenditures requirements
with cash provided from operations, the private sale of the Company's stock, and
debt  financing.  In 1999  the  primary  source  of cash  receipts  will be from
payments for software and services.  The Company's management believes that cash
flows  from  continuing  operations  will  be  sufficient  to  fund  operational
expenditures in the immediate  future and that planned  expansion will be funded
with cash from  operations  and the proceeds  from the issuance of equity and/or
debt financing.

                                       20

<PAGE>

Management  estimates the future  spending for capital  expenditures  during the
1999 fiscal year will be  approximately  $300,000 and believes  that the current
and  future  cash  flows  from  sales  and debt  and  equity  financing  will be
sufficient to fund the planned capital expenditures as needed.

At December  31,  1998,  the Company had a working  capital  deficit of $742,288
compared to a working capital surplus of $325,874 at December 31, 1997.


ITEM 7.  FINANCIAL STATEMENTS

         See the Index to Financial  Statements following Item 13 of this Annual
Report  for a  listing  of the  financial  statements  included  as part of this
report.


ITEM 8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

         None.


ITEM 9.  DIRECTORS,   EXECUTIVE   OFFICERS,   PROMOTERS  AND  CONTROL   PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

         The  following  table sets forth  certain  information  concerning  the
Company's directors and executive officers during the 1998 fiscal year:

--------------------------------------------------------------------------------

NAME                    AGE      POSITION(S) WITH THE COMPANY
----                    ---      ----------------------------

Vito A. Bellezza(1)      62      Former   Chairman   of  the   Board  and  Chief
                                 Executive  Officer of the  Company  and EBS and
                                 Director of QuickCREDIT Corp.
Harold S. Fischer        61      President  of the Company and EBS and  Director
                                 of the Company, EBS and QuickCREDIT Corp.
Greg J. Seminack         47      Vice President-- Finance of the Company
Rebecca B. Walzak        50      Vice   President   and   General   Manager   of
                                 Consulting Services of EBS
Patrick J. Haney         57      Executive Vice President of QuickCREDIT Corp.
Charles D. Winslow(2)    63      Chairman of the Board of the Company
J. Alan Lindauer         60      Director of the Company
William R. Daniels(3)    40      Former Vice President--  Mortgage  Services and
                                 Former Director of EBS
Franz A. Fideli(4)       76      Former Director of the Company and EBS
Peter J. Bellezza(5)     64      Former Director of the Company and EBS
Van Saliba(6)            41      Former President of QuickCREDIT Corp.
J.D. Talton(7)           31      Former Vice President-- Finance of EBS
Albert J. Briggs(8)      65      Former Vice President-- Product Development of
                                 EBS
Timothy F. Thompson(9)   53      Former Vice President-- Product Development of
                                 EBS

                                       21

<PAGE>


1.       Mr.  Bellezza  was not  re-elected  as a director of the Company by the
         shareholders  of the Company as of December  23, 1998.  Mr.  Bellezza's
         employment  with the Company and EBS was  terminated on March 17, 1999.
         See "Recent Developments."
2.       Mr. Winslow was appointed Chairman of the Company on December 23, 1998.
3.       Mr.  Daniels'  employment  with the Company  terminated on February 28,
         1999.
4.       Mr.  Fideli  was not  re-elected  as a director  of the  Company by the
         shareholders  of the  Company as of  December  23,  1998.  See  "Recent
         Developments."
5.       Mr.  Bellezza  was not  re-elected  as a director of the Company by the
         shareholders  of the  Company as of  December  23,  1998.  See  "Recent
         Developments."
6.       Mr. Saliba's employment with QuickCREDIT Corp. terminated on August 25,
         1998.
7.       Mr.  Talton's  employment  with the Company  terminated on September 1,
         1998.
8.       Mr.  Brigg's  employment  with the Company  terminated  on September 2,
         1998.
9.       Mr.  Thompson's  employment with the Company  terminated on November 6,
         1998.

         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.

         Directors  are not  paid  any  fees  for  membership  on the  Board  of
Directors,  but are reimbursed for out-of-pocket expenses incurred in connection
with attending meetings.  Presently,  there are no family relationships  between
any of the officers or  directors,  except that Harold S. Fischer and the spouse
of Charles D. Winslow are second cousins.

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

VITO A.  BELLEZZA  served as  Chairman of the Company  from  January  1994 until
December 23, 1998 and as an officer of the Company,  EBS and  QuickCREDIT  Corp.
until March 17, 1999. Mr. Bellezza has previously served as President of Omnicap
Corp.,  a merchant  banking firm privately  owned by Mr.  Bellezza and his wife,
from June of 1993 until its  administrative  dissolution in 1998.  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  1994  and  for  Redstone  Securities  as a  sales
representative   from  1994  to  present.   Mr.   Bellezza  served  as  a  sales
representative  of New York Life Insurance Co from 1967 until 1996. Mr. Bellezza
is the brother of Peter Bellezza. See "Recent Developments."

HAROLD S.  FISCHER  has served as  President  of the  Company  since April 1997,
President of EBS since January 1997, President of QCC since February 1998 and as
a director of the Company since April 1997. From June 1995 to December 1996, Mr.
Fischer  was the  President  of  Turnkey  Solutions,  Inc.,  a  marketing  media
replication and logistics firm. Previously, Mr. Fischer served as Vice President
with Wang  Laboratories,  Inc. from December 1990 to May 1995 and as a President
of the Commercial  Systems Division of Unisys Corporation from June 1988 through

                                       22

<PAGE>

December 1990. Mr. Fischer has held various executive  responsibilities with the
Unisys Corporation in his 30 year tenure there. See "Recent Developments."

GREGORY J.  SEMINACK has been the  Company's  Vice  President  of Finance  since
August,  1998.  From 1987 to July 1998,  Mr.  Seminack was employed  with Unysis
Corporation  holding various financial and business management  positions,  most
recently as Director of Finance  having  Profit and Loss  Statement  and Balance
Sheet  responsibility  for a $250  million  division  that  sells  and  delivers
computer services and system integration projects. See "Recent Developments."

REBECCA  B.  WALZAK  has been the Vice  President  and  General  Manager  of EBS
Consulting  Services since  February  1998.  From May 1994 to February 1998, Ms.
Walzak was with Chase  Manhattan  Mortgage  Corp.  in the position of First Vice
President - Quality Assurance.  Previously,  Ms. Walzak was with Prudential Home
Mortgage's  Quality  Control  program  from  1985  to May  1994  as  Regulatory,
Compliance  and Quality  Control  Officer.  Ms.  Walzak  currently  serves as an
executive board member of the Mortgage  Bankers  Association  Quality  Assurance
Committee.

PATRICK J. HANEY has served as Executive  Vice  President of  QuickCREDIT  Corp.
since  June,  1998.  From  1996-1998,  Mr.  Haney  was  employed  with  Cellular
Technology Services as Vice President of International Sales. From 1983 to 1996,
Mr.  Haney worked with Lotus  Systems,  Inc.  where he held  various  managerial
positions  including  the position of Director of the  Southern  Region which he
occupied at the time of his  departure.  Mr. Haney has in excess of thirty years
of  experience  in   software/hardware   sales  and   Management.   See  "Recent
Developments."

CHARLES D. WINSLOW has served as a member of the Board of Directors since April,
1998 and as its Chairman since December,  1998. Prior to his retirement in 1996,
Mr. Winslow spent  thirty-four  years with Andersen  Consulting,  twenty-five of
them as a partner. He managed the Columbus, Ohio consulting practice for several
years, and performed the same duties in their Tokyo office for the five years of
its major expansion. Among the major executive positions he held in the firm was
Managing Partner of the Worldwide Industry Program, and most recently, Worldwide
Managing Partner of Change Management.

J. ALAN LINDAUER has served as a director of the Company since October 1998. Mr.
Lindauer  has  served  as a  director  since  July 1993 and as  Chairman  of the
Executive Committee since December of 1993 of Waterside Capital  Corporation,  a
Virginia-based  Small Business Investment Company. Mr. Lindauer has occupied the
position  of  President  and  Chief  Executive   Officer  of  Waterside  Capital
Corporation  since March 1994.  Since 1986,  Mr.  Lindauer has been President of
JTL, Inc., a business  consulting  firm. Mr. Lindauer is a Certified  Management
Consultant.  Mr.  Lindauer  is  a  director  of  the  following  publicly-traded
companies:  (i) Avery Communications,  Inc., a long distance  telecommunications
billing  services  company;  (ii) Branch Bank & Trust of Virginia,  a commercial
bank; and (iii) Netplex Group, Inc., a computer systems integration company. See
"Recent Developments."

WILLIAM R. DANIELS served as the Vice President and as Director of EBS from July
1996 to February  1999.  Prior to EBS, Mr. Daniels  managed the Quality  Control
function for J.I. Kislak Mortgage  Corporation.  He chaired the Mortgage Bankers

                                       23

<PAGE>

Association of America's  Quality Assurance  Committee.  Mr. Daniels has chaired
the California  Mortgage Bankers  Association's  Mortgage Quality and Compliance
Committee.

FRANZ A.  FIDELI  served as a director  of the  Company  from  February  1994 to
December,  1998. Mr. Fideli, a Professional Engineer, has served as President of
Arctic Contracting, a heating, ventilation and air conditioning firm since 1985,
and   currently  is  owner  of  Fideli   Associates   Consulting.   See  "Recent
Developments."

PETER J.  BELLEZZA  served as a Director of the Company  from  February  1994 to
December 1998. Prior to joining the Company, Mr. Bellezza was President and 100%
owner of Alpha  Systems,  Inc., a  manufacturer  and marketer of high end vacuum
valves,  from 1968 to 1992.  Mr.  Bellezza  has been  retired  since  1992.  Mr.
Bellezza and Vito Bellezza are brothers. See "Recent Developments."

VAN SALIBA was the President of QCC from February,  1998 until August, 1998. Mr.
Saliba is the owner and President of Lumberman's  Credit Association of Florida.
Previously,  Mr.  Saliba was a certified  public  accountant  and  auditor  with
Deloitte and Touche, LLP.

J.D.  TALTON  was Vice  President  of  Finance  of EBS from  March,  1997  until
September  1998 and served as  Controller  for EBS since 1991.  Mr. Talton holds
bachelor's  degrees  in  Business   Administration  from  Florida  International
University (Finance) and Florida Atlantic University (Accounting).

ALBERT J. BRIGGS was the Vice President of Development of EBS from February 1997
until September, 1998. From 1986 to June 1991, Mr. Briggs was the Vice President
of Customer  Support  Programs with Unisys Corp. From July 1991 to January 1997,
Mr. Briggs was a consultant  providing product  development  services to various
companies.

TIMOTHY F. THOMPSON was Vice  President of  Development of the Company from June
1998 until October 1998. Prior to joining the Company.  Mr. Thompson worked as a
Project Manager for IBM.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

         On December 23, 1998,  the Company  filed a  registration  statement on
Form 8-A registering the Company's common stock pursuant to Section 12(g) of the
Securities  Exchange Act of 1934 (the "Exchange  Act").  Following the filing of
the Form 8-A, the Company  became  subject to Section  16(a) of the Exchange Act
which requires the Company's directors and executive  officers,  and persons who
own more than ten percent (10%) of a registered  class of the  Company's  equity
securities,  to file with the Securities and Exchange Commission initial reports
of  ownership  and  reports of changes in  ownership  of common  stock and other
equity  securities  of the  Company.  Officers,  directors  and greater than ten
percent  shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file. No such reports were required to be
filed  by the  Company's  officers,  directors  and  greater  than  ten  percent
beneficial owners during the year ended December 31, 1998.

                                       24

<PAGE>

ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

         The following table shows all the cash  compensation paid or to be paid
by the Company to the Chief Executive Officer,  and all officers who received in
excess of  $100,000  in annual  salary and bonus,  for the  fiscal  years  ended
December 31, 1998, 1997 and 1996:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------

                                                                              Long Term Compensation
                                                                         -------------------------------
                                             Annual Compensation          Awards             Payouts
                                    ------------------------------------ -------------------------------
       (a)           (b)    (c)       (d)           (e)          (f)       (g)       (h)       (i)
                                                              Restricted             LTIP    All Other
     Name and                                  Other Annual     Stock    Options/   Payouts Compensation
Principal Position  Year  Salary($) Bonus($) Compensation ($)   Awards    SARs(#)     ($)        ($)
------------------  ----  --------  -------  ---------------  ---------- ---------  ------- ------------

<S>                 <C>   <C>       <C>         <C>                <C>   <C>            <C>        <C>
     Vito A.        1998  $154,500  $30,000     $ 28,040(2)       -0-    500,000(3)    -0-        -0-
Bellezza(1), CEO
                    1997  $120,000  $33,000     $     -0-         -0-    200,000(3)    -0-        -0-

                    1996  $ 10,000       --           --          --          --       --         --

Harold S. Fischer,  1998  $154,500  $30,000     $ 9,600(4)        -0-    500,000       -0-        -0-
   President
                    1997  $120,000  $23,000     $    -0-          -0-    200,000(5)    -0-        -0-
William R. Daniels  1998  $ 94,000  $12,500     $    -0-          -0-         -0-      -0-        -0-

--------------------------------------------------------------------------------------------------------
</TABLE>
1.       Mr. Bellezza `s employment with the Company terminated in March 1999.
2.       Housing and automobile  allowance paid by the Company on Mr. Bellezza's
         behalf.
3.       Such options were cancelled in March 1999.
4.       Automobile expenses paid by the Company.
5.       Options exercisable at $.875 until October 31, 2002.


         The  following  table sets forth  certain  information  with respect to
options granted during the last fiscal year to the Company's  Executive Officers
named in the above Summary Compensation Table.

<TABLE>
<CAPTION>

                            OPTION/SAR GRANTS IN LAST FISCAL YEAR
          (a)             (b)                 (c)                (d)              (e)

                                        % of Total Options
                  Number of Securities Options/SARs Granted
                   Underlying Option/  Granted to Employees  Exercise or Base  Expiration
     Name          SARs Granted (#)      in Fiscal Year       Price (# Share)     Date
-----------------  ----------------    --------------------  ----------------  ----------
<S>                  <C>                       <C>               <C>             <C>  <C>
Vito A. Bellezza     500,000(1)                25.9%             $1.875          3/13/03
Harold S. Fischer    500,000                   25.9%             $1.875          3/13/03

-----------------------------------------------------------------------------------------
</TABLE>
1.       Such Options were cancelled in March 1999.

                                       25

<PAGE>

         The  following  table sets forth  certain  information  with respect to
options  exercised  during  the fiscal  year ended  December  31,  1998,  by the
Company's  Executive Officers named in the Summary  Compensation Table, and with
respect to unexercised options held by such person at the end of the fiscal year
ended December 31, 1998.

<TABLE>
<CAPTION>

AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
      (a)               (b)           (c)               (d)                  (e)

                                               =========================================
                                                     Number of            Value of
                                               Securities Underlying     Unexercised
                                                Unexercised Options/    In-the-Money
                                                 SARs at FY-End (#)    Options/SARs at
                  Shares Acquired     Value         Exercisable/     FY-End Exercisable/
     Name         on Exercise (#)  Realized ($)    Unexercisable      Unexercisable(1)
----------------------------------------------------------------------------------------
<S>                     <C>           <C>         <C>       <C>         <C>        <C>
Vito A. Bellezza        0              0           1,500,000/0(2)        $1,912,500/0
Harold S. Fischer       0              0             700,000/0           $  100,000/0

----------------------------------------------------------------------------------------
</TABLE>
1.       Based upon a closing price of $1.375 per share of the Company's  Common
         Stock as reported by the OTC Bulletin Board for December 31, 1998.
2.       Certain  options held by Mr. Bellezza may be subject to cancellation in
         the event that the Company's  Board of Directors  determines  that such
         securities  were not validly issued or Mr. Bellezza is determined to be
         liable for damages caused to the Company.

EMPLOYMENT AGREEMENTS

         As of  January  7,  1998,  the  Company  entered  into a two  (2)  year
employment agreement with Vito Bellezza. The agreement provided for Mr. Bellezza
to receive a salary of  $156,000  per annum  during the first year and an annual
increase  as  determined  in the  discretion  of the  Board  of  Directors.  The
agreement  also  provides  for the payment of a  quarterly  bonus in cash to Mr.
Bellezza based upon the Company achieving  certain quarterly profit targets.  In
addition,  Mr. Bellezza was also granted the right to purchase ten percent (10%)
of the  outstanding  Common Stock of EBS if EBS (i) files for an initial  public
offering,  (ii) is acquired by another company,  (iii) in the event of the death
of Mr. Bellezza or (iv) Mr. Bellezza terminates his employment with the Company.
Mr. Bellezza was also entitled to reimbursement of business expenses including a
car allowance of $800 per month.  Mr.  Bellezza was terminated for "cause" under
his employment agreement in March, 1999.

         As of  January  7,  1998,  the  Company  entered  into a two  (2)  year
employment  agreement  with Harold S.  Fischer,  pursuant  to which Mr.  Fischer
serves as the Company's  President.  The agreement  provides for Mr.  Fischer to
receive  a salary of  $156,000  per annum  during  the first  year and an annual
increase  as  determined  in the  discretion  of the  Board  of  Directors.  The
agreement  also  provides  for the payment of a  quarterly  bonus in cash to Mr.
Fischer based upon the Company achieving  certain  quarterly profit targets.  In
addition,  Mr.  Fischer has been granted the right to purchase ten percent (10%)
of the  outstanding  Common  Stock  of EBS if EBS (i)  files an  initial  public

                                       26

<PAGE>

offering,  (ii) is acquired by another company,  (iii) in the event of the death
of Mr. Fischer or (iv) Mr. Fischer  terminates his employment  with the Company.
Mr. Fischer is also entitled to reimbursement of business  expenses  including a
car allowance of $800 per month.

DESCRIPTION OF THE OPTION PLANS

         As of December 17, 1997, the Board of Directors of the Company  adopted
the 1997 Employee Stock Option Plan (the "Employee Plan"), and the 1997 Officers
and Directors  Stock Option Plan (the  "Officers and Directors  Plan",  together
with the Employee Plan, the "Option Plans").  The purpose of the Option Plans is
to provide a means whereby selected  employees,  officers,  and directors of the
Company, or of any parent or subsidiary thereof,  may be granted incentive stock
options and/or  nonqualified stock options to purchase shares of Common Stock in
order to attract and retain the services or advice of such employees,  officers,
and  directors  and to provide  additional  incentive  for such persons to exert
maximum efforts for the success of the Company and its affiliates by encouraging
stock  ownership in the Company.  The  description of the Option Plans set forth
below is  qualified in its entirety by reference to the full text of each of the
Option Plans.

         The  maximum  number of shares of Common  Stock  with  respect to which
awards may be granted  pursuant to the Employee  Plan and Officers and Directors
Plan was initially 300,000 shares and 600,000 shares, respectively.  On July 30,
1998,  the Board reserved an additional  50,000 shares for issuance  pursuant to
the Employee Plan and an additional  350,000 shares for issuance pursuant to the
Officers  and  Directors  Plan and amended  said plans to reflect  the same.  On
October 5, 1998, the Board of Directors reserved an additional  1,150,000 shares
for issuance  pursuant to the Officers and Directors  Plan and amended said plan
to reflect the additional shares.  Shares issuable under the Option Plans may be
either treasury shares or authorized but unissued shares, or shares purchased on
the open market and shall include shares representing the unexercised portion of
Options  granted  under  the  Plans  which  expire or  terminate  without  being
exercised in full.  The number of shares  available for issuance will be subject
to adjustment to prevent dilution in the event of stock splits,  stock dividends
or other changes in the capitalization of the Company.

         Subject to compliance with Rule 16b-3 of the Securities Exchange Act of
1934,  the Plan shall be  administered  by the Board of Directors of the Company
(the  "Board")  or, in the event the Board  shall  appoint  and/or  authorize  a
committee,  such as the  Compensation  Committee,  of two or more members of the
Board to administer the Plan, by such committee.  The  administrator of the Plan
shall  hereinafter  be referred to as the "Plan  Administrator".  Except for the
terms and conditions  explicitly set forth herein, the Plan Administrator  shall
have the authority, in its discretion,  to determine all matters relating to the
options to be granted under the Plan, including,  without limitation,  selection
of whether an option will be an incentive  stock option or a nonqualified  stock
option, selection of the individuals to be granted options, the number of shares
to be subject to each option, the exercise price per share, the timing of grants
and all other terms and conditions of the options.

                                       27

<PAGE>

         Options granted under the Option Plans may be "incentive stock options"
("Incentive  Options") within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"),  or stock options which are not incentive
stock options ("Non-Incentive Options" and, collectively with Incentive Options,
hereinafter referred to as "Options").  Each Option may be exercised in whole or
in part; provided, that only whole shares may be issued pursuant to the exercise
of any  Option.  Subject  to any other  terms and  conditions  herein,  the Plan
Administrator  may provide  that an Option may not be  exercised  in whole or in
part for a stated  period  or  periods  of time  during  which  such  Option  is
outstanding; provided, that the Plan Administrator may rescind, modify, or waive
any such limitation  (including by the acceleration of the vesting schedule upon
a change in control of the  Company) at any time and from time to time after the
grant date thereof. During an Optionee's lifetime, any Incentive Options granted
under the Plan are personal to such Optionee and are exercisable  solely by such
Optionee.

         Payment for shares of Common Stock purchased upon exercise of an Option
granted  under  either of the Plans  must be made in full in cash at the time of
such exercise;  provided,  however, that the Plan Administrator can determine at
the time the Option is granted in the case of Incentive Options,  or at any time
before exercise in the case of Nonincentive  Options,  that additional  forms of
payment will be permitted. To the extent permitted by the Plan Administrator and
applicable laws and regulations (including,  without limitation, federal tax and
securities  laws and  regulations  and state  corporate  law),  an option may be
exercised by:

                  (a)  delivery of shares of Common Stock of the Company held by
an Optionee  having a fair market value equal to the exercise  price,  such fair
market value to be determined in good faith by the Plan Administrator;

                  (b)  delivery  of a  properly  executed  Notice  of  Exercise,
together with irrevocable  instructions to a broker,  all in accordance with the
regulations of the Federal Reserve Board, to promptly deliver to the Company the
amount of sale or loan  proceeds  to pay the  exercise  price  and any  federal,
state, or local  withholding  tax obligations  that may arise in connection with
the exercise; or

                  (c)  delivery  of a  properly  executed  Notice  of  Exercise,
together with  instructions to the Company to withhold from the shares of Common
Stock that would  otherwise  be issued  upon  exercise  that number of shares of
Common Stock having a fair market value equal to the option exercise price.

         Upon a Change in Control of the Company,  any award carrying a right to
exercise that was not previously exercisable shall become fully exercisable, the
restrictions,  deferral limitations and forfeiture  conditions applicable to any
other award  granted  shall lapse and any  performance  conditions  imposed with
respect to awards shall be deemed to be fully achieved.

         Awards  under  the  Option  Plans  may  not  be  transferred,  pledged,
mortgaged,  hypothecated or otherwise encumbered other than by will or under the
laws of descent and distribution.

                                       28

<PAGE>

         The Board may amend,  alter,  suspend,  discontinue  or  terminate  the
Option  Plans at any time,  except that the Board may not increase the number of
shares subject to the Plan, unless such increase is due to a reclassification or
increase or decrease in the number of the issued shares of the Company's  Common
Stock, or reduce the option exercise price below 85% of fair market value of the
shares subject to the option at the time the option was granted. In addition, no
amendment to, or alteration,  suspension,  discontinuation or termination of the
Option Plans may materially impair the rights of any participant with respect to
any award  without such  participant's  consent.  Unless  terminated  earlier by
action of the Board of Directors, the Employee Plan and the Officer and Director
Plan shall  terminate  ten (10) years and five (5)  years,  respectively,  after
adoption by the shareholders.

The 1999 Incentive Plan

         As of March 10, 1999 the Board of Directors of the Company,  subject to
approval  of  the  Company's  shareholders,  adopted  the  1999  Incentive  Plan
(hereinafter  called the "1999  Plan").  The 1999 Plan has been  adopted for the
purpose of attracting and retaining  persons of ability as directors,  employees
or consultants or advisors of the Company.  and its  subsidiaries,  motivate and
reward good  performance,  encourage  such  employees to continue to exert their
best  efforts  on  behalf  of the  Company  and  its  subsidiaries  and  provide
opportunities  for stock  ownership by such employees in order to increase their
proprietary  interest  in the  Company  by  providing  incentive  awards  to key
employees,  whose responsibilities and decisions directly affect the performance
of the Company and its subsidiaries.

         The  maximum  number of shares of Common  Stock  with  respect to which
awards may be granted pursuant to the 1999 Plan is initially  4,000,000  shares.
Shares  issuable under the 1999 Plan may be either treasury shares or authorized
but unissued shares. The number of shares available for issuance will be subject
to adjustment to prevent dilution in the event of stock splits,  stock dividends
or other changes in the capitalization of the Company.

         Subject to compliance with Rule 16b-3 of the Securities Exchange Act of
1934,  the Plan shall be  administered  by the Board of Directors of the Company
(the  "Board")  or, in the event the Board  shall  appoint  and/or  authorize  a
committee,  such as the  Compensation  Committee,  of two or more members of the
Board to administer the Plan, by such committee.  The  administrator of the Plan
shall  hereinafter  be referred to as the "Plan  Administrator".  Except for the
terms and conditions  explicitly set forth herein, the Plan Administrator  shall
have the authority, in its discretion,  to determine all matters relating to the
options to be granted under the Plan, including,  without limitation,  selection
of whether an option will be an incentive  stock option or a nonqualified  stock
option, selection of the individuals to be granted options, the number of shares
to be subject to each option, the exercise price per share, the timing of grants
and all other terms and conditions of the options.

         The Plan  Administrator can determine at the time the option is granted
in the case of incentive  stock options,  or at any time before  exercise in the
case of nonqualified  stock options,  that  additional  forms of payment will be

                                       29

<PAGE>

permitted. To the extent permitted by the Plan Administrator and applicable laws
and regulations (including,  without limitation, federal tax and securities laws
and regulations and state corporate law), an option may be exercised by:

                  (a)  delivery of shares of Common Stock of the Company held by
an Optionee  having a fair market value equal to the exercise  price,  such fair
market value to be determined in good faith by the Plan Administrator;

                  (b)  delivery  of a  properly  executed  Notice  of  Exercise,
together with irrevocable  instructions to a broker,  all in accordance with the
regulations of the Federal Reserve Board, to promptly deliver to the Company the
amount of sale or loan  proceeds  to pay the  exercise  price  and any  federal,
state, or local  withholding  tax obligations  that may arise in connection with
the exercise; or

                  (c)  delivery  of a  properly  executed  Notice  of  Exercise,
together with  instructions to the Company to withhold from the shares of Common
Stock that would  otherwise  be issued  upon  exercise  that number of shares of
Common Stock having a fair market value equal to the option exercise price.

         Upon a Change in Control of the Company,  any award carrying a right to
exercise that was not previously exercisable shall become fully exercisable, the
restrictions,  deferral limitations and forfeiture  conditions applicable to any
other award  granted  shall lapse and any  performance  conditions  imposed with
respect to awards shall be deemed to be fully achieved.

         Awards under the 1999 Plan may not be transferred,  pledged, mortgaged,
hypothecated  or  otherwise  encumbered  other than by will or under the laws of
descent and  distribution,  except that the  Committee  may permit  transfers of
awards for estate planning purposes if, and to the extent, such transfers do not
cause a  participant  who is then  subject to Section 16 of the  Exchange Act to
lose the benefit of the exemption under Rule 16b-3 for such transactions.

         The Board may amend, alter, suspend,  discontinue or terminate the 1999
Plan at any time,  except that any such action  shall be subject to  stockholder
approval  at the  annual  meeting  next  following  such  Board  action  if such
stockholder  approval is required by federal or state law or  regulation  or the
rules of any  exchange or automated  quotation  system on which the Common Stock
may then be listed or quoted, or if the Board of Directors otherwise  determines
to submit such action for  stockholder  approval.  In  addition,  no  amendment,
alteration,  suspension,  discontinuation  or  termination  to the 1999 Plan may
materially  impair  the  rights of any  participant  with  respect  to any award
without such participant's  consent.  Unless terminated earlier by action of the
Board of Directors,  the 1999 Plan shall terminate ten (10) years after adoption
by the shareholders.

        TYPES OF AWARDS

        STOCK  OPTIONS.  Options  granted  under the 1999 Plan may be "incentive
stock options"  ("Incentive  Options")  within the meaning of Section 422 of the
Code or stock  options which are not  incentive  stock  options  ("Non-Incentive

                                       30

<PAGE>

Options" and,  collectively with Incentive Options,  hereinafter  referred to as
"Options") will be granted, the number of shares subject to each Option granted,
the prices at which Options may be exercised  (which in the case of an Incentive
Option shall not be less than the Fair Market Value of shares of Common Stock on
the  date of  grant),  whether  an  Option  will  be an  Incentive  Option  or a
Non-Incentive  Option,  the time or times and the extent to which Options may be
exercised  and all other terms and  conditions  of Options will be determined by
the Committee.

        Each Incentive  Option shall terminate no later than ten (10) years from
the date of grant,  except as provided  below with respect to Incentive  Options
granted to 10% Stockholders (as hereinafter defined).  Each Non-Incentive Option
shall  terminate  not  later  than ten (10)  years  and one day from the date of
grant.  The exercise  price at which the shares may be purchased  incident to an
Incentive  Option may not be less than the Fair Market Value of shares of Common
Stock at the time the Option is granted,  except as provided  below with respect
to Incentive Options granted to 10% Stockholders.

        The exercise price of an Incentive Option granted to a person possessing
more than 10% of the total  combined  voting power of all shares of stock of the
Company or a parent or subsidiary of the Company ("10% Stockholder") shall in no
event be less than 110% of the Fair  Market  Value of the  shares of the  Common
Stock at the time the  Incentive  Option is  granted.  The term of an  Incentive
Option  granted to a 10%  Stockholder  shall not exceed  five (5) years from the
date of grant.

         The  exercise  price of the  shares to be  purchased  pursuant  to each
Option shall be paid (i) in full in cash, (ii) by delivery (i.e.,  surrender) of
shares of the  Company's  Common  Stock owned by the optionee at the time of the
exercise of the Option,  (iii) in such other consideration as the Committee deem
appropriate,  or (iv) if any  combination  of cash,  surrender  of share or such
other consideration having a total value equal to the purchase price.

        STOCK  APPRECIATION  RIGHTS.  The Committee is authorized to grant stock
appreciation  rights  ("SARs")  under the 1999 Plan on the same  basis as it may
grant an Option.  SARs are a form of award  whereby the Company  calculates  the
amount of a cash payment to be made to an award recipient based upon an increase
in the  market  value  of a  fixed  number  shares  of  Common  Stock  during  a
pre-determined  period of time. SARs may be granted alone or in combination with
either  an  Incentive  Option  or a  Non-Incentive  Option.  The  Committee  may
determine  the number of shares of common  stock that shall be used to determine
the  value  of the  SAR  and  the  time or  times  during  which  the SAR may be
exercised.  The exercise of an SAR may be  conditioned by the Committee upon the
satisfaction of certain events, performance of the recipient of other criteria.

        RESTRICTED AND DEFERRED STOCK. An award of restricted  stock or deferred
stock may be  granted  under  the 1999  Plan.  Restricted  stock is  subject  to
restrictions on transferability  and other restrictions as may be imposed by the
Committee at the time of grant. In the event that the holder of restricted stock
ceases to be employed by the Company during the applicable  restrictive  period,
restricted stock that is at the time subject to restrictions  shall be forfeited
and reacquired by the Company.  Except as otherwise provided by the Committee at
the time of grant,  a holder of restricted  stock shall have all the rights of a

                                       31

<PAGE>

stockholder  including and receive other distribution,  without limitation,  the
right to vote restricted stock and the right to recover  dividends  thereon.  An
award of deferred stock is an award that provides for the issuance of stock upon
expiration  of a  deferral  period  established  by  the  Committee.  Except  as
otherwise  determined by the  Committee,  upon  termination of employment of the
recipient of the award during the applicable  deferral period, all stock that is
at the time subject to deferral shall be forfeited. Until such time as the stock
which is the subject of the award is unissued, the recipient of the award has no
rights as a stockholder.

        PERFORMANCE UNITS.  Performance Units may be granted by the Committee to
individuals  or  groups  of  individuals  participating  under  the  1999  Plan.
Performance Units are tied to the successful  completion of certain  performance
driven Company goals during a given period of time and will be assigned a dollar
value by the Committee.  Upon the satisfactory attainment of the goal identified
by  the  Committee  during  the  period  prescribed  for  its  completion,   the
participant or participants reaching such goal shall be entitled to a payment in
settlement  of  each  Performance  Unite  earned  by such  participant.  Certain
adjustments to the amount of the cash payment,  if any, to be made incident to a
grant  of  Performance  Units  may be  made  by the  Committee  in the  event  a
participant  ceases to be employed by the Company during the performance  period
or upon the occurrence of a significant  event that causes the attainment of the
prescribed goal more or less likely to occur during the performance period. Each
Performance  Unit  may be  paid in  whole  shares  of  Common  Stock,  including
restricted  stock and deferred  stock,  or cash, or in any combination of Common
Stock and cash.

        LOANS AND  SUPPLEMENTAL  CASH  PAYMENTS.  The  Committee may provide for
supplemental  cash  payments  and  loans to  participants  in the  1999  Plan in
connection  with awards granted under the 1999 Plan. The Committee shall specify
the  terms  and  conditions  of such  payments,  provided  that  in the  case of
supplemental  cash  payments the amount of such payment  shall not exceed (i) in
the case of an  Option,  the  excess of the fair  market  value of the shares of
Common Stock on the date of exercise over the option price,  or (ii) in the case
of award of an SAR,  Performance  Unit,  Restricted Stock or Deferred Stock, the
value of the shares of Common Stock and other consideration issued in payment of
such award. In the case of loans,  any such loan shall be evidenced by a written
loan agreement or other instrument setting forth all terms and conditions of the
loan.

                                       32

<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The  following  table sets forth certain  information,  as of April 20,
1998 with respect to the beneficial ownership of the outstanding Common Stock by
(i) any  holder  of more  than five  (5%)  percent;  (ii) each of the  Company's
officers and directors; and (iii) the directors and officers of the Company as a
group:

Name and Address of           Shares of Common Stock
Beneficial Owner(1)           Beneficially Owned(2)         Percent of Class(3)
-------------------           ---------------------         -------------------
Vito A. Bellezza(4)                 5,242,136(5)                      33.5%

Harold S. Fischer(6)                2,991,500(7)                      20.2%

J. Alan Lindauer(8)                   500,000(9)                       3.5%

Charles D. Winslow(10)                150,000(11)                      1.1%

Greg Seminack(12)                      75,000(13)                         *

Rebecca Walzak(14)                     17,000                             *

Patrick J. Haney(15)                   54,200(16)                         *

All Officers and Directors          3,787,700(7)(9)(11)(13)(16)       25.8%
  as a Group (6 persons)

----------
*        represents  less than 1% of the total number of shares of the Company's
         Common Stock outstanding
1.       Unless  noted  otherwise,  the address for such person is c/o  Triangle
         Imaging Group, Inc., 1800 NW 49th Street, Suite 100, Ft. Lauderdale, FL
         33309.
2.       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.  A person is deemed to be a beneficial owner
         of any  securities  of which  that  person  has the  right  to  acquire
         beneficial ownership within sixty (60) days.
3.       Calculated based upon 14,143,791  shares of common stock outstanding on
         April 20, 1999.
4.       Mr.  Bellezza  was the  Chairman  of the  Board  of the  Company  until
         December 1998 and Chief Executive  Officer of the Company,  EBS and QCC
         until March 1999.
5.       Includes (i) 485,500  shares held of record by Judith  Bellezza  (a/k/a
         Judith Klotz),  Mr.  Bellezza's  wife, (ii) 1,500,000  shares of Common
         Stock allegedly issuable upon the exercise of stock options at exercise
         prices ranging from $.05 to $.20 per share,  and (iii) 211,636 believed
         to  be  owned  by  DeltaCap  Corporation,  a  company  believed  to  be
         beneficially  owned by Mr.  Bellezza.  The beneficial  ownership of the
         Company's  securities by Mr. Bellezza is unclear to the Company because
         of (i) Mr. Bellezza's failure to file appropriate  documents indicating
         his  beneficial   ownership  of  the  Company's   securities  with  the
         Securities and Exchange Commission and (ii) a pending  investigation by
         the  Board  of  Directors  assessing  the  validity  of  the  Company's
         securities   issued  to  Mr.   Bellezza,   Ms.   Bellezza  and  Omnicap
         Corporation.
6.       Mr. Fischer is a director and President of the Company, EBS and QCC.
7.       Includes  (i) 291,500  shares of Common  Stock  owned by Mr.  Fischer's
         wife,  and (ii)  700,000  shares  of  Common  Stock  issuable  upon the
         exercise of stock  options at  exercise  prices  ranging  from $.875 to
         $1.875 per share.  Mr. Fischer  disclaims the  beneficial  ownership of
         6,368,454  shares of Common Stock held by certain  stockholders  of the
         Company,  each  of  whom  have  agreed  pursuant  to  the  terms  of  a
         stockholders  agreement to vote in favor of the directors  nominated by
         Mr. Fischer. See "Stockholders Agreement."
8.       Mr. Lindauer is a director of the Company.
9.       Includes  500,000  shares of Common  Stock  held by  Waterside  Capital
         Corporation.  Mr. Lindauer is the President and Chief Executive Officer
         of Waterside Capital Corporation.
10.      Mr. Winslow is a director of the Company.

                                       33

<PAGE>

11.      Includes  50,000  shares of Common Stock  issuable upon the exercise of
         stock options at an exercise price of $2.50 per share.
12.      Mr. Seminack is the Company's Vice President of Finance.
13.      Includes  75,000  shares of Common Stock  issuable upon the exercise of
         stock options at an exercise price of $3.00 per share.
14.      Ms. Walzak is the Company's Vice President of Consulting.
15.      Mr. Haney is the Executive Vice President of QCC.
16.      Includes  25,000  shares of Common Stock  issuable upon the exercise of
         stock options exercisable at an exercise price of $2.50 per share.


STOCKHOLDERS AGREEMENT

         As of April 16, 1999,  shareholders of the Company beneficially holding
an aggregate of 6,368,454  shares of Common Stock,  or 45.7% of the total number
of shares then outstanding,  entered into a Stockholders  Agreement  pursuant to
which the participating  shareholders (the "Participating  Shareholders") agreed
to  certain  matters  pertaining  to the  governance  of  the  Company  and  the
circumstances under which the shares held by the Participating  Shareholders may
be sold or  transferred.  The  Participating  Shareholders  agreed,  among other
things, that (i) at any annual or special meeting of stockholders called for the
purpose of voting on the  election  of  directors,  or by  consensual  action of
stockholders  with  respect to the  election  of  directors,  the  Participating
Stockholders  will vote the shares of the Company's Common Stock held thereby in
favor of the directors nominated by Harold S. Fischer,  the Company's President,
and (ii) except for certain permitted transfers,  each Participating Shareholder
will not sell or transfer  shares of the  Company's  Common  Stock held  thereby
without first granting the Company and then the other Participating Shareholders
with a right  of  first  offer.  Although  the  Company  is not a  party  to the
Stockholders   Agreement,   certain  members  of  management  are  Participating
Shareholders, including Harold S. Fischer, the Company's President.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         On August 22, 1995, the Company allegedly issued 10,000 shares of Class
A Convertible Preferred Stock to Vito Bellezza, the Company's former Chairman of
the Board and Chief Executive  Officer,  in exchange for the payment of $10,000.
The shares of Class A  Convertible  Stock  were  allegedly  convertible  into an
aggregate of 1,500,000  shares of the Company's Common Stock. On March 23, 1998,
the Company issued  1,500,000 shares of Common Stock to Mr. Bellezza in exchange
for the  cancellation  of the  10,000  shares of Class A  Convertible  Preferred
Stock.

         On October 31, 1995,  the Company issued 720,000 shares of Common Stock
to Mr. Bellezza  allegedly for consulting fees and expenses  incurred by him and
280,000 shares of Common Stock to Omnicap Corp., a corporation controlled by Mr.
Bellezza,  allegedly for  satisfaction  of rent and other  services  provided by
Omnicap.

         On November 15, 1995, the Company issued 100,000 shares of Common Stock
to  Mr.  Bellezza  allegedly  for  services  rendered  to  the  Company  without
compensation during 1995.

                                       34

<PAGE>

         On September 4, 1996, the Company issued 350,000 shares of Common Stock
to Mr. Bellezza  allegedly as compensation  for settling an outstanding  lawsuit
against the Company.

         On October 31, 1996,  the Company issued 275,000 shares of Common Stock
to  Mr.  Bellezza  allegedly  for  services  rendered  to  the  Company  without
compensation during 1996.

         On January 23, 1997,  in exchange for an investment of $100,000 made by
Mr.  Bellezza,  the  Company  issued  (i) a  subordinated  note in the amount of
$50,000, (ii) options to purchase 1,000,000 shares of the Company's Common Stock
at an exercise  price of $.05 per share,  and (iii) options to purchase  500,000
shares of the Company's Common Stock at $.20 per share.

         On October 30, 1997, the Company issued to each of Messrs. Bellezza and
Harold S. Fischer  options under the Officers and Directors Stock Option Plan in
the amount of 200,000 shares exercisable for a period of five years at $.875 per
share. Mr.  Bellezza's  options  terminated when his employment with the Company
terminated in March 1999.

         During 1997,  the Company  issued an  aggregate of 2,283,000  shares of
Common Stock to the Company's President and Director,  Harold S. Fischer and his
wife for the consideration of $743,700.

         On March 13,  1998,  the Company  issued  options to  purchase  500,000
shares of Common Stock at an exercise  price of $1.875 per share to each of Vito
Bellezza and Harold S.  Fischer.  Mr.  Bellezza's  options  terminated  when his
employment with the Company terminated in March 1999.

         On October  15,  1998,  the Company  entered  into a Series C Preferred
Stock  Purchase  Agreement  (the "Purchase  Agreement")  with Waterside  Capital
Corporation,  a small business  investment  company  ("Waterside"),  pursuant to
which the  Company has agreed to issue 1,500  shares of the  Company's  Series C
Preferred  Stock and a Warrant  exercisable  for shares of the Company's  Common
Stock (the "Warrant") in exchange for the investment of $1,500,000. The Purchase
Agreement  requires  that the Company use the proceeds from the  transaction  to
repay a portion of that  certain  promissory  note  issued by the Company to the
former owners of Engineered Business Systems, Inc., a wholly owned subsidiary of
the Company,  repay trade payables and for working capital purposes. The Company
is also obligated  under the terms of the Purchase  Agreement to cause a nominee
of  Waterside  to be  elected to the Board of  Directors  of the  Company  which
obligation has been satisfied by the  appointment of Mr. J. Alan Lindauer to the
Board  of  Directors.  In light of the  fact  that the  Company  was not able to
lawfully  assign rights and  preferences to a class of preferred stock under its
existing Articles of Incorporation, the Company issued to Waterside a promissory
note in the aggregate  principal  amount of  $1,500,000  (the "Note") in lieu of
issuing  shares of the Company's  Series C Preferred  Stock at the closing.  The
Note bears interest at the rate of 14% per annum;  provided however, that should
the Company issue to Waterside  the shares of the  Company's  Series C Preferred
Stock  purchased  pursuant to the Purchase  Agreement prior to January 15, 1998,
all of the Company's obligations under the Note shall terminate and no principal
and interest shall be due and payable to Waterside. To date, the Company has not
issued the shares of Series C Preferred Stock to Waterside. See "Proposal Three"

                                       35

<PAGE>

regarding an amendment to the Company's  Articles of  Incorporation  authorizing
the issuance of preferred stock with specific rights and preferences.

         Upon issuance of the Company's  Series C Preferred  Stock,  the holders
thereof will have the right (i) to receive a  liquidation  payment of $1,000 per
share plus accrued unpaid  dividends,  (ii) to receive a quarterly cash dividend
of $31.25  per  share,  (iii) to vote with  respect  to  certain  matters  which
adversely  effect  the  holder of Series C  Preferred  Stock,  (iv) to elect one
member to the Board of Directors of the Company,  and (v) to require the Company
to redeem the shares of Series C Preferred  Stock  commencing  as of October 15,
2003 at a price of $1,500 per share. In addition,  the Company may not (a) issue
any shares of capital  stock with rights pari passu  with,  or superior  to, the
Series C Preferred  Stock or (b) redeem under  certain  circumstances  shares of
capital stock ranking junior to the Series C Preferred Stock,  without the prior
written consent of the holders of a majority of the Series C Preferred shares.

         The  Warrant  entitled  the holder to purchase up to the greater of (i)
500,000  shares of the  Company's  Common  Stock or (ii) 1% of the shares of the
Company's  Common Stock  outstanding on a fully diluted  basis.  The Warrant was
exercisable  at any time prior to  October  15,  2005.  In  connection  with the
settlement  of a pending  legal  proceeding  brought by  Waterside  against  the
Company,  the exercise  price of the Warrant was reduced to $.05 per share.  The
Warrant was exercised in full in April 1999.

         On April 15 1998, the Company issued options to purchase  50,000 shares
of Common Stock to Charles D. Winslow,  the Company's  Chairman of the Board, at
an exercise price of $2.50 per share.

                                       36

<PAGE>

ITEM 13. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit
Number Description of Exhibit

3.1*     Articles of Incorporation, as amended
3.2*     Bylaws, as amended
10.1**   Agreement  and Plan of Merger  dated as of April 30,  1998 by and among
         Triangle Imaging Group, Inc., QuickCredit Corp., CBS Acquisition Corp.,
         Credit Bureau Services, Inc. , Kim A. Naimoli and Steven P.
         Naimoli.
10.2**   Agreement  and Plan of Merger  dated as of April 30,  1998 by and among
         Triangle Imaging Group, Inc., QuickCredit Corp., CBS Acquisition Corp.,
         Credit Bureau Services, Inc. , Kim A. Naimoli and Steven P.
         Naimoli.
10.3**   Agreement  and Plan of Merger  dated as of April 30,  1998 by and among
         Triangle Imaging Group, Inc., QuickCredit Corp., CBS Acquisition Corp.,
         Credit Bureau Services, Inc. , Kim A. Naimoli and Steven P.
         Naimoli.
10.4**   Stock Purchase  Agreement  dated as of May 29, 1998 by and among Thomas
         Secreto, Arthur Marino and Triangle Imaging Group, Inc.

10.5**   Stock Purchase Agreement dated as of May 29, 1998 by and between Marios
         Roussos and Triangle Imaging Group, Inc.

10.6*    Series C Preferred  Stock  Purchase  Agreement  dated as of October 15,
         1998 by and between the Company and Waterside Capital Corporation.

21.1     Subsidiaries of the Registrant.

*    Incorporated  by reference to the Form  Registration  Statement on Form 8-A
filed on December 23, 1998.

**   Incorproated  by reference to the current Report on Form 8-K filed with the
Commission on June 23, 1998.

***  Incorporated  by reference to the Current Report on form 8-K filed with the
Commission on November 5, 1998.

(b)  Reports on Form 8-K

Form 8-K filed on November 5, 1998, Item 5.


                                       37

<PAGE>

                 TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 1998 AND 1997

                                                                            Page
                                                                          Number
                                                                          ------

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

CONSOLIDATED  BALANCE  SHEET................................................F-3

CONSOLIDATED STATEMENTS OF OPERATIONS.......................................F-4

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY.............................F-5

CONSOLIDATED STATEMENTS OF CASH FLOWS.......................................F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS...............................F-7-23

                                      F-1

<PAGE>

                          INDEPENDENT AUDITORS' REPORT


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

         We have  audited the  consolidated  balance  sheet of Triangle  Imaging
Group,   Inc.  and  Subsidiaries  as  of  December  31,  1998  and  the  related
consolidated statements of operations,  stockholders'  deficiency and cash flows
for the years ended December 31, 1998 and 1997.  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  Subsidiaries  as of December 31, 1998,  and the results of its
operations  and its cash flows for the years ended December 31, 1998 and 1997 in
conformity with generally accepted accounting principles.



                                           Mazars & Guerard, LLP
                                        Certified Public Accountants

New York, New York
March 26, 1999


                                      F-2

<PAGE>

<TABLE>
<CAPTION>
                  TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

                                DECEMBER 31, 1998


                                     ASSETS

CURRENT ASSETS:
<S>                                                                            <C>        
     Cash and cash equivalents                                                 $   229,423
     Accounts receivable, net of allowance for
         doubtful accounts of $105,000                                             807,241
     Prepaid expenses                                                               46,177
                                                                               -----------
         TOTAL CURRENT ASSETS                                                    1,082,841

EQUIPMENT                                                                          287,732

GOODWILL                                                                         1,998,668

OTHER ASSETS                                                                       525,165
                                                                               -----------

                                                                               $ 3,894,406
                                                                               ===========

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
     Accounts payable and accrued expenses                                     $ 1,121,709
     Deferred revenue                                                              303,420
     Due to stockholder                                                             50,000
     Current portion of long-term debt                                             350,000
                                                                               -----------
         TOTAL CURRENT LIABILITIES                                               1,825,129

LONG-TERM DEBT                                                                   1,900,000

COMMON STOCK SUBJECT TO PUT                                                      1,485,000

STOCKHOLDERS' DEFICIENCY:
     Common stock, $.001 par value, authorized
         50,000,000 shares, 13,011,978 shares issued
         and outstanding                                                            13,012
     Additional paid-in capital                                                  5,919,416
     Accumulated deficit                                                        (5,721,751)
     Deferred compensation                                                         (41,400)
     Common stock subject to put                                                (1,485,000)
                                                                               -----------
         TOTAL STOCKHOLDERS' DEFICIENCY                                         (1,315,723)
                                                                               -----------

                                                                               $ 3,894,406
                                                                               ===========
</TABLE>



                      See notes to consolidated financial statements.
                                            F-3

<PAGE>

<TABLE>
<CAPTION>
                  TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                         Years ended December 31,
                                                       ---------------------------

                                                          1998             1997
                                                       -----------     -----------
<S>                                                    <C>            <C>         
SALES                                                  $  7,608,90    $  5,508,267

COST OF SALES                                            2,272,657       1,577,249
                                                       -----------     -----------

GROSS PROFIT                                             5,336,247       3,931,018

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES             6,104,530       2,753,406

PRODUCT DEVELOPMENT                                      1,032,272              --

NON-CASH IMPUTED COMPENSATION EXPENSE                      637,150         138,158

AMORTIZATION EXPENSE AND GOODWILL WRITE-OFF                952,003          85,483

NON-RECURRING EXPENSES ASSOCIATED WITH ACQUISITIONS        191,269              --

LITIGATION EXPENSES                                        547,000

RESTRUCTURING EXPENSE                                      174,000              --
                                                       -----------     -----------

INCOME (LOSS) FROM OPERATIONS                           (4,301,977)        953,971

INTEREST EXPENSE, net                                      130,616         110,182
                                                       -----------     -----------

INCOME (LOSS) BEFORE MINORITY INTEREST                  (4,432,593)        843,789

MINORITY INTEREST                                               --          24,301
                                                       -----------     -----------

INCOME (LOSS) BEFORE INCOME TAX PROVISION               (4,432,593)        819,488

PROVISION FOR INCOME TAXES                                 226,000        (226,000)
                                                       -----------     -----------

NET INCOME (LOSS) FROM CONTINUING OPERATIONS            (4,658,593)      1,045,488

DISCONTINUED OPERATIONS                                   (473,771)             --
                                                       -----------     -----------

NET INCOME (LOSS)                                      $ (5,132,36)    $ 1,045,488
                                                       ===========     ===========

NET INCOME (LOSS) PER SHARE:
     Basic                                             $      (0.4)    $      0.13
                                                       ===========     ===========
     Diluted                                           $      (0.4)    $      0.09
                                                       ===========     ===========

NUMBER OF SHARES USED IN COMPUTATION:
     Basic                                              11,991,016       8,224,044
                                                       ===========     ===========
     Diluted                                            11,991,016      11,141,700
                                                       ===========     ===========
</TABLE>



                 See notes to consolidated financial statements.
                                       F-4


<PAGE>
<TABLE>
<CAPTION>
                                            TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

                                      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                                                YEARS ENDED DECEMBER 31, 1997 AND 1998

                                                             Preferred Stock          Preferred Stock
                                                                 Class A                  Class B               Common Stock
                                                        ------------------------- ----------------------- ------------------------
                                                          Shares        Amount       Shares      Amount     Shares       Amount   
                                                        -----------   ----------- ----------- ----------- -----------  -----------
<S>                                                          <C>           <C>         <C>    <C>           <C>        <C>        
BALANCE - December 31, 1996                                  10,000        10,000      75,000 $   300,000   5,153,166  $     5,153

       Shares issued for services                                --            --          --          --      33,200           33 
       Shares issued for deferred compensation                   --            --          --          --     650,000          650 
       Shares sold                                               --            --          --          --   2,557,250        2,557 
       Conversion of preferred stock                             --            --     (75,000)   (300,000)  1,500,000        1,500 
       Shares issued for purchase of minority interest           --            --          --          --      75,000           75 
       Shares purchased and retired                              --            --          --          --    (550,000)        (550)
       Amortization of deferred compensation                     --            --          --          --          --           -- 
       Cash received on stock subscription                       --            --          --          --          --           -- 
       Net income                                                --            --          --          --          --           -- 
       Cumulative preferred dividends paid                       --            --          --          --          --           -- 
                                                        -----------   ----------- ----------- ----------- -----------  ----------- 

BALANCE - December 31, 1997                                  10,000        10,000          --          --   9,418,616        9,418 

       Shares issued for services                                --            --          --          --      22,642           23 
       Shares sold                                               --            --          --          --     876,220          876 
       Shares issued for option exercises                        --            --          --          --     570,000          570 
       Shares issued for acquisitions                            --            --          --          --     900,000          901 
       Shares canceled for discontinued operations               --            --          --          --    (270,000)        (270)
       Conversion of preferred stock                        (10,000)      (10,000)         --          --   1,500,000        1,500 
       Shares purchased and retired                              --            --          --          --      (5,500)          (6)
       Cash received on stock subscription                       --            --          --          --          --           -- 
       Stock subscription charged to compensation                --            --          --          --          --           -- 
       Warrants issued for services                              --            --          --          --          --           -- 
       Amortization of deferred compensation                     --            --          --          --          --           -- 
       Net loss                                                  --            --          --          --          --           -- 
                                                        -----------   ----------- ----------- ----------- -----------  ----------- 

BALANCE - December 31, 1998                                      --            --          -- $        --  13,011,978  $    13,012 
                                                        ===========   =========== =========== =========== ===========  =========== 
</TABLE>
<TABLE>
<CAPTION>
                                                                                              Stock        Common        Total
                                                        Paid-In   Accumulated   Deferred   Subscription Stock Subject Stockholders'
                                                        Capital     Deficit   Compensation  Receivable     To Put        Equity
                                                      ----------- ----------- ------------ ------------ ------------- -------------
<S>                                                   <C>         <C>          <C>         <C>           <C>            <C>        
BALANCE - December 31, 1996                           $ 1,722,611 $(1,628,984) $       --  $        --   $        --    $   408,780

       Shares issued for services                          17,065          --          --           --            --         17,098
       Shares issued for deferred compensation            173,350          --    (174,000)          --            --             --
       Shares sold                                        878,393          --          --     (768,700)           --        112,250
       Conversion of preferred stock                      298,500          --          --           --            --             --
       Shares issued for purchase of minority interest     53,175          --          --           --            --         53,250
       Shares purchased and retired                      (278,035)         --          --           --            --       (278,585)
       Amortization of deferred compensation                   --          --      66,300           --            --         66,300
       Cash received on stock subscription                     --          --          --      242,400            --        242,400
       Net income                                              --   1,045,488          --           --            --      1,045,488
       Cumulative preferred dividends paid                     --      (5,891)         --           --            --         (5,891)
                                                      ----------- -----------  ----------  -----------   -----------    -----------

BALANCE - December 31, 1997                             2,865,059    (589,387)   (107,700)    (526,300)           --      1,661,090

       Shares issued for services                          23,978          --          --           --            --         24,001
       Shares sold                                      1,483,189          --          --           --            --      1,484,065
       Shares issued for option exercises                 190,680          --          --           --            --        191,250
       Shares issued for acquisitions                   1,287,503          --          --           --    (1,485,000)      (196,596)
       Shares canceled for discontinued operations       (338,850)         --          --           --            --       (339,120)
       Conversion of preferred stock                        8,500          --          --           --            --             --
       Shares purchased and retired                       (10,643)         --          --           --            --        (10,649)
       Cash received on stock subscription                     --          --          --      501,300            --        501,300
       Stock subscription charged to compensation              --          --          --       25,000            --         25,000
       Warrants issued for services                       410,000          --     (50,000)          --            --        360,000
       Amortization of deferred compensation                   --          --     116,300           --            --        116,300
       Net loss                                                --  (5,132,364)         --           --            --     (5,132,364)
                                                      ----------- -----------  ----------  -----------   -----------    -----------

BALANCE - December 31, 1998                           $ 5,919,416 $(5,721,751) $  (41,400) $        --   $(1,485,000)   $(1,315,723)
                                                      =========== ===========  ==========  ===========   ===========    ===========

                                           See notes to consolidated financial statements.
                                                                 F-5
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
                              TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

                                  CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                 Years Ended December 31,
                                                                                --------------------------
                                                                                   1998            1997
                                                                                -----------    -----------
<S>                                                                             <C>            <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net income (loss)                                                        $(5,132,364)   $ 1,045,488
       Adjustment to reconcile net income (loss) to net cash
       provided by operating activities (net of effects of acquisition):
            Depreciation                                                            156,981        142,203
            Amortization of goodwill                                                952,003         85,483
            Non-cash imputed compensation                                           637,150         83,398
            Minority interest                                                            --         24,301

       Changes in assets and liabilities:
            Increase in accounts receivable                                         (28,686)      (408,687)
            Increase in prepaid expenses                                             (7,688)        (7,214)
            Decrease (Increase) in deferred tax asset                               229,000       (393,000)
            Increase in other assets                                                (17,992)      (366,226)
            Increase in accounts payable and accrued expenses                       717,455        133,079
            (Decrease) Increase in deferred tax liability                            (3,000)       167,000
            (Decrease) Increase in deferred revenue                                 (87,505)        43,722
                                                                                -----------    -----------

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                  (2,584,646)       549,547
                                                                                -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Cash paid for acquisitions                                                  (261,682)            --
       Cash received for acquisition liabilities                                         --         10,000
       Purchase of equipment                                                       (290,224)      (104,976)
                                                                                -----------    -----------

CASH PROVIDED BY (USED) IN INVESTING ACTIVITIES                                    (551,906)       (94,976)
                                                                                -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Proceeds from sale of stock                                                1,484,065        354,650
       Proceeds from option exercises                                               191,250             --
       Cost of purchasing and retiring stock                                        (10,649)      (278,585)
       Cumulative preferred dividends paid, Class B                                      --         (5,891)
       Cash received for stock subscription                                         526,300             --
       Funds provided by new financing                                            1,500,000             --
       Repayment of debt                                                           (850,000)      (200,000)
                                                                                -----------    -----------

CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                   2,840,966       (129,826)
                                                                                -----------    -----------

NET INCREASE (DECREASE) IN CASH                                                    (295,586)       324,745

CASH - BEGINNING OF YEAR                                                            525,009        200,264
                                                                                -----------    -----------

CASH - END OF YEAR                                                              $   229,423    $   525,009
                                                                                ===========    ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
       INFORMATION:
       Cash paid during the year for:
            Interest                                                            $   154,775    $   121,976
                                                                                ===========    ===========
            Taxes                                                               $        --    $     8,000
                                                                                ===========    ===========

       Non cash financing and investing activities:
            Issuance of common stock in connection with acquisitions            $   949,284    $        --
                                                                                ===========    ===========
            Issuance of debt in connection with acquisitions                    $   100,000    $        --
                                                                                ===========    ===========
            Issuance of debt in connection with purchase of minority interest   $        --    $   100,000
                                                                                ===========    ===========
            Shares subject to subscription receivable                           $        --    $   768,700
                                                                                ===========    ===========
            Issuance of common stock in connection with purchase of minority
              interest                                                          $        --    $    53,250
                                                                                ===========    ===========
            Issuance of warrants for services                                   $   410,000    $    50,000
                                                                                ===========    ===========

</TABLE>
                             See notes to consolidated financial statements.
                                                   F-6

<PAGE>

                  TRIANGLE IMAGING GROUP, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 1998 AND 1997


1.       BUSINESS

                  Triangle Imaging Group, Inc. and Subsidiaries (the "Company"),
         formerly  known  as  The  Triangle  Group,   Inc.,   formerly   Benefit
         Performance  of America,  Inc. was  incorporated  under the laws of the
         State of Florida on December  12,  1984.  From 1992,  during  which the
         Company  ceased its  previous  business,  through  December  1996,  the
         Company did not have any  operations.  On December 2, 1996, the Company
         acquired 95% of the outstanding  stock of Engineered  Business Systems,
         Inc.  ("EBS") and on  December  31,  1997 the  remaining  5% of EBS was
         purchased  by the  Company  (see Note 10).  On  February  27,  1998 the
         Company formed QuickCREDIT Corp.  ("QCC"), a Florida  corporation,  for
         the purpose of acquiring and developing Credit Reporting Agencies.

                  EBS designs, develops and sells windows based software systems
         for  both  the  mortgage  quality  control  and  the  credit  reporting
         industries.  Additionally,  the outsourcing  division processes quality
         control files for mortgage banks.

                  QCC  processes  credit  reports  for  the  retail  residential
         mortgage industry.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

                  PRINCIPLES OF CONSOLIDATION

                  The financial  statements  include the accounts of the Company
         and  its   wholly-owned   subsidiaries.   All   material   intercompany
         transactions have been eliminated.

                  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.

                  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.

                                      F-7

<PAGE>

                  GOODWILL

                  Goodwill resulting from acquisitions  represents the excess of
         the purchase  price plus the  acquisition  costs over the fair value of
         the net assets of the  acquired  companies.  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.

                  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.

                  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.  Research and development costs for the year ended
         December 31, 1998 were $1,032,000.

                  MINORITY INTEREST

                  Minority  interest   represents  the  minority   stockholders'
         proportionate  share of the  equity in EBS  which was 5%. In 1997,  the
         Company purchased the minority interest.

                  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.

                  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.

                  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.


                                      F-8

<PAGE>


                  ACCOUNTING OF LONG - LIVED ASSETS

                  The Company reviews  long-lived assets,  certain  identifiable
         assets and any goodwill related to those assets for impairment whenever
         circumstances  and  situations  change such that there is an indication
         that the carrying amounts may not be recoverable.

                  EARNINGS (LOSS) PER SHARE

                  In February 1997,  the Financial  Accounting  Standards  Board
         issued Statement of Financial  Accounting  Standards No. 128, "Earnings
         Per Share" ("FAS No. 128"), which became effective for both interim and
         annual financial statements for periods ending after December 15, 1997.
         FAS No. 128 requires a presentation  of "Basic" and (where  applicable)
         "Diluted" earnings per share.  Generally,  Basic earnings per share are
         computed on only the weighted  average number of common shares actually
         outstanding  during the period, and the Diluted  computation  considers
         potential   shares  issuable  upon  exercise  or  conversion  of  other
         outstanding instruments where dilution would result.  Furthermore,  FAS
         No. 128 requires the restatement of prior period reported  earnings per
         share to conform to the new standard.

                  SOFTWARE DEVELOPMENT COSTS

                  The Company has  capitalized  software costs included in Other
         Assets which totaled $335,545 at December 31, 1998. The  capitalization
         of such  costs is in  accordance  with  SFAS No.  86.  Amortization  is
         computed on an  individual  product basis and has been  recognized  for
         those products  available for market based on their estimated  economic
         lives.

                  ACCOUNTING FOR 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.

                                      F-9

<PAGE>

                  CONCENTRATION OF CREDIT RISKS

                  Financial  instruments that potentially subject the Company to
         concentrations  of credit risk consist  principally  of trade  accounts
         receivable.  Concentrations  of  credit  risk  with  respect  to  trade
         receivables  include  concentrations  of trade  account  from  software
         products users.

3.       EQUIPMENT

           Equipment at December 31, 1998 consisted of the following:

                                               Estimated
                                              useful lives
             Computer hardware                   5 - 7            $     680,418
             Computer software                       5                  151,078
             Office furniture                        7                   70,960
             Office equipment                    5 - 7                  164,188
             Leasehold improvements                  5                   54,718
                                                                  -------------
                                                                      1,121,362
             Less: Accumulated depreciation                             833,630
                                                                  -------------
                                                                  $     287,732
                                                                  =============


4.       DEFERRED REVENUE

                  At December 31, 1998,  deferred revenue of $303,420 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 STOCKHOLDER

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

                                      F-10

<PAGE>

6.       LONG TERM DEBT

                  Long term debt consists of the following:

                                                            December 31,
                                                      -------------------------
                                                          1998         1997
                                                      ------------  -----------
         Note payable to original owners of EBS (a)   $    700,000  $ 1,500,000
         Notes payable to former owners of QCC 
         acquisitions (b)                                   50,000           --

         Note payable to Waterside (c)                   1,500,000           --
                                                      ------------  -----------
                                                         2,250,000    1,500,000

         Less current maturities                           350,000      300,000
                                                      ------------  -----------
                                                      $  1,900,000  $ 1,200,000
                                                      ============  ===========


         Principal payments through maturity are as follows:

              1999                                    $   350,000
     
              2000                                        400,000

              2001                                             --

              2002                                             --

              2003                                      1,500,000


         a.       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 were due
                  and payable on the first day of January,  February,  March and
                  April  1997,   thereafter   principal   is  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. The note is secured
                  by a Stock Pledge Agreement and a Security Agreement. Under

                                      F-11

<PAGE>

                  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. The Company covenants and agrees to
                  use not less than twenty-five (25) percent of the net proceeds
                  from the sale by the Company of the Company's  common stock or
                  other  securities in any private  placement or public offering
                  occurring  after  the  date of the note  agreement  to pay the
                  indebtedness evidenced by the Note. Pursuant to this agreement
                  the Company paid $375,000  during the year ended  December 31,
                  1998.

                  In December  1997, in  connection  with the purchase of the 5%
                  minority interest of EBS the Company entered into a promissory
                  note  for  $100,000  payable  in four  equal  installments  of
                  $25,000  payable on the  fifteenth of each month from February
                  through May 1998.

         b.       In May  1998,  the  Company  acquired  all of the  outstanding
                  capital stock of Credit Bureau  Services,  Inc., EJG Services,
                  Inc., and Florida Credit Bureau, Inc. In connection with these
                  acquisitions,  the  Company  entered  into notes  payable  for
                  $100,000.  As of December 31, 1998,  the remaining  balance of
                  these notes was $50,000.

         c.       In October  1998,  the Company  entered  into a financing  and
                  investment   agreement  ("the  Agreement")  with  an  investor
                  ("Investor").  Under  the  Agreement  the  Investor  agreed to
                  purchase,  for  $1,500,000,  1,500  shares  of a new  class of
                  preferred  stock of the Company to be  classified  as Series C
                  Redeemable Preferred Stock.

                  At the time of the Agreement  the Company,  under Florida law,
                  was not allowed to issue preferred  stock. The Company and the
                  Investor  have agreed to enter into the Agreement on the basis
                  that  the  Company  will  take  all  measures  practicable  to
                  authorize and issue the preferred  stock on or before  January
                  15, 1999.  As security for the Investor  prior to the issuance
                  of the preferred  stock, the Company will execute a promissory
                  note for the full purchase price of the preferred stock.

                  Interest  at 14% per annum  will  accrue on the note  prior to
                  issuance of the preferred stock but will not be payable unless
                  the preferred  stock is issued after January 15, 1999. In that
                  case,  interest is payable  quarterly  commencing  January 15,
                  1999.

                  The note matures on October 15, 2003.

                  In connection with the Agreement, as amended, the Investor was
                  granted  a  warrant  to   purchase   500,000   shares  of  the
                  outstanding  common  stock on the date of  exercise on a fully
                  diluted basis. The exercise price is $.05 per share as amended
                  pursuant to the Waterside litigation discussed hereafter.

                                      F-12

<PAGE>

                  At any time  after  the  earlier  of a change in  control  (as
                  defined) or the date which is five years after the issuance of
                  the preferred stock, the Investor has the right to require the
                  Company to redeem all of the  shares of  preferred  stock at a
                  redemption price of $1,000 per share.

                  The terms of the Series C Preferred Stock is expected to be as
                  follows: (i) total number of Series C Preferred Stock issuable
                  will be 1,500  with a  liquidation  value of $1,000 per share,
                  (ii) such Series C Preferred Stock will be cumulative and bear
                  dividends  at a rate of  $125  per  share  or  12.5%  accruing
                  quarterly,  (iii)  unpaid  dividends  will accrue  interest at
                  12.5% compounded  annually,  (iv) certain capital transactions
                  of the Company will require consent of at least 66 2/3% of the
                  Series C Preferred Stockholders and (v) the Series C Preferred
                  Stockholders  have the right to elect one board  member at all
                  times.

7.       STOCKHOLDERS' EQUITY

         a.       In September  1995, the Company issued 100,000 shares of Class
                  A Convertible  Preferred  Stock to its former  Chairman with a
                  par value of $1.00.  In March  1997,  the  Company  effected a
                  reverse  stock  split of the shares on a 1:10  basis,  thereby
                  reducing he number of shares to 10,000.  The Class A Preferred
                  has the following features:  (1) voting - 500 votes per share,
                  (2)  convertible  into 1,500,000  shares of common stock until
                  March 27, 1998 and convertible into 1,000,000 shares of common
                  stock  thereafter,  (3) holder has a special vote to appoint a
                  majority of the members of the Board of Directors for a period
                  of three years from the date of issue. The stock does not bear
                  any  dividends.  The former  Chairman  converted the preferred
                  stock into 1,500,000 shares of common stock on March 27, 1998.

         b.       In December 1996, the Company sold for $300,000, 75,000 shares
                  of Class B, $1.00 par value  convertible  preferred stock. The
                  shares paid  cumulative  dividends  at the rate of 8% per year
                  and were convertible into 1,500,000 shares of common stock. In
                  May 1997, all such shares were converted into 1,500,000 shares
                  of common stock.

         c.       In January 1997,  the Company  issued 500,000 shares of common
                  stock for consulting services. The stock was valued at $69,000
                  and is being  amortized  over 5 years  resulting  in an annual
                  non-cash   charge  to  income  of   $13,800.   The   remaining
                  unamortized  balance  at  December  31,  1998  of  $41,400  is
                  recorded as deferred compensation.

         d.       In April 1997, pursuant to stock subscription agreements,  the
                  President  of the Company and the wife of the former  Chairman
                  subscribed  to  2,333,000  shares of common  stock for a total
                  value of $768,700.  As of March 10, 1998,  the amount was paid
                  in full by the  President.  At December 31, 1998,  the balance
                  due  from the  wife of the  former  Chairman  of  $25,000  was
                  charged to compensation.

                                      F-13

<PAGE>

         e.       During 1997,  the Company sold 224,250  shares of common stock
                  for a total value of $112,250.

         f.       In July 1997,  the  Company  purchased  500,000  shares of the
                  Company's  common stock from the  original  sellers of EBS for
                  $233,000.  In  December  1997,  the Company  purchased  50,000
                  shares of common  stock on the open  market for  $45,583.  All
                  said shares have been retired, and accordingly, the costs have
                  been charged against additional paid-in capital.

         g.       In July 1997,  the  Company  issued  150,000  shares of common
                  stock to two consultants. The stock was valued at $105,000 and
                  is being  amortized over 1 year resulting in a non-cash charge
                  to  income of  $52,500.  At  December  31,  1998  there was no
                  remaining unamortized balance.

         h.       In December 1997,  the Company  entered into an agreement with
                  the individuals representing the minority interest of EBS. The
                  agreement  provides  for  Triangle  to purchase  the  minority
                  interest of EBS in exchange  75,000 shares of common stock and
                  a note payable for $100,000.

         i.       During 1997,  the Company issued 33,200 shares of common stock
                  to various employees and consultants for services resulting in
                  a non-cash charge to income of $17,098.

         j.       In December  1997, the Company issued 675,000 stock options to
                  a consulting  firm which  provides  management  and consulting
                  services.  The  options  range in price from  $0.625 to $3.50.
                  Such options expire between June 1998 and December 2001.  Such
                  options  were valued at $50,000,  the fair market value on the
                  date of  grant.  Such  costs  will be  accrued  as  consulting
                  expense  over the  period  for which  services  are  provided.
                  During 1998, the total value of $50,000 was expensed resulting
                  in a  non-cash  charge  to  income.  On April  13,  1998,  the
                  consulting firm exercised 75,000 of such options  resulting in
                  the issuance of 75,000  shares of common stock and the Company
                  receiving proceeds of $46,875. On August 21, 1998, the Company
                  canceled the balance of 600,000 options.

         k.       During  1998,  several  individuals  exercised  stock  options
                  resulting  in the  issuance of 495,000  shares of common stock
                  and the Company receiving proceeds of $144,375.

         l.       During  1998,  the Company  made  several  acquisitions  which
                  resulted in the  issuance of 900,000  shares of common  stock.
                  These  shares were  valued at their fair  market  value at the
                  time of negotiation.  In September 1998, the Company rescinded
                  one of the acquired companies transaction and discontinued its
                  operations resulting in the cancellation of 270,000 shares.

                                      F-14

<PAGE>

         m.       In April 1998,  22,642  shares of common stock were issued for
                  services resulting in a non-cash charge to income of $24,000.

         n.       In March 1998, the Company  repurchased 5,500 shares of common
                  stock on the open  market for  $10,643.  Such shares have been
                  retired and, accordingly,  the costs have been charged against
                  additional paid-in-capital.

         o.       During 1998,  the Company sold 876,220  shares of common stock
                  for a total value of $1,484,065.

         p.       Through  March 26, 1999,  the Company  sold 441,183  shares of
                  common stock for a total value of $441,183.

8.       INCOME TAXES

                  The Company  accounts for income taxes under the provisions of
         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, 1998,
         the Company had net  deferred tax assets of  approximately  $2,410,000.
         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, 1998:

                  Temporary difference - liability         $     (118,000)

                  Net operating loss carryforward - asset       2,528,000

                  Valuation allowance                          (2,410,000)
                                                           --------------
                                                           $           --
                                                           ==============

                  The income tax provision consisted of the following:

                                            Year Ended December 31,
                                            -----------------------
                                              1998         1997
                                            --------     ----------
                  Deferred                  $226,000     $(226,000)
                                            ========     ==========

                                      F-15

<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,
                                                  ------------------------
                                                     1998          1997
                                                  -----------   ----------
         Income tax (benefit) computed
           at statutory rate                      $(1,800,000)  $  287,000
         State tax                                         --       41,000
         Effect of permanent differences             (425,000)      74,000
         Tax benefit not recognized                 2,225,000           --
         Valuation adjustment                         226,000           --
         Tax benefit recognized                            --     (628,000)
                                                  -----------   ---------- 
         Provision for income taxes (benefit)     $   226,000   $ (226,000)
                                                  ===========   ========== 

                  The  Company  has net  operating  loss  carryforwards  for tax
         purposes  totaling  approximately   $7,200,000  at  December  31,  1998
         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 April 1997 the  Company  triggered  a
         section  382  net  operating  loss  limitation  on the  cumulative  net
         operating loss carryforwards.  Utilization of such net operating losses
         are limited to $650,000 per annum.

9.       COMMITMENTS

         a.       The Company leases office space under a  non-cancelable  lease
                  expiring in February  2009.  The future  minimum rent payments
                  under this lease for the next five years are as follows:

                  1999                                         $191,000
                  2000                                          251,000
                  2001                                          251,000
                  2002                                          251,000
                  2003                                          251,000
                  -----------------------------------------------------

                                      F-16

<PAGE>

                  Rent expense was $173,395 for the year ended December 31, 1998
                  and $79,869 for the year ended December 31, 1997.

         b.       The Company has an  employment  agreement  with one officer of
                  the Company.  The agreement  expires in January 2000.  Minimum
                  commitments under this agreement are as follows:

                  1999                                         $156,000
                  2000                                           13,000

                  The agreement  also  provides for  incentive  bonuses based on
                  profit  criteria  and the  payment  of  various  expenses.  In
                  addition, the agreement entitles the officer to receive 10% of
                  the outstanding stock of EBS.

                  ThePresident's  options to  purchase  10% of the shares of EBS
                  have been valued at $136,850. Such amount has been recorded as
                  deferred compensation and is being amortized over 5 years. The
                  current  year's  non-cash  imputed  compensation  expense as a
                  result of this amortization was $27,380.

                  On April 14, 1998,  the  employment  agreement  was amended to
                  grant options to purchase 10% of QCC for $10. No  compensation
                  has been  recorded  since QCC was  merely a shell  company  in
                  April 1998.

10.      ACQUISITIONS

         a.       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.  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 summarized this acquisition:

                  Purchase Price, including acquisition costs     $  2,620,915

                  Liabilities assumed                                  454,159

                  Assets acquired                                   (1,146,561)
                                                                  ------------
                  Goodwill                                        $  1,928,513
                                                                  ============

                                      F-17

<PAGE>

                  In  December  1997,  the  Company  purchased  the 5%  minority
                  interest of EBS for 75,000  shares of common  stock and a note
                  payable for $100,000.  The common stock was valued at its fair
                  market  value on the date of the  agreement.  The  total  cost
                  $153,250 was recorded as additional goodwill.

         b.       In May  1998,  the  Company  acquired  all of the  outstanding
                  capital stock of Credit Bureau  Services,  Inc.  ("CBS"),  EJG
                  Services,  Inc. ("EJG"),  Florida Credit Bureau, Inc. ("FCB"),
                  Multitask   Computer   Systems,   Inc.   and  Trimax   Systems
                  Corporation.  These companies were acquired by the Company for
                  an aggregate of (i) $250,000 in immediately  available  funds,
                  (ii) promissory notes in the principal amount of $100,000, and
                  (iii) 900,000 restricted shares of the Company's common stock.
                  The  acquisition of these companies have been accounted for as
                  a  purchase   and   accordingly,   the  assets   required  and
                  liabilities assumed have been recorded at their estimated fair
                  values which  approximates  book value.  The purchase  prices,
                  including  acquisition  costs, less the companies' book values
                  totaled $1,876,101 which was recorded as goodwill and $850,968
                  of the recorded goodwill was subsequently written off in 1998.

                  The results of operations  for CBS, FCB and EJG from the dates
                  of  acquisition  to  December  31,  1998 are  included  in the
                  accompanying  consolidated  financial  statements for the year
                  ended December 31, 1998.

                  The  following  schedule  combines  the  unaudited  pro  forma
                  results of  operations  of the Company and these  acquisitions
                  for the  years  ended  December  31,  1998  and 1997 as if the
                  acquisition  had occurred on January 1, 1997 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, 1997.

                                                    Year Ended December 31,
                                                  ---------------------------
                                                     1998            1997
                                                  -----------     -----------
                  Net sales                       $ 8,261,120     $ 7,371,915

                  Net income                      $(5,095,630)    $ 1,150,441

                  Net income per share:

                       Basic                      $      (.42)    $       .13

                       Diluted                    $      (.42)    $       .10

                       Basic                       12,166,431       8,719,044

                       Diluted                     12,166,431      11,636,700

                  Shares used in computation:
                  -----------------------------------------------------------

                                      F-18

<PAGE>


11.      STOCK OPTIONS

                  In September  1997, the Company adopted two stock option plans
         authorizing  the  issuance of options  covering  900,000  shares of the
         Company's  common  stock.   Officers  and  Directors  are  eligible  to
         participate  in the Officers and  Directors  Stock Option Plan covering
         600,000  shares while key employees are eligible to  participate in the
         Employee Stock Option Plan covering  300,000  shares.  During 1998, the
         Company  amended such Plans to increase the number of options  issuable
         under each plan to be 350,000 for the Employee  Stock  Options Plan and
         2,100,000   for  the   Officers  and   Directors   Stock  Option  Plan.
         Participants  receive  incentive  stock  options  pursuant to the Plan.
         Options  granted under the Employee  Stock Option Plan are  exercisable
         for a period of not more than ten years from the inception of the Plan.
         Options  granted under the Officers and Directors Stock Option Plan are
         exercisable for a period of not more than five years from the inception
         of  the  Plan.   Selection  of   participants,   allotment  of  shares,
         determination of exercise price and other conditions of the granting of
         options  will be  determined  by the  Company.  Additionally,  the Plan
         provides  that no options may be issued at an  exercise  price which is
         less than the fair market  value of the  Company's  common stock on the
         date of grant.

                  The Company has outstanding stock options as follows:

                                     Plan Options           Non-Plan Options
                                ----------------------   -----------------------
         Outstanding at
           December 31,1997       680,000  $      .875   2,850,000   $ .05-$3.50

         Option grants          1,957,000  $1.25-$4.25          --            --

         Option cancellations    (240,000) $      .875  (1,745,000)  $ .2-$3.625

         Option expirations            --           --    (200,000)  $       .20

         Option exercises         (20,000) $      .875    (550,000)  $  .2-$.625
                                ----------------------   -----------------------
           Outstanding at 
             December 31, 1998  2,377,000  $.875-$4.25     355,000   $.05-$3.625
                                ======================   =======================

                  At December 31, 1998, all of the 355,000  Non-Plan options and
         2,377,000 Plan options were immediately exercisable.


                                      F-19

<PAGE>

                  On March 10,  1999,  the  Board of  Directors  of the  Company
         adopted  a 1999  Incentive  Stock  Plan,  ("the  1999  Plan"),  whereby
         4,000,000  shares of common stock have been reserved for issuance under
         the 1999  Plan.  Stock  options  issued  under  the 1999  Plan are also
         expected to have limited  stock  appreciation  rights,  "LSAR".  A LSAR
         entitles  the holder to receive  within 60 days  following  a change in
         control an amount equal to the difference between the exercise price of
         the  stock  option  and the  market  value of the  common  stock on the
         effective date of the change in control.

12.      ACCOUNTING FOR EMPLOYEE STOCK OPTIONS

                  In fiscal 1996, the Company adopted the disclosure  provisions
         SFAS No. 123, "Accounting for Stock-Based Compensation". For disclosure
         purposes,  the fair value of options is  estimated on the date of grant
         using  the  Black-Scholes  option  pricing  model  with  the  following
         weighted average  assumptions used for stock options granted during the
         years  ended  December  31,  1998 and  1997:  annual  dividends  of $0;
         expected volatility of 50%; risk- free interest rate of 7% and expected
         life of five years.  The weighted  average fair value of stock  options
         granted  during the years ended December 31, 1998 and 1997 was $.73 and
         $.37, respectively. If the Company had recognized compensation cost for
         stock options in accordance  with SFAS No. 123, the Company's  proforma
         net  income  (loss) and net  income  (loss)  per share  would have been
         ($5,726,003)  and ($.48) per share for the fiscal  year ended  December
         31,  1998 and  $522,378  and $.06 per share for the  fiscal  year ended
         December 31, 1997.

13.      WRITE-OFF UNEARNED COMPENSATION

                  In  February  1999,  the  Company  terminated  its  employment
         agreement  with the Company's  Chairman/CEO.  Accordingly,  the Company
         wrote off the balance of deferred  compensation  of $82,090  associated
         with the future services required under his employment agreement.  Such
         amount has been included in non-cash imputed  compensation  expense for
         the year ended December 31, 1998.

14.      COMMON STOCK SUBJECT TO PUT

                  In connection with the 1998  acquisitions of CBS, FCB and EJG,
         495,000  shares of common  stock  issued are  subject  to the  seller's
         ability to require the Company to  repurchase  such shares for a one to
         three year period for $1,485,000.

                  The  common  stock  subject  to the puts  allows the holder of
         these puts to require the Company to purchase their common stock during
         the  following  periods of time:  (i) 50,000 shares of common stock for
         $150,000 during the period of May 1999 to May 2000, (ii) 245,000 shares
         of common stock for $735,000  during the period of May 2000 to May 2001
         and (iii) 200,000 shares of common stock for $600,000 during the period
         of January 1, 2001 to January 1, 2002.

                                      F-20

<PAGE>

15.      WRITE-OFF OF GOODWILL

                  Goodwill arose in connection  with the acquisition of CBS, FCB
         and EJG. The goodwill is being  amortized on a straight line basis over
         a period  of 20  years.  In  1998,  the  Company,  under  Statement  of
         Financial  Accounting  Standards  (SFAS) No. 121,  "Accounting  for the
         Impairment  of  Long-Lived  Assets  and  for  Long-Lived  Assets  to be
         Disposed",  evaluated the recoverability of the goodwill of CBS and EJG
         by determining  whether the  amortization of the goodwill  balance over
         its  remaining  life can be recovered  through  projected  undiscounted
         future cash flows. As a result of such evaluation, the Company recorded
         a charge of $850,968 against this goodwill.

16.      DISCONTINUED OPERATIONS

                  On May 29,  1998,  the Company  acquired  100% of the stock of
         Trimax Systems Corp. and Multitask Corp. for 270,000 and 135,000 shares
         of the Company's common stock, respectively.  The total purchase price,
         including  acquisition  costs,  was  $565,133  which  was  recorded  as
         goodwill.  In  September  and  December  1998,  the Company  decided to
         discontinue the operations of Trimax and Multitask,  respectively.  The
         270,000   shares  of  common  stock  issued  in  connection   with  the
         acquisition of Trimax were canceled.  The remaining goodwill,  advances
         to and costs incurred  relating to these  transactions were written off
         and shown separately as "discontinued operations".

                  Revenues of the  discontinued  companies  were  $1,220,350 for
         1998.

17.      FOURTH QUARTER ADJUSTMENTS (UNAUDITED)

                  The following  adjustments  were made in the fourth quarter of
         the year ended December 31, 1998:

         Additional accounts receivable bad debt write-offs      $   275,000
                                                                 ===========
         Write off of goodwill                                   $   850,968
                                                                 ===========
         Restructuring expenses                                  $   174,000
                                                                 ===========
         Litigation expenses                                     $   547,000
                                                                 ===========
         Write off of deferred compensation expense              $    82,090
                                                                 ===========


                                      F-21

<PAGE>

18.      LEGAL PROCEEDINGS

                  The Company is a defendant  is one  lawsuit  styled  Thomas L.
         Bauer, et al v. Triangle Imaging Group, Inc., Vito a. Bellezza,  Judith
         Bellezza  a/k/a Judith  Klotz,  Peter  Bellezza and Franz Fideli in the
         Circuit Court of the 17th Judicial  Circuit in and for Broward  county,
         Florida  filed in  December  1998 by in excess  of 25 of the  Company's
         shareholders (the "Shareholder Litigation"). The Shareholder Litigation
         alleges, among other things, breaches of fiduciary duty,  self-dealing,
         stock  manipulation and insider trading by Mr. Bellezza,  the Company's
         former Chief  Executive  Officer and Chairman of the Board.  In general
         the  allegations  assert  that Mr.  Bellezza  engaged in trading in the
         Company's  common stock for his own benefit through an off-shore entity
         at a time when Mr. Bellezza was also allegedly engaged, through the use
         of a third-party stock promoter, in the unlawful upward manipulation of
         the trading price of the Company's  common stock.  The lawsuit  further
         alleges   certain  claims  against  Judith  Bellezza  for  her  alleged
         participation in Mr.  Bellezza's  complained of activities,  as well as
         claims against Franz Fideli and Peter Bellezza arising from the failure
         to discharge  their  fiduciary  duties as directors of the Company when
         presented  with  the  allegations   against  Mr.  Bellezza  and  Judith
         Bellezza.

                  On November 20, 1998, the Company retained the Special Counsel
         (a law firm  specializing  in corporate and securities laws matters) to
         act as independent  investigator  with respect to the allegations later
         raised in the Shareholder Litigation for the purpose of determining the
         validity of such allegations.  The Special Counsel delivered its report
         (the "Special  Counsel  Report") dated February 12, 1999 to the Company
         outlining the conclusion of the Special Counsel based upon a review and
         analysis of certain corporate  documents and certain stock transfer and
         trading  records.  The  Company's  litigation  counsel has reviewed the
         Special  Counsel  Report and will advise the  Company on the  Company's
         defenses to the claims  raised  against the Company in the  Shareholder
         Litigation  and whether the Company should pursue  separate  litigation
         against Mr. Bellezza, Judith Bellezza, Peter Bellezza and Franz Fideli.
         At this time,  it is  uncertain  whether the  Company  will pursue such
         separate litigation and what course the Shareholder Litigation may take
         or the outcome of such litigation.

                  In  addition  to the  foregoing,  in January  1999,  Waterside
         Capital  Corporation  ("Waterside") filed a lawsuit against the Company
         (the "Waterside Litigation") based upon alleged defaults by the Company
         under a promissory note in the original principal amount of $1,500,000,
         dated October 15, 1998, and alleged  breaches of contract under certain
         related  investment  agreements.  The Company and  Waterside  reached a
         settlement  of the  litigation  pursuant to which the Company  repriced
         certain stock purchase warrants granted to Waterside at the time of the
         closing of  Waterside's  investment  in the  Company.  Pursuant  to the
         settlement,  the purchase price for the shares  underlying the warrants
         was reduced  from a range of $2.15 per share to $3.00 per share down to
         $.05  per  share.  In  exchange  for  the  repricing  of the  warrants,
         Waterside  dismissed  the  Waterside  Litigation  and  delivered to the
         Company  a  contingent  general  release.  The  release  provides  that
         Waterside  cannot  refile the lawsuit with the same claims set forth in
         the Waterside  Litigation  unless certain members of management  and/or
         members of the Company's Board fail to remain in such positions through
         the date of the second annual  meeting of  shareholders  held after the
         date of the settlement.

                                      F-22

<PAGE>

                  It is  anticipated  that  litigation  may also result from the
         recission of the TriMax  acquisition in September 1998. Counsel for the
         former shareholders of TriMax has demanded payment pursuantto the terms
         of each of the consulting  agreements  entered into between the Company
         and each of the former TriMax shareholders incident to the recission of
         the  acquisition  of all of the  outstanding  shares  of  TriMax by the
         Company.  As a consequence  of, among other factors,  the  relationship
         between the  Company's  former  Chairman and each of the former  TriMax
         shareholders, based upon the results independent investigation and as a
         result of the fact that neither of the former TriMax  shareholders  has
         provided any services to the Company under their respective  consulting
         agreements,  the Company has canceled the  consulting  agreements  with
         each such individual.  Counsel for the former shareholders has likewise
         demanded the right to exercise the stock options purportedly granted to
         each of the former TriMax shareholders by the Company's former Chairman
         after the  recission  which right of exercise the Company has suspended
         and is currently reviewing.

                  The  Company  has  accrued  $320,000  for legal  services  and
         settlement costs with regard to the  aforementioned  as of December 31,
         1998.


                                      F-23

<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:   Fort Lauderdale, Florida
April 28, 1999

                                        TRIANGLE IMAGING GROUP, INC.

                                        By: /s/ HAROLD S. FISCHER
                                            -----------------------------------
                                                Harold S. Fischer
                                                President and Director


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

SIGNATURE                         TITLE                           DATE


/s/HAROLD S. FISCHER              President and Director          April 28, 1999
---------------------------
Harold S. Fischer


/s/GREG J. SEMINACK               Vice President-Finance          April 28, 1999
---------------------------       (Chief Accounting Officer)
Greg J. Seminack


/s/CHARLES D. WINSLOW             Chairman of the Board           April 28, 1999
---------------------------
Charles D. Winslow


/s/J. ALAN LINDAUER               Director                        April 28, 1999
---------------------------
J. Alan Lindauer