U. S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
                                   (Mark One)

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

FOR THE EIGHT FISCAL YEARS ENDED OCTOBER 31, 1998

[ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 ( NO FEE REQUIRED)

     For the transition period from __________________ to _________________

Commission File No.  2-68701

                          TECHSCIENCE INDUSTRIES, INC.
                 -----------------------------------------------
                 (Name of Small Business Issuer in its charter)

             Delaware                                     22-2298015 
   -------------------------------                 ------------------------
   (State or other jurisdiction of                    (I.R.S.  Employer
   incorporation  or organization)                 Identification   Number)

3 ROCKAWAY PLACE, PARSIPPANY, NEW JERSEY                    07054
----------------------------------------                    -----
(Address of Principal Executive Offices)                  (Zip Code)

                                 (903) 263-8951
                 -----------------------------------------------
                 (Issuer's Telephone Number Including Area Code)

        Securities registered pursuant to Section 12(b) of the Act: None

        Securities registered pursuant to Section 12(g) of the Act: None

         Check whether the Issuer (1) has filed all reports required to be filed
by  Section  13 or 15(d) of the  Exchange  Act during the past 12 months (or for
such shorter  period that the  registration  was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.

<PAGE>


                                 YES [ ]  NO [X]


         Check if there is no  disclosure  of  delinquent  filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained,  to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. 9

         State issuer's revenues for its most recent fiscal year. None

         State  the  aggregate   market  value  of  the  voting  stock  held  by
non-affiliates  computed by  reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days. None

                   ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                           DURING THE PAST FIVE YEARS

     Check whether the issuer has filed all documents and reports required to be
filed by Section  12,13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court.

                                 Yes [ ] No [X]

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest practicable date.

                 COMMON STOCK, $.01 PAR VALUE, 10,000,000 SHARES


                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

                                       2
<PAGE>


                                     PART I

ITEM 1.  BUSINESS

     (a) Business Development

         The Registrant was  incorporated  in Delaware in 1978.  Until 1991, the
Registrant  was a development  stage entity that sought,  through a wholly owned
subsidiary,  to become  engaged  in the  conversion  of  municipal  solid  waste
material into compost and  recyclable by means of a  proprietary  process.  From
1991,  through November 28, 1995, the Registrant was dormant with no operations.
During this period, the Registrant was  disenfranchised by the State of Delaware
for non-payment of franchise taxes.

         On November 30, 1995,  and  pursuant to the terms and  conditions  of a
written  agreement of even date  therewith  (the "Gift  Agreement"),  Mr. Joseph
Hafesh, a principal stockholder of the Registrant and a former executive officer
and  director  thereof who  resigned on August 25,  1993  ("Hafesh"),  gifted an
aggregate of 1,889,000 issued and outstanding shares of the Registrant's  Common
Stock,  $.01 par value per share (the "Gift  Shares")  to  Anthony  Bertuzzi,  a
non-affiliated  individual (the "Donee"). No market existed for the Common Stock
of the Registrant since 1991 and no market exists as of the date of this Report.
As of November 30, 1995, the Gift Shares  represented  approximately  38% of the
Registrant's issued and outstanding Common Stock capitalization.  As of the date
of this Report, the Gift Shares represent  approximately 19% of the Registrant's
issued and outstanding Common Stock capitalization.

In the Gift  Agreement,  Hafesh declared his intent and desire to divest himself
of any and potential  duty and/or  obligation to report the nature and extent of
his  ownership of the Gift Shares under the Federal  securities  laws.  The Gift
Agreement was executed simultaneously and in conjunction with the Assignment and
Assumption  Agreement  (as  hereinafter  defined).  The Donee made the customary
investment representations to Hafesh.

On November 30,  1995,  and  pursuant to the terms and  conditions  of a written
agreement  of even  date  therewith  between  the  Registrant  and  Hafesh  (the
"Assignment and Assumption Agreement"), the Registrant transferred and delivered
to Hafesh certificate No.19 representing 4,740,000 issued and outstanding shares
of Common  Stock,  $.01 par value per share (the  "Biocomp  Shares") of Biocomp,
Inc., a Delaware corporation that until January 1993 was wholly owned subsidiary
of the Registrant ("Biocomp").  In addition, the Registrant paid an aggregate of
$75,000 to Hafesh  (the "Cash  Payment").  The  Biocomp  Shares  represented  an
approximate 10% equity interest in Biocomp on November 30, 1995.

In  consideration  for the  Biocomp  Shares and the Cash  Payment,  Hafesh  took
possession,  assumed all duties and obligations with respect to and released the
Registrant  from:  (i) an  aggregate  of  $259,500  of debts and  obligation  of
Biocomp, as reflected on the Registrant's unaudited financial statements for the
nine months  ended July 31, 1991  contained  in its 

                                       3

<PAGE>

Form 10-Q Quarterly  Report filed with the  Securities and Exchange  Commission;
and (ii) an aggregate of $208,333 of debts and  obligation  of Biocomp  incurred
during the  period  August 1, 1991  through  August  26,  1993,  the last day of
operations  thereof,  and not  reflected on the  Company's  unaudited  financial
statements; or a total of $467,833 (the "Obligations").

In the  Assignment and  Assumption  Agreement,  and in addition to the customary
representations  and  warranties,  the  Registrant  indemnified  and held Hafesh
harmless from and against any and all costs and expenses,  including  reasonable
attorney's  fees,  attendant  upon: (i) any third party claiming any interest in
the Biocomp Shares;  and (ii) the first $12,500 in liabilities  remaining in the
Registrant after the removal of the Obligations. Hafesh, by virtue of his former
position as President and Chief Executive Officer of the Registrant, indemnified
and  held the  Registrant  harmless  from  and  against  any and all  costs  and
expenses,  including  reasonable  attorney's fees,  attendant upon the debts and
obligations of Biocomp in excess of the amount of the Obligations as well as the
liabilities of the Registrant in excess of the aforesaid $12,500.

On various dates  between  November 28, 1995 and June 16, 1996,  the  Registrant
sold an  aggregate  of 4,700,000  authorized  but unissued  shares of its Common
Stock,  $.01 par value per share (the "Placement  Shares") to 16  non-affiliated
individuals in  consideration  for an aggregate of $94,000 or $.02 per Placement
Share. In addition, and on November 29, 1995, the Registrant issued an aggregate
of 182,250 shares to a non-affiliated  investor in  consideration  for a $50,000
short term working capital loan to the Registrant.  The loan, evidenced by a six
month written  promissory noted dated November 29, 1995, was repaid prior to its
due date together with interest of $2,500.

         (b) Business of Issuer

         The Registrant's  business is confined to bringing its periodic reports
required to be filed under the  Securities  Exchange Act of 1934 current and the
active pursuit of a business combination partner. In connection  therewith,  and
during the eight fiscal years ended  October 31, 1998,  none of the  information
required to be disclosed and enumerated in paragraphs  (b)(1) through (b)(11) of
Item 101 of Regulation S-B was applicable to the Registrant or its business.

         The  Registrant   does  not  employ  any  full  time   employees.   The
Registrant's  two executive  officers and  directors  and a third  director only
devote such percentage of their respective time and attention to the business of
the Registrant as is required.

ITEM 2.  DESCRIPTION OF PROPERTY

         (a) During the eight fiscal years ended October 31, 1998 the Registrant
did not maintain any offices or own any property.  Since  November 30, 1995, the
Registrant  maintains  its  temporary  executive  offices at 3  Rockaway  Place,
Parsippany,  New Jersey 07054 where  approximately  200 square feet of space was
subleased rent free from James 

                                       4

<PAGE>
T. Woll,  the  Registrant's  President  on a month to month  basis  without  the
benefit of a written sublease.

ITEM 3.  LEGAL PROCEEDINGS

         During the eight fiscal years ended October 31, 1998, no material legal
proceeding were pending or threatened against or settled by the Registrant.

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

         During the eight fiscal years ended  October 31, 1998,  the  Registrant
did not conduct any annual meetings of stockholders.

                                     PART II

ITEM 5.  MARKET FOR COMMON STOCK EQUITY AND  RELATED STOCKHOLDER MATTERS.

         (a) Market  Information.  The  principal  market  for the  Registrant's
Common  Stock,  its only  class of equity  securities,  is the  over-the-counter
market. However, and during the eight fiscal years ended October 31, 1998, there
has been no market for the Registrant's Common Stock, and no market exists as of
the date of this Report.

         (b) Holders.

         As of October 31, 1998, the approximate  number of holders of record of
shares  of  the  Registrant's   Common  Stock,$.01  par  value  per  share,  the
Registrant's only class of publicly owned securities, was believed by management
to be 530.

Management  further  believes there are many  shareholders  whose securities are
held in street name with various brokerage  houses.  The exact number is unknown
to Registrant.

         (c) Dividends.

         The  Registrant  has paid no  dividends  during the eight  fiscal years
ended  October 31, 1998.  Other than the  requirements  of the Delaware  General
Corporation  Law that dividends be paid out of capital surplus only and that the
declaration and payment of a dividend not render the Registrant insolvent, there
are no  restrictions  on the  Registrant's  present  or  future  ability  to pay
dividends.

         The payment by the Registrant of dividends, if any, in the future rests
within the  discretion  of its Board of Directors  and will depend,  among other
things,  upon  the  Registrant's  earnings,  its  capital  requirements  and its
financial conditions, as well as other relevant factors.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         (a) Plan of Operation.  The  Registrant's  plan of action for the eight
fiscal  years ended  October 31,  1998,  during  which  period no revenues  from
operations were  generated,  was to complete the process of bring itself current
in its  periodic  reporting  obligations  under the  Securities  Exchange Act of
1934(the  "34 Act"),  preparing  for an annual  meeting of its  stockholders  as
required by the New Jersey  Business  Corporation  Act,  and  preparing  for the
filing of a Form 10-SB  Registration  Statement with a view towards  registering
its Common Stock under Section  12(g) of the 34 Act.  Ancillary to its principal
plan of  operations,  the  Registrant  sought to  continue  to pursue a business
combination with a profitable  privately owned company.  However,  and until the
Registrant  completed  the  process  of  bring  itself  current  in  its  34 Act
responsibilities,  it was expected that the  Registrant's  pursuit of a business
combination  partner was to be confined to searching for candidates and pursuing
preliminary conversations and negotiations.  It was expected that the Registrant
would be able to implement  its plan of  operations  without the raising of more
than the approximately  $25,000 of additional capital that management  estimated
it would cost to cover the fees and expenses of bringing the Registrant current.
It was similarly expected that the aforesaid $25,000 would be sufficient capital
to satisfy the Registrant's  capital  requirements  during the approximately six
months  management  estimated  it would  take to bring the  Registrant  current.
During the eight fiscal years ended October 31, 1998,  the  Registrant  did not:
(i) expend any funds on product  research or development;  (ii) purchase or plan
to purchase any plant or equipment; (iii) have any employees other than its part
time executive officers and directors.

                       SUPPLEMENTAL FINANCIAL INFORMATION

In  accordance  with  Regulation  229.302  (Item  302 of  Regulation  S-B),  the
following is a summary of the major  statement of  operations  categories of the
Registrant by quarter for the two fiscal years ended October 31, 1997 and 1998.

<TABLE>
<CAPTION>

                                                       LOSS BEFORE
                         NET            GROSS         EXTRAORDINARY        NET
                        SALES           PROFIT            ITEMS            LOSS
                       -----------------------------------------------------------
<S>                    <C>              <C>             <C>               <C>    
1ST QUARTER 1997       $  --            $ --            $    --           $    --

2ND QUARTER 1997          --              --             (4,707)           (4,707)

3RD QUARTER 1997          --              --             (3,545)           (3,545)

4TH QUARTER 1997          --              --                (45)              (45)
                       -----------------------------------------------------------

TOTAL 1997             $  --            $ --            $(8,297)          $(8,297)
                       ===========================================================



1ST QUARTER 1998       $  --            $ --            $   (45)          $   (45)

2ND QUARTER 1998          --              --                (45)              (45)

3RD QUARTER 1998          --              --                 --                --

4TH QUARTER 1998          --              --             (6,582)           (6,582)
                       -----------------------------------------------------------

TOTAL 1998             $  --            $ --            $(6,672)          $(6,672)
                       ===========================================================
</TABLE>

                                       5
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

         Financial statements meeting the requirements of Item 310 of Regulation
S-B, for the eight fiscal years ending  October 31, 1998 were prepared by Wiss &
Company LLP, and are annexed as a separate section to this Report.

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

         (a) During the eight fiscal years ended October 31,1998, the Registrant
did not experience a change of independent accountants.

         (b) That with respect to the financial statements of the Registrant for
the eight  fiscal  years ended  October 31,  1998,  there were no  disagreements
between the Registrant and any accountant on any matter of accounting principles
or practices,  financial  statement  disclosure  or auditing  scope or procedure
which  disagreements  if not  resolved to the  satisfaction  of the  accountants
involved  would have  caused them to make  reference  in  connection  with their
report to the subject matter of the disagreement.

                                        6

<PAGE>


                                    PART III

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


(a) Identify Directors And Executive Officers.

         The following  table sets forth:  (1) names and ages of all persons who
presently are and who have been selected as directors of the Registrant; (2) all
positions and offices with the Registrant held by each such person; (3) the term
or office of each person named as a director; and (4) any period during which he
or she has served a such:

                Duration and
                Expiration      Position &                  Age and
                Date of         Office with                 Director
Name            Present Term    Registrant                   Since
----            ------------    -----------                 --------

James T. Woll   Next Annual     President, Chief      53, November 30, 1995(1)
                Meeting of      Executive Officer
                Stockholders    and Director

Gary W. Gill    Next Annual     Chief Financial       43, November 30, 1995(1)
                Meeting of      Officer and Director
                Stockholders

James S. Gallo  Next Annual     Director              54, November 30, 1995(1)
                Meeting of
                Stockholders
--------------------

         (1) Joseph Hafesh resigned as President,  Chief  Financial  Officer and
Director of the Registrant on August 25, 1993.  William V. Breshlian resigned as
a Director of the  Registrant  on November 17, 1995 and Gary W. Gill was elected
in his place and stead to serve  until the next  annual  meeting of the Board of
Directors.  William  Steinberg  resigned  as a  Director  of the  Registrant  on
November  17, 1995 and James T. Woll was elected in his place and stead to serve
until the next annual meeting of the Board of Directors.  Thereafter, and on the
same day,  Messrs.  Gill and Woll  elected  James S. Gallo as a Director  of the
Registrant,  and elected Mr. Woll as President and Chief  executive  Officer and
Mr. Gill as Chief Financial Officer.

         There is no understanding  or arrangement  between any directors or any
other  person or  persons  pursuant  to which  such  individual  was or is to be
selected as a director or nominee of the Registrant.

         (4)  BUSINESS EXPERIENCE

                                       7
<PAGE>

         The  following is a brief  account of the  experience,  during the past
five years, of each director and executive officers of the Registrant:

JAMES T. WOLL, has been the Registrant's  President and Chief Executive  Officer
and a director since November 17, 1995. Simultaneously therewith and since 1987,
Mr.  Woll  has  been  a self  employed  insurance,  real  estate,  business  and
management consultant in Parsippany,  New Jersey.  Simultaneously therewith, and
from 1987 to 1993, Mr. Woll served as the president and Chief Executive  Officer
of A.T. Wall Street Inc., a registered New Jersey Broker Dealer.

GARY W.  GILL,  has been the  Chief  Financial  Officer  and a  director  of the
Registrant since November 17, 1995. Simultaneously therewith and since 1977, Mr.
Gill has been the  President of Gary W. Gill &  Associates,  a  Clarksboro,  New
Jersey  sole-proprietorship  engaged  in  offering  general  accounting  and tax
services to individuals,  firms and entities  located  primarily in the State of
New Jersey.  Mr. Gill received a Bachelor of Science  Degree in accounting  from
Bloomsburg State College in Bloomsburg, Pennsylvania in 1976.

JAMES S. GALLO,  has been a director of the Registrant  since November 17, 1995.
Simultaneously  therewith and since 1989,  Mr. Gallo has been self employed real
estate and  business  consultants  well as a builder of  commercial  real estate
projects in Sparta, New Jersey. Prior thereto since 1969, Mr. Gallo was the sole
stockholder and President of Gallo Catering,  Inc., a privately owned New Jersey
corporation engaged in the off-premises catering business which he sold in 1989.
Mr. Gallo is a licensed real estate broker in the State of New Jersey.

         (5)  DIRECTORSHIP

Each Director of the Registrant  has indicated to the Registrant  that he or she
is not a director in any other Registrant with a class of securities  registered
pursuant to Section 12 of the 34 Act or subject to the  requirements  of Section
15(d) of such act or any investment  Registrant  registered under the Investment
Registrant Act of 1940.

         (b) Identification of Certain Significant Employees

         The  Registrant  does not presently  employ any person as a significant
employee who is not an executive  officer but who makes or is expected to make a
significant contribution to the business of the Registrant.

         (c) Family Relationships

         No family relationship exist between any director or executive officers
of the Registrant.

         (d) Involvement in Certain Legal Proceedings

                                       8

<PAGE>


         No event listed in  Sub-paragraphs  (1) through (4) of Subparagraph (d)
of Item 401 of Regulation S-B, as occurred with respect to any present executive
officer or director of the  Registrant  or any nominee for  director  during the
past  five  years and which is  material  to an  evaluation  of the  ability  or
integrity of such director or officer.

ITEM 10. EXECUTIVE COMPENSATION.

         (a) GENERAL

         (1) through (9) ALL COMPENSATION COVERED. During the eight fiscal years
ended October 31,1998, no compensation was paid to, accrued or set aside for any
executive officer or director of the Registrant.

         (b) SUMMARY COMPENSATION TABLE.

During the eight fiscal years ended October 31,1998, no compensation of the type
required to be disclosed in this table was paid to, accrued or set aside for any
executive officer or director of the Registrant.

         (c) OPTION/SAR GRANT TABLE. During the eight fiscal years ended October
31,1998,  no grants of stock  options  or  freestanding  SAR's  were made by the
Registrant.

         (d) AGGREGATE  OPTION/SAR  EXERCISES  AND FISCAL  YEAR- END  OPTION/SAR
VALUE TABLE. No stock options or  freestanding  SAR's are issued or outstanding.
Accordingly,  and during the eight fiscal years ended October 31, 1998, no stock
options or freestanding SAR's were exercised.  Notwithstanding the foregoing, an
aggregate of 450,000 shares of the Registrant's Common Stock, $.01 par value per
share are reserved for issuance pursuant to the Registrant's long-term incentive
plan adopted by the Registrant's Board of Directors and stockholders in 1984.

         (e) LONG-TERM  INCENTIVE PLAN ("LTIP")  AWARDS TABLE.  During the eight
fiscal years ended October 31,1998, no LTIP awards were made by the Registrant.

         (f) COMPENSATION  OF  DIRECTORS.  (1) and (2).  During the eight fiscal
years  ended  October  31,1998,  no  director  of the  Registrant  received  any
compensation,   whether  pursuant  to  any  standard  or  other  arrangement  or
otherwise.

         (g) EMPLOYMENT  CONTRACTS AND TERMINATION OF EMPLOYMENT,  AND CHANGE-IN
CONTROL ARRANGEMENTS. (1) and (2). No executive officer, director or employee of
the Registrant is serving pursuant to the terms of a written employment or other
compensation agreement, understanding or arrangement with the Registrant; and no
such  agreement  was entered into during the eight  fiscal  years ended  October
31,1998.

                                       9

<PAGE>


         (h)  REPORT  ON  REPRICING  OF  OPTIONS/SAR'S.   No  stock  options  or
freestanding SAR's are issued or outstanding.  Accordingly, AND during the eight
fiscal years ended October 31,1998,  no stock options or freestanding SAR's were
repriced.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER. The information is furnished
as of October 31, 1998,  as to the number of shares of the  Registrant's  Common
Stock, $.01 par value per share owned beneficially or is known by the Registrant
to own beneficially more than 5% of any class of such security:

Name and Address                 Amount and Nature
of Beneficial                     of Beneficial
Owner                               Ownership                Percentage of Class
----------------                 -----------------           -------------------

Jean Appello
67 Hook Mountain Road
Montville, NJ 07045                  900,000                           9%

Anthony Bertuzzi
14 Hitchcock Ave.
Staten Island, NY 10306            1,736,200                          17%

Judy Cabrera
19 Colt Road
Franklin, MA 02038                   750,000                           7%

Joyce Cohen
3500 Mystic Point Drive
Tower 400, Apt. 3103
Aventura, FL 33180                   700,000                           7%

James T. Patten
460 Claremont Road
Bernardsville, NJ 07924              875,000                           9%

Ellen Rosenberg
Post Office Box 1223
Long Beach, NY 11561               1,127,800                          11%


(b) SECURITY OWNERSHIP OF MANAGEMENT. The information is furnished as of October
31, 1998, as to the number of shares of the Registrant's  Common Stock, $.01 par
value per share owned beneficially by each executive officer and director of the
Registrant and by all executive officers and directors as a group:

                                       10

<PAGE>


Name and Address                 Amount and Nature
of Beneficial                     of Beneficial
Owner                               Ownership                Percentage of Class
----------------                 -----------------           -------------------

James T. Woll                       100,000                             1%
3 Rockaway Place
Parsippany, NJ 07054

Gary W.Gill                         100,000                             1%
38 W. Wolfelt Station Rd.
Mickleton, NJ 08056

James S. Gallo                      100,000                             1%
173 Andover Road
Sparta, NJ 07871

All Officers and
Directors as a Group
(3 persons)                         300,000                             3%

         (c) CHANGES IN CONTROL.  As of the date of this Report,  the Registrant
has not entered into any agreements,  the operation of which may at a subsequent
date result in a change of control of the Registrant.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         (a)(b) During the eight fiscal years ended October 31, 1998, and except
as  enumerated  in Item 1a of this  Report no  officer,  director or relative or
spouse of the foregoing  persons or any relative of such person who has the same
home as such  person,  or is a  director  or  other  officer  of any  parent  or
subsidiary of the Registrant or any  shareholder  known by the Registrant to own
of record or beneficially more than five (5%) percent of the Registrant's Common
Stock,  had a  direct  or  indirect  material  interest  in any  transaction  or
presently proposed  transaction to which the Registrant or any of its parents or
subsidiaries was or is a party.

         (c) PARENTS.  Joseph  Hafesh,  the founder of the  Registrant and until
November  28,  1995 was the  record  and  beneficial  owner of an  aggregate  of
1,889,000 shares of the Registrant's  Common Stock, may be deemed to be a parent
of the Registrant.

         (d) TRANSACTIONS WITH PROMOTERS. Inapplicable.

ITEM 13.  EXHIBITS, LIST AND REPORTS ON  FORM 8-K

(a) Exhibits and Index Required.

(1) EXHIBIT INDEX

                                       11

<PAGE>


Description of Document                           Location
-----------------------                           --------

(1)  Underwriting Agreement                       Exhibit 1 filed with Form S-2
                                                  Registration Statement No.
                                                  2-68701, effective October 22,
                                                  1980

(2)  Plan of Acquisition, Reorganization,         N/A
     Arrangement, Liquidation, or Succession           

(3)  (i) Certificate of Incorporation             Exhibit 2-A filed with
                                                  Form S-2 Registration
                                                  Statement No. 2-68701,
                                                  effective October 22, 1980

(3)  (i)(a) Certificate of Amendment to           Exhibit 2-A1 filed with Form 
     Certificate of Incorporation                 S-2 Registration Statement No.
                                                  2-68701, effective October 22,
                                                  1980

(3)  (ii) By-Laws                                 Exhibit 2-B filed with Form
                                                  S-2 Registration Statement No.
                                                  2-68701, effective October 22,
                                                  1980

(4)  Instruments defining the
     rights of security holders,
     including indentures

     (a) Common Stock                             Exhibit 3 filed with  Form S-2
                                                  Registration Statement No. 
                                                  2-68701, effective October 22,
                                                  1980

     (b) Underwriters Common                      Exhibit 5 filed with  Form S-2
         Stock Purchase Warrant                   Registration Statement No.
                                                  2-68701, effective October 22,
                                                  1980

(5)  Opinion re: legality                         Exhibit 4 filed with  Form S-2
                                                  Registration Statement No.
                                                  2-68701, effective October 22,
                                                  1980

(10) Material Contracts,                          Filed herewith
     10 (a) Gift Agreement dated
     November 30, 1995                            

     10 (b) Assignment and Assumption             Filed herewith
     Agreement dated November 30, 1995

(11) Statement re: computation of                 N/A
     per share earnings                           

(12) No exhibit required

                                       12
<PAGE>

(13) Annual or quarterly reports,                 Filed concurrent with this
     Form 10-Q and Form 10-QSB                    report
       

(14) Material foreign patents                     N/A

(15) Letter on unaudited interim                  N/A
     financial information                        

(16) Letter on change in certifying               N/A
     accountants                                  

(17) Letter on director resignation               N/A

(18) Letter re changes in                         N/A
     accounting principles                        

(19) Reports furnished to                         N/A
     security holders                             

(20) Other documents or statements                N/A
     to security holders                          

(21) Subsidiaries of the Registrant               None
     as of October 31, 1998:                     

(22) Published report regarding                   N/A
     matters submitted to vote                    

(23) Consents to experts and counsel              Exhibit 4 filed with  Form S-2
                                                  Registration Statement No.
                                                  2-68701, effective October 22,
                                                  1980

(24) Power of Attorney                            N/A

(25) Statement of eligibility of trustee          N/A

(26) Invitations for competitive bids             N/A

(27) Financial data schedules                     Filed herewith

(28) Information  from  reports                   N/A
     furnished  to  State  insurance
     regulatory authorities                       

(99) Additional exhibits                          N/A

                                       13
<PAGE>

(b) Reports on Form 8-K.                          During the last quarter of the
                                                  Registrant's fiscal year ended
                                                  October 31,1998, no reports on
                                                  Form 8-K were prepared and 
                                                  filed by the Registrant.

                                       14
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


Board of Directors
Techscience Industries, Inc.


We have audited the  accompanying  consolidated  balance  sheets of  Techscience
Industries,  Inc. and subsidiaries  (Development  Stage Companies) as of October
31,  1998,  1997,  1996,  1995,  1994,  1993,  1992  and  1991  and the  related
consolidated   statements  of  operations,   changes  in  stockholders'   equity
(deficiency) and cash flows for the years then ended. 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 audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits 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 audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in  all  material  respects,  the  financial  position  of  Techscience
Industries,  Inc. and  subsidiaries at October 31, 1998, 1997, 1996, 1995, 1994,
1993,  1992 and 1991,  and the results of their  operations and their cash flows
for the years  then  ended in  conformity  with  generally  accepted  accounting
principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial statements,  the Company has suffered recurring losses from operations
and has a net capital  deficiency that raise substantial doubt about its ability
to continue as a going  concern.  Management's  plans in regard to these matters
are also  described  in Note 2. The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.



                                        WISS & COMPANY, LLP


Livingston, New Jersey
April 29, 1999

<PAGE>


                          TECHSCIENCE INDUSTRIES, INC.
                                AND SUBSIDIARIES
                          (DEVELOPMENT STAGE COMPANIES)

                              FINANCIAL STATEMENTS
                                OCTOBER 31, 1998




<PAGE>
                  TECHSCIENCE INDUSTRIES, INC. AND SUBSIDIARIES
                          (DEVELOPMENT STAGE COMPANIES)

                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                          OCTOBER 31,
                                                   --------------------------------------------------------  
                       ASSETS                           1991          1992          1993           1994      
                                                   -----------    -----------    -----------    -----------  

<S>                                                <C>            <C>            <C>            <C>          
CURRENT ASSETS -
  Cash                                             $    28,796    $     5,852    $        --    $        --  
                                                   ===========    ===========    ===========    ===========  

LIABILITIES AND STOCKHOLDERS' EQUITY
        (DEFICIENCY)

CURRENT LIABILITIES:
  Accounts payable and accrued expenses            $   296,999    $   396,999    $        --    $        --  
                                                   -----------    -----------    -----------    -----------  
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock, $.01 par value:
  authorized  20,000,000 shares
  issued and outstanding 794,840 at,
  October 31, 1991, 818,840 at October 31,
  1992, 1993, 1994 and 1995 and 1,600,000 at
  October 31, 1996, 1997 and 1998                        7,948          8,188          8,188          8,188  
Preferred stock, $.01 par value; authorized
  2,000,000 shares, none issued and outstanding             --             --             --             --  
Capital in excess of par value                       1,131,717      1,156,477      1,171,477      1,171,477  
Deficit accumulated during the development stage    (1,407,868)    (1,555,812)    (1,179,665)    (1,179,665) 
                                                   -----------    -----------    -----------    -----------  
    Total Stockholders' Equity (Deficiency)           (268,203)      (391,147)            --             --  
                                                   -----------    -----------    -----------    -----------  
                                                   $    28,796    $     5,852    $        --    $        --  
                                                   ===========    ===========    ===========    ===========  

</TABLE>
<TABLE>
<CAPTION>

                                                                        OCTOBER 31,
                                                  --------------------------------------------------------
                       ASSETS                        1995            1996          1997           1998
                                                  -----------    -----------    -----------    -----------

<S>                                               <C>            <C>            <C>            <C>        
CURRENT ASSETS -
  Cash                                            $        --    $     7,101    $     2,304    $     2,214
                                                  ===========    ===========    ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
        (DEFICIENCY)

CURRENT LIABILITIES:
  Accounts payable and accrued expenses           $        --    $        --    $     3,500    $    10,082
                                                  -----------    -----------    -----------    -----------
STOCKHOLDERS' EQUITY (DEFICIENCY):
Common stock, $.01 par value:
  authorized  20,000,000 shares
  issued and outstanding 794,840 at,
  October 31, 1991, 818,840 at October 31,
  1992, 1993, 1994 and 1995 and 1,600,000 at
  October 31, 1996, 1997 and 1998                       8,188         16,000         16,000         16,000
Preferred stock, $.01 par value; authorized
  2,000,000 shares, none issued and outstanding            --             --             --             --
Capital in excess of par value                      1,171,477      1,261,310      1,261,310      1,261,310
Deficit accumulated during the development stage   (1,179,665)    (1,270,209)    (1,178,506)    (1,285,178)
                                                  -----------    -----------    -----------    -----------
    Total Stockholders' Equity (Deficiency)                --          7,101         (1,196)        (7,868)
                                                  -----------    -----------    -----------    -----------
                                                  $        --    $     7,101    $     2,304    $     2,214
                                                  ===========    ===========    ===========    ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        F-2
<PAGE>

                  TECHSCIENCE INDUSTRIES, INC. AND SUBSIDIARIES
                          (DEVELOPMENT STAGE COMPANIES)

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                         Year Ended October 31,
                                                        ====================================================
                                                           1991           1992           1993         1994    
                                                        -----------    -----------    -----------    -------  
<S>                                                     <C>            <C>            <C>            <C>      
INTEREST INCOME                                         $        --    $        --    $        --    $    --  
RENT INCOME                                                      --             --             --         --  
OTHER INCOME                                                  4,012             --             --         --  
                                                        -----------    -----------    -----------    -------  
                                                              4,012             --             --         --  
                                                        -----------    -----------    -----------    -------  
COSTS AND EXPENSES:
    Compensation to officers                                180,777        100,000         19,271         --  
    Consulting fee to officer                                    --             --             --         --  
    Other salaries                                               --          3,123          1,783             
    Payroll taxes                                                --             --             --         --  
    Subcontractors                                            2,150          3,750          2,545         --  
    Rent                                                      9,600          7,675          3,800             
    Telephone and utilities                                     984          5,002          2,854         --  
    Repairs and maintenance                                      --            359            190         --  
    Insurance                                                 1,978          7,278          5,992             
    Travel and entertainment                                  7,697         12,504          2,804         --  
    Interest expense                                             --             --             --         --  
    Legal and professional fees                               4,148            930             --         --  
    Consulting fees                                          16,600             --             --             
    Office supplies and expense                               4,319          1,948            884         --  
    Dues and subscriptions                                       --          1,865             --         --  
    Miscellaneous and other                                   8,106          3,510             --             
    Taxes, other than income                                     --             --             --         --  
    Research and development                                     --             --             --         --  
    Depreciation and amortization                                --             --             --             
    Income taxes                                                 --             --             --         --  
    Minority interest in net loss of subsidiary                  --             --             --         --  
    Loss on disposal of assets                                9,000             --             --         --  
    (Gain) loss on deconsolidation of subsidiary                 --             --       (416,270)        --  
                                                        -----------    -----------    -----------    -------  
                                                            245,359        147,944       (376,147)        --  
                                                        -----------    -----------    -----------    -------  
INCOME (LOSS) FROM CONTINUING OPERATIONS                   (241,347)      (147,944)       376,147         --  
DISCONTINUED OPERATIONS:
    Equity in loss of General Fiber Optics, Inc.                 --             --             --             
    Gain on liquidation of General Fiber Optics, Inc.            --             --             --         --  
                                                        -----------    -----------    -----------    -------  
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM                    (241,347)      (147,944)       376,147         --  
TAX BENEFIT OF NET OPERATING LOSS CARRYFORWARD                   --             --             --         --  
                                                        -----------    -----------    -----------    -------  
NET INCOME (LOSS)                                       $  (241,347)   $  (147,944)   $   376,147    $    --  
                                                        ===========    ===========    ===========    =======  
WEIGHTED AVERAGE NUMBER
    OF COMMON SHARES OUTSTANDING                            794,840        818,840        818,840    818,840  
                                                        ===========    ===========    ===========    =======  
BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE   $       (.30)   $      (.18)   $       .46    $    --  
                                                        ===========    ===========    ===========    =======  
</TABLE>
<TABLE>
<CAPTION>
                                                                                                                 From Inception,
                                                                                                                  November 29,
                                                                          Year Ended October 31,                     1978 to
                                                        =======================================================    October 31,
                                                           1995          1996            1997         1998            1998
                                                        -----------   -----------    -----------    -----------  ---------------
<S>                                                     <C>           <C>            <C>            <C>            <C>         
INTEREST INCOME                                         $        --   $        --    $        --    $        --    $   686,293
RENT INCOME                                                      --            --             --             --         70,568
OTHER INCOME                                                     --            --             --             --          4,012
                                                        -----------   -----------    -----------    -----------    -----------
                                                                 --            --             --             --        760,873
                                                        -----------   -----------    -----------    -----------    -----------
COSTS AND EXPENSES:
    Compensation to officers                                     --            --             --             --      1,113,653
    Consulting fee to officer                                    --            --             --             --         19,500
    Other salaries                                               --            --             --             --        177,734
    Payroll taxes                                                --            --             --             --         77,266
    Subcontractors                                               --            --             --             --          8,445
    Rent                                                         --            --             --             --        132,781
    Telephone and utilities                                      --            --             --             --        161,486
    Repairs and maintenance                                      --            --             --             --            549
    Insurance                                                    --            --             --             --         15,248
    Travel and entertainment                                     --            --             --             --        170,654
    Interest expense                                             --         6,145             --             --          6,145
    Legal and professional fees                                  --         8,574          6,119          5,000        156,111
    Consulting fees                                              --            --             --             --        143,801
    Office supplies and expense                                  --            90             --             --         34,436
    Dues and subscriptions                                       --            --             --             --         23,401
    Miscellaneous and other                                      --           735          2,178          1,672        114,978
    Taxes, other than income                                     --            --             --             --         14,581
    Research and development                                     --            --             --             --          7,000
    Depreciation and amortization                                --            --             --             --         64,293
    Income taxes                                                 --            --             --             --         14,845
    Minority interest in net loss of subsidiary                  --            --             --             --        (22,717)
    Loss on disposal of assets                                   --            --             --             --          9,000
    (Gain) loss on deconsolidation of subsidiary                 --        75,000             --             --       (341,270)
                                                        -----------   -----------    -----------    -----------    -----------
                                                                 --        90,544          8,297          6,672      2,101,920
                                                        -----------   -----------    -----------    -----------    -----------
INCOME (LOSS) FROM CONTINUING OPERATIONS                         --       (90,544)        (8,297)        (6,672)    (1,341,047)
DISCONTINUED OPERATIONS:
    Equity in loss of General Fiber Optics, Inc.                 --            --             --             --        (44,910)
    Gain on liquidation of General Fiber Optics, Inc.            --            --             --             --         92,379
                                                        -----------   -----------    -----------    -----------    -----------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM                          --       (90,544)        (8,297)        (6,672)    (1,293,578)
TAX BENEFIT OF NET OPERATING LOSS CARRYFORWARD                   --            --             --             --          8,400
                                                        -----------   -----------    -----------    -----------    -----------
NET INCOME (LOSS)                                       $        --   $   (90,544)   $    (8,297)   $    (6,672)   $(1,285,178)
                                                        ===========   ===========    ===========    ===========    ===========
WEIGHTED AVERAGE NUMBER
    OF COMMON SHARES OUTSTANDING                            818,840     1,600,000     16,000,000      1,600,000
                                                        ===========   ===========    ===========    ===========
BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE    $        --   $      (.06)   $      (.01)   $        --
                                                        ===========   ===========    ===========    ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        F-3
<PAGE>

                  TECHSCIENCE INDUSTRIES, INC. AND SUBSIDIARIES
                          (DEVELOPMENT STAGE COMPANIES)

                      CONSOLIDATED STATEMENTS OF CHANGES IN
                        STOCKHOLDERS' EQUITY (DEFICIENCY)
<TABLE>
<CAPTION>
                                                                                                               Deficit
                                                                                                              Accumulated
                                               Consideration                Common Stock        Capital in    During the
                                            ------------------  -------------------------------  Excess of    Development
                                            Per Share   Total   Shares Issued  $(.01) Par Value  Par Value       Stage
                                            ---------  -------  -------------  ----------------  ----------   ------------
<S>                                         <C>        <C>          <C>                 <C>          <C>        <C>      
BALANCES, OCTOBER 31, 1990                                         730,840      $     7,308      $1,065,757   $(1,166,521)
YEAR ENDED OCTOBER 31, 1991:
  Issuance of common stock for
    consulting services                     $ 1.0375   $16,600      16,000              160          16,440            --
  Issuance of common stock for cash         $ 1.0375   $50,000      48,000              480          49,520            --
    Net loss                                                            --               --              --      (241,347)
                                                                 ---------      -----------      ----------   -----------
BALANCES, OCTOBER 31, 1991                                         794,840            7,948       1,131,717    (1,407,868)
YEAR ENDED OCTOBER 31, 1992:
  Issuance of common stock for cash         $ 1.0417   $25,000      24,000              240          24,760            --
  Net loss                                                              --               --              --      (147,944)
                                                                 ---------      -----------      ----------   -----------

BALANCES. OCTOBER 31, 1992                                         818,840            8,188       1,156,477    (1,555,812)
YEAR ENDED OCTOBER 31, 1993: 
  Capital contributed by officer                       $15,000          --               --          15,000            --
  Net income                                                            --               --              --       376,147
                                                                 ---------      -----------      ----------   -----------

BALANCE, OCTOBER 31, 1993, 1994 and 1995                           818,840            8,188       1,171,477    (1,179,665)
YEAR ENDED OCTOBER 31, 1996:
  Issuance of common stock for cash         $ 0.1250   $94,000     752,000            7,520          86,480            --
  Issuance of common stock for loan         $ 0.1250   $ 3,645      29,160              292           3,353            --
  Net loss                                                              --               --              --       (90,544)
                                                                 ---------      -----------      ----------   -----------
BALANCE, OCTOBER 31, 1996                                        1,600,000           16,000       1,261,310    (1,270,209)
YEAR ENDED OCTOBER 31, 1997:
  Net loss                                                              --               --              --        (8,297)
                                                                 ---------      -----------      ----------   -----------
BALANCE OCTOBER 31, 1997:                                        1,600,000           16,000       1,261,310    (1,278,506)
YEAR ENDED OCTOBER 31, 1998 -
  Net loss                                                              --               --              --        (6,672)
                                                                 =========      ===========      ==========   ===========
BALANCE, OCTOBER 31, 1998                                        1,600,000      $    16,000      $1,261,310   $(1,285,178)
                                                                 =========      ===========      ==========   ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        F-4
<PAGE>

                  TECHSCIENCE INDUSTRIES, INC. AND SUBSIDIARIES
                          (DEVELOPMENT STAGE COMPANIES)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                          Year Ended October 31,            
                                                     ---------------------------------------------------------- 
                                                        1991            1992           1993       1994    1995  
                                                     -----------    -----------    -----------    -----   ----- 

<S>                                                  <C>            <C>            <C>            <C>     <C>   
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                  $  (241,347)   $  (147,944)   $   376,147    $  --   $  -- 
  Adjustments to reconcile net loss to net cash
    flows from operating activities:
      Depreciation and amortization                           --             --             --       --      -- 
      Minority interest in dividends of subsidiary            --             --             --       --      -- 
      Loss on sale or disposal of equipment                9,000             --             --       --      -- 
      Minority interest in loss of subsidiary                 --             --             --       --      -- 
      Equity in loss of affiliate                             --             --             --       --      -- 
      (Gain) loss on deconsolidation of subsidiary            --             --       (416,270)      --      -- 
      Gain on liquidation of affiliate                        --             --             --       --      -- 
      Issuance of common stock for loan                       --             --             --       --      -- 
      Stock issued for services                           16,600             --             --       --      -- 
      Changes in operating assets and liabilities:
      Prepaid expenses and other current assets               --             --             --       --      -- 
      Other assets                                           450             --             --       --      -- 
      Other                                                   --             --             --       --      -- 
      Accounts payable and accrued expenses              179,223        100,000         19,271       --      -- 
                                                     -----------    -----------    -----------    -----   ----- 
        Net cash flows - operating activities            (36,074)       (47,944)       (20,852)      --      -- 
                                                     -----------    -----------    -----------    -----   ----- 

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisitions of property and equipment                      --             --             --       --      -- 
  Proceeds from sale of subsidiary's common stock             --             --             --       --      -- 
  Net proceeds from liquidation of affiliate                  --             --             --       --      -- 
  Investment in affiliate                                     --             --             --       --      -- 
  Increase (decrease) in notes receivable                 13,310             --             --       --      -- 
                                                     -----------    -----------    -----------    -----   ----- 
    Net cash flows - investing activities                 13,310             --             --       --      -- 
                                                     -----------    -----------    -----------    -----   ----- 

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock
    and warrants                                          50,000         25,000             --       --      -- 
  Proceeds from borrowings                                    --             --             --       --      -- 
  Principal payments on borrowings                            --             --             --       --      -- 
  Dividends paid                                              --             --             --       --      -- 
  Contribution from officer                                   --             --         15,000       --      -- 
                                                     -----------    -----------    -----------    -----   ----- 
    Net cash flows - financing activities                 50,000         25,000         15,000       --      -- 
                                                     -----------    -----------    -----------    -----   ----- 
NET CHANGE IN CASH                                        27,236        (22,944)        (5,852)      --      -- 
CASH, BEGINNING OF YEAR                                    1,560         28,796          5,852       --      -- 
                                                     -----------    -----------    -----------    -----   ----- 
CASH, END OF YEAR                                    $    28,796    $     5,852    $        --    $  --   $  -- 
                                                     ===========    ===========    ===========    =====   ===== 
SUPPLEMENTAL INFORMATION:
  Interest paid                                      $        --    $        --    $        --    $  --   $  -- 
                                                     ===========    ===========    ===========    =====   ===== 
  Note received on liquidation of affiliate          $        --    $        --    $        --    $  --   $  -- 
                                                     ===========    ===========    ===========    =====   ===== 

                                                                                                 From Inception,
                                                                                                  November 29,
                                                             Year Ended October 31,                 1978 to
                                                     -----------------------------------------    October 31,
                                                        1996           1997           1998            1998
                                                     -----------    -----------    -----------   --------------

<S>                                                  <C>            <C>            <C>            <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                  $   (90,544)   $    (8,297)   $    (6,672)   $(1,285,178)
  Adjustments to reconcile net loss to net cash
    flows from operating activities:
      Depreciation and amortization                           --             --             --         64,816
      Minority interest in dividends of subsidiary            --             --             --         (2,454)
      Loss on sale or disposal of equipment                   --             --             --         15,674
      Minority interest in loss of subsidiary                 --             --             --        (22,717)
      Equity in loss of affiliate                             --             --             --         44,910
      (Gain) loss on deconsolidation of subsidiary            --             --             --       (416,270)
      Gain on liquidation of affiliate                        --             --             --        (72,879)
      Issuance of common stock for loan                    3,645             --             --          3,645
      Stock issued for services                               --             --             --         16,600
      Changes in operating assets and liabilities:
      Prepaid expenses and other current assets               --             --             --             --
      Other assets                                            --             --             --         (6,641)
      Other                                                   --             --             --          8,981
      Accounts payable and accrued expenses                   --          3,500          6,582        456,618
                                                     -----------    -----------    -----------    -----------
        Net cash flows - operating activities            (86,899)        (4,797)           (90)    (1,194,895)
                                                     -----------    -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisitions of property and equipment                      --             --             --        (75,577)
  Proceeds from sale of subsidiary's common stock             --             --             --        141,600
  Net proceeds from liquidation of affiliate                  --             --             --         37,879
  Investment in affiliate                                     --             --             --        (35,791)
  Increase (decrease) in notes receivable                     --             --             --         25,881
                                                     -----------    -----------    -----------    -----------
    Net cash flows - investing activities                     --             --             --         93,992
                                                     -----------    -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock
    and warrants                                          94,000             --             --      1,554,444
  Proceeds from borrowings                                55,000             --             --         55,000
  Principal payments on borrowings                       (55,000)            --             --        (55,000)
  Dividends paid                                              --             --             --       (466,327)
  Contribution from officer                                   --             --             --         15,000

    Net cash flows - financing activities                 94,000             --             --      1,103,117
                                                     -----------    -----------    -----------    -----------
NET CHANGE IN CASH                                         7,101         (4,797)           (90)         2,214
CASH, BEGINNING OF YEAR                                       --          7,101          2,304             --
                                                     -----------    -----------    -----------    -----------
CASH, END OF YEAR                                    $     7,101    $     2,304    $     2,214    $     2,214
                                                     ===========    ===========    ===========    ===========
SUPPLEMENTAL INFORMATION:
  Interest paid                                      $     2,500    $        --    $        --    $     2,500
                                                     ===========    ===========    ===========    ===========
  Note received on liquidation of affiliate          $        --    $        --    $        --    $    50,000
                                                     ===========    ===========    ===========    ===========
</TABLE>

See accompanying notes to consolidated financial statements.

                                        F-5
<PAGE>

                  TECHSCIENCE INDUSTRIES, INC. AND SUBSIDIARIES
                          (DEVELOPMENT STAGE COMPANIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1   -        NATURE OF THE BUSINESS AND SUMMARY OF  SIGNIFICANT  ACCOUNTANT
                  POLICIES:

                  NATURE OF THE  BUSINESS  - The  Company  was  incorporated  on
                  November 29, 1978 for the purpose of developing  and selling a
                  solid waste disposal process which converts solid waste into a
                  marketable  fertilizer  by a special  compost  process.  Since
                  inception,  the Company has been in the development  stage and
                  has  had no  operating  revenues.  Presently  the  Company  is
                  pursuing a plan of  acquisitions,  mergers  or joint  ventures
                  which include businesses other than waste disposal.

                  PRINCIPLES  OF  CONSOLIDATION   -The  consolidated   financial
                  statements  include the  accounts of  Techscience  Industries,
                  Inc. and Biocomp, Inc., through January, 1993 (see Note 3) its
                  majority  owned  subsidiary.   All  significant   intercompany
                  transactions    and   accounts   have   been   eliminated   in
                  consolidation.

                  USE OF ESTIMATES - The preparation of financial  statements in
                  conformity  with  generally  accepted  accounting   principles
                  requires  management to make  estimates and  assumptions  that
                  affect the  reported  amounts of assets  and  liabilities  and
                  disclosure of contingent assets and liabilities at the date of
                  the financial  statements and the reported amounts of revenues
                  and expenses during the reporting periods.  Actual results, as
                  determined at a later date, could differ from those estimates.

                  FINANCIAL  INSTRUMENTS - Financial  instruments  include cash,
                  accounts  payable and accrued  expenses.  The amounts reported
                  for  financial  instruments  are  considered  to be reasonable
                  approximations of their fair value.

                  DEFERRED  TAXES - Deferred  income taxes arise from  temporary
                  differences  between financial and tax reporting,  principally
                  net operating losses. A 100% valuation  allowance is placed on
                  the deferred tax asset resulting from the net operating losses
                  as it is more  likely than not based on the  Company's  losses
                  since inception that the asset will not be utilized.

                  EARNINGS  (LOSS) PER SHARE - Basic earnings per share excludes
                  any dilutive  effects of options,  warrants,  and  convertible
                  securities.  Basic  earnings  per share is computed  using the
                  weighted-average  number of common shares  outstanding  during
                  the period.  Diluted  earnings per share is computed using the
                  weighted-average  number of common and common stock equivalent
                  shares outstanding during the period. Common equivalent shares
                  are  excluded  from  the   computation   if  their  effect  is
                  antidilutive.

                                       F-6
<PAGE>

                  TECHSCIENCE INDUSTRIES, INC. AND SUBSIDIARIES
                          (DEVELOPMENT STAGE COMPANIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2   -        BASIS OF PRESENTATION:

                  The Company's financial  statements have been presented on the
                  basis  that  it is a going  concern,  which  contemplates  the
                  realization of assets and the  satisfactions of liabilities in
                  the normal course of business. The Company reported net losses
                  of $241,347, $147,944 and $104,186 for the years ended October
                  31, 1991, 1992 and 1993 and $90,544, $8,297 and $6,672 for the
                  years ended October 31, 1996, 1997 and 1998. In addition,  the
                  Company has had no operating  revenues  since its inception in
                  1978.

                  The  Company is  pursuing a plan of  acquisitions,  mergers or
                  joint  ventures  which  include  businesses  other  than waste
                  disposal.   Techscience  Industries,  Inc.  in  November  1995
                  assigned its remaining  equity interest of Biocomp,  Inc., its
                  former subsidiary, along with related liabilities of $467,833,
                  and all of its stock to Biocomp, Inc.

                  Management  believes  through  acquisition,  merger  or  joint
                  venture  that the  Company  will be able to obtain  additional
                  working capital and ultimately, achieve profitable operations.

NOTE 3   -        RELATED PARTY INFORMATION:

                  In January 1993 the Company's  officer received an approximate
                  90% interest in Biocomp  resulting a gain of $416,270 from the
                  deconsolidation of Biocomp.

                  Biocomp  was  indebted to a former  officer  for  compensation
                  totalling  $284,499 in 1991, and $384,499 in 1992 (included in
                  accounts payable) and $467,833,  at October 31, 1993, 1994 and
                  1995. The compensation was earned for services performed prior
                  to the officer's  resignation  on August 26, 1993. In November
                  of 1995,  the Company paid $75,000 and assigned to Biocomp all
                  remaining shares of Biocomp owned by the Company.

NOTE 4   -        ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

                  Accounts  payable and accrued  expenses  are  comprised of the
                  following:

                                              Officer
                        October 31,           Salary              Other
                        -----------          ---------          ---------

                           1991              $284,499           $ 12,500
                           1992               384,399               --
                           1993                 --                  --
                           1994                 --                  --
                           1995                 --                  --
                           1996                 --                  --
                           1997                 --                 3,500
                           1998                 --                10,082

                                       F-7

<PAGE>

                  TECHSCIENCE INDUSTRIES, INC. AND SUBSIDIARIES
                          (DEVELOPMENT STAGE COMPANIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5   -        PRIVATE PLACEMENT:

                  On December 8, 1995,  the  Company  issued,  through a private
                  placement, 781,160 shares of common stock, par value $0.01 per
                  share at an issued price of approximately $0.12 per share. The
                  proceeds   were  used   principally   to  settle   outstanding
                  obligations to creditors.

NOTE 6   -        INCOME TAXES:

                  The Company and its former subsidiaries filed separate federal
                  income tax returns.  At October 31, 1998,  the Company and its
                  subsidiaries  had  approximately  $1,400,000  in combined  net
                  operating  losses  to be  carried  forward  to  offset  future
                  taxable income through 2018.

                  The Company has paid  dividends  in the past  because,  in the
                  opinion of counsel,  the nature of the Company's  revenues and
                  concentration  of its  stockholders,  would have  rendered the
                  Company  a  Personal  Holding  Company  as  defined  under the
                  Internal  Revenue Code.  Accordingly,  dividends  were paid to
                  avoid a penalty tax applicable to personal holding companies.

                  Effective  October 1, 1993, the Company  adopted  Statement of
                  Financial Accounting Standards No. 109, "Accounting for Income
                  Taxes"  ("FAS  109").  FAS 109  requires  a  change  from  the
                  deferred  method of accounting for income taxes of APB Opinion
                  11 to the asset and liability  method of accounting for income
                  taxes.  Under FAS 109,  deferred  income taxes are  determined
                  based on the differences  between the financial  statement and
                  tax bases of assets and  liabilities,  using enacted tax rates
                  in effect in the years in which the  differences  are expected
                  to reverse.

                  The principal effect of adoption was recognition of a deferred
                  tax asset  which was offset by a  valuation  allowance  of the
                  same amount. A valuation allowance is provided when it is more
                  likely than not that some  portion of the  deferred  tax asset
                  will not be realized. The management of the Company determined
                  that a full valuation  allowance was appropriate for the years
                  ended October 31, 1994, 1995, 1996, 1997 and 1998.

NOTE 7   -        SUBSEQUENT EVENTS:

                  REVERSE STOCK SPLIT - In February 1999, the Company's Board of
                  Directors approved and received consent from a majority of its
                  shareholders  to increase the number of  authorized  shares to
                  20,000,000  shares of common  stock  and  2,000,000  shares of
                  preferred  stock and  affect a  four-for  twenty-five  reverse
                  stock  split.  Common  shares and per share  amounts have been
                  retroactively  restated  for all periods  presented to reflect
                  the reverse stock split.

                                       F-8

<PAGE>

                  TECHSCIENCE INDUSTRIES, INC. AND SUBSIDIARIES
                          (DEVELOPMENT STAGE COMPANIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                  PROPOSED  ACQUISITION  AGREEMENT - On February 10,  1999,  the
                  Company signed a letter of intent with PetPlanet.com,  Inc., a
                  non-affiliated  California  corporation ("PPI"). The letter of
                  intent calls for a reverse merger  business  combination  with
                  PPI whereby the Company will exchange 7,325,000 authorized but
                  as yet  unissued  shares of its $.01 par value common stock in
                  exchange for all of PPI's common stock. As part of the merger,
                  the Company will change its name to PetPlanet.com, Inc.

                  In  addition,  as part of the  agreement,  the Company  made a
                  $150,000  bridge loan to PPI,  with interest at 10% per annum,
                  collateralized  by 51% of PPI's common stock.  The loan, which
                  has an original  due date of the earlier of the closing of the
                  proposed merger or May 15, 1999, can be extended to October 1,
                  1999.

                  Upon the  closing of the  reorganization,  the Company has the
                  option to convert  $50,000 of the  $150,000  debt into 100,000
                  shares of PPI's no par value common stock,  with the remaining
                  balance payable at closing.

                  CONVERTIBLE DEBT SUBSCRIPTION AGREEMENT - On February 5, 1999,
                  the Company  offered two  subscriptions  of  convertible  debt
                  securities,  each  up to  $12,400,  pursuant  to  Rule  506 of
                  Regulation  D of  the  Securities  Act  of  1933,  (the  "Debt
                  Securities").  The Debt  Securities are thirty day notes which
                  bear interest at 9.6% per annum and are  convertible  into the
                  Company's $.01 par value per share restricted  common stock at
                  $.062 per share,  for a total of 400,000  shares.  Through May
                  12,  1999,  the  Company  has  collected   $24,800  from  this
                  agreement.

                  PRIVATE  PLACEMENT OF  COMPANY'S  SECURITIES - On February 19,
                  1999, the Company offered accredited  investors under Rule 506
                  of  Regulation D of the  Securities  Act of 1933,  60 units at
                  $25,000 per unit.  Each unit  consists of 6,250  shares of the
                  Company's  $.01 par value per share  common stock at $4.00 per
                  share,  for a total of 375,000  shares.  Through May 12, 1999,
                  the Company has collected $1,000,000 from this agreement.

                  BRIDGE  PRIVATE  OFFERING - On February 19, 1999,  pursuant to
                  the  terms  and   conditions   of  the   Accredited   Investor
                  Subscription  Agreement  (See  Convertible  Debt  Subscription
                  Agreement),  the Company consummated a private placement under
                  Rule 506 of Regulation D of the  Securities  Act of 1933.  The
                  offering,  which provided the funding for the Company's bridge
                  loan to PPI, was comprised of $150,000 principal amount of 10%
                  promissory  notes  and  100,000  unregistered  shares  of  the
                  Company's  $.01 par value common stock.  The notes are due and
                  payable and the shares are issuable at the closing date of the
                  reorganization  with PPI. $75,000 of the offering was received
                  from a  stockholder  holding  875,000  shares of the Company's
                  common stock.

                                       F-9

<PAGE>

                  TECHSCIENCE INDUSTRIES, INC. AND SUBSIDIARIES
                          (DEVELOPMENT STAGE COMPANIES)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                    1999 LONG-TERM  INCENTIVE PLAN - In February 1999, the Board
                    of Directors  approved a resolution  to amend the  Company's
                    1984 Incentive Stock Option Plan creating the 1999 Long-Term
                    Incentive  Plan (the "1999  Plan"),  whereby an aggregate of
                    2,500,000  shares are  reserve for  issuance  under the 1999
                    Plan. No awards have been made under the Plan through May 4,
                    1999.

NOTE 8   -        NEW ACCOUNTING  PRONOUNCEMENTS - NEW ACCOUNTING PRONOUNCEMENTS
                  - In March 1998, the Accounting  Standards Executive Committee
                  issued Statement of Position 98-1 ("SOP 98-1"), Accounting for
                  the Costs of  Computer  Software  Developed  or  Obtained  for
                  Internal  Use.  SOP 98-1  requires  all costs  related  to the
                  development of internal use software other than those incurred
                  during the  application  development  stage to be  expensed as
                  incurred.  Costs incurred during the  application  development
                  stage are required to be  capitalized  and amortized  over the
                  estimated  useful life of the software.  SOP 98-1 is effective
                  for the Company's fiscal year ending March 31, 2000.

                  In April 1998,  the American  Institute  of  Certified  Public
                  Accountants  issued  SOP  98-5,  Reporting  on  The  Costs  of
                  Start-Up  Activities.  SOP 98-5 is effective for the Company's
                  fiscal year ending March 31, 2000.  SOP 98-5 requires costs of
                  start-up  activities and organization  costs to be expensed as
                  incurred.

                  In addition to the  aforementioned  pronouncements,  SFAS 133,
                  Accounting for Derivative  Instruments and Hedging  Activities
                  was issued in June 1998 for years ending after June 15, 1998.

                  The  Company  does not expect  that any of the  aforementioned
                  pronouncements will have a significant effect on its financial
                  statements.

                                       F-10

<PAGE>


                                   SCHEDULE A

DEBTS AND OBLIGATIONS OF BIOCOMP,  INC. AS REFLECTED ON THE COMPANY'S  UNAUDITED
FINANCIAL  STATEMENT  FOR THE NINE MONTHS  ENDED JULY 31, 1991  CONTAINED IN ITS
FORM 10Q.

JWH ACCRUED SALARY ALL OTHER DEBT

$232,300 $ 27,200

TOTAL                              $259,500

                                   SCHEDULE B

THE DEBTS OF BIOCOMP, INC. INCURRED DURING THE PERIOD OF AUGUST 1, 1991
                                               THROUGH AUGUST 26, 1993.

JWH ACCRUED SALARY ALL OTHER DEBT

$160,000 $ 48,333

TOTAL                              $208,333

                                   SCHEDULE C

                          TECHSCIENCE INDUSTRIES, INC.
                           LIABILITIES TO BE SETTLED.

TRUST CO. OF NJ
ALL OTHER DEBTS

$ 600* $11,900

TOTAL                              $12,500

*See attached August 13, 1992 letter from Trust Company of New Jersey.

                                       F-11
<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements of Section 12 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:  Parsippany, New Jersey
        May 13, 1999

                                            TECHSCIENCE INDUSTRIES, INC.


                                            BY: /s/ JAMES T. WOLL
                                                --------------------------------
                                                    James T. Woll, President and
                                                    Chief Executive Officer


                                            BY: /s/ GARY W. GILL
                                                --------------------------------
                                                    Gary W. Gill, Chief
                                                    Financial Officer


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

Dated:   Parsippany, New Jersey
         May 12, 1999

         /s/ JAMES T. WOLL
         --------------------------------
             James T. Woll, Director

Dated:   Parsippany, New Jersey
         May 12, 1999

         /s/ GARY W. GILL
         --------------------------------
             Gary W. Gill, Director

Dated:   Parsippany, New Jersey
         May 12, 1999

         /s/ JAMES S. GALLO
         --------------------------------
             James S. Gallo, Director

                                       F-12