<PAGE>   1

                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

   
                                  FORM 10-KSB/A
    

(MARK ONE)
[ X ]          ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES 
               EXCHANGE ACT OF 1934
               FOR THE FISCAL YEAR ENDED   JUNE 30, 1996
                                        ------------------

                                       OR

[   ]          TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES 
               EXCHANGE ACT OF 1934

               FOR THE TRANSITION PERIOD FROM______________ TO _________________
                         COMMISSION FILE NO. 2-78335-NY
                                            -------------
                              J R CONSULTING, INC.
                --------------------------------------------------
                  (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
   
<TABLE>
<CAPTION>
           NEVADA                                                             13-3121128
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<S>                                                                      <C>
(STATE OR OTHER JURISDICTION OF                                          (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                                           IDENTIFICATION NO.)

180 Varick Street, 13th Floor, New York, New York                                 10014
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                                        (ZIP CODE)
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ISSUER'S TELEPHONE NUMBER:  (212) 807-6777
                            --------------
    

SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT:

<TABLE>
<S>                                                                    <C>
                                                                       NAME OF EACH EXCHANGE
TITLE OF EACH CLASS                                                      ON WHICH REGISTERED
       NONE                                                                     NONE
-------------------                                                    ---------------------
</TABLE>

SECURITIES REGISTERED UNDER SECTION 12(G) OF THE EXCHANGE ACT:
                                      NONE
                                -----------------
                                (TITLE OF CLASS)

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

Check if 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 registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]
   

State issuer's revenues for its most recent fiscal year:    $1,536,000
    

State the aggregate market value of the voting and non-voting equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity: as of a
specified date within the past 60 days $15,115,892 as of June 30, 1996, based on
a price $2.50 per share.

State the number of shares outstanding of the issuer's classes of common equity,
as of the latest practicable date: 10,944,955 shares of Common Stock, $.04 par
value per share, as of June 30, 1996.

Transitional Small Business Disclosure Format (check one).  YES        NO   X
                                                                -----     -----

<PAGE>   2

                                     PART I


ITEM 1.      DESCRIPTION OF BUSINESS

INTRODUCTION

             J R Consulting, Inc. (the "Company" or the "Registrant") was
organized under the laws of the State of Nevada on June 8, 1982. Since
inception, the Company generated nominal revenues, and for at least the two
fiscal years prior to September 7, 1995 was not actively engaged in business.

RECENT ACQUISITIONS AND INVESTMENTS

             As of September 7, 1995, the Company, through a series of
transactions, acquired all of the issued and outstanding capital stock of
Benatone Limited, then known as Classlife Limited, a company formed under the
laws of England ("Benatone"), in exchange for an aggregate 1,020,932 shares of
the Company's common stock, $.04 par value per share (the "Common Stock").
Benatone, through its subsidiaries, is engaged in the manufacture and sale of
screwless electrical accessories, including electrical plugs, rewirable and
non-rewirable plugs, and connector blocks. Such products are marketed along with
ancillary services to the electrical and electronic markets.

             Also, as of September 12, 1995, the Company consummated the
acquisition of 21,390 Class B Ordinary Shares of Autokraft Ltd., a United
Kingdom corporation ("Autokraft"), representing 20% of the issued and
outstanding Ordinary Shares but representing 50% of the voting power of
Autokraft, in exchange for 632,585 shares of Common Stock of the Company. The
Company also entered into a Stock Subscription Agreement with Autokraft dated as
of September 12, 1995, pursuant to which the Company agreed to purchase an
aggregate 1,925 Class B Ordinary Shares of Autokraft for $150,000 as of that
date, and further agreed to purchase, in the Company's sole discretion and
without obligation, an additional 4,492 Class B Ordinary Shares of Autokraft for
$350,000 on or before October 12, 1995. Autokraft and its subsidiaries were
engaged in the design, manufacture and distribution of automobiles, including
the AC Cobra and the AC Ace automobiles. Both the AC Cobra and AC Ace were
high-powered, hand-crafted, aluminum-bodied sports cars.

             Furthermore, on March 1, 1996, the Registrant acquired, for
1,393,077 shares of Common Stock, all of the issued and outstanding capital
stock of, and a debt receivable from, Prima Eastwest Model Management, Inc., a
company formed under the laws of California ("Prima"). Prima primarily operates
a modeling agency in Los Angeles, California.

DELAY IN FILING REPORTS

             Because of accounting problems discovered at Prima after the
Company acquired it, the Company was unable, beginning with its Form 10-QSB for
the fiscal quarter ended March 



<PAGE>   3


31, 1996, to file timely the periodic reports required to be filed with the
Securities and Exchange Commission (the "SEC") by the Securities Exchange Act of
1934 (the "Exchange Act"). In April 1997, the Company consented to the entry of
a permanent injunction against it obtained by the SEC for the Company's failure
to file those reports on a timely basis. For a more detailed description of the
permanent injunction, please see Item 3 of this report entitled "Legal
Proceedings."
   
             On the same day that this amended report was filed, the Company
filed amendments to its Form 10-QSBs for the fiscal quarters ended September 30
and December 31, 1996, and March 31, 1997; its original Form 10-KSB for the
fiscal year ended June 30, 1997; and its original Form 10-QSBs for the fiscal
quarters ended September 30 and December 31, 1997, and March 31, 1998. The Form
10-QSB for the fiscal quarter ended March 31, 1998, was timely filed. The
Company currently expects to file its future Exchange Act periodic reports on a
timely basis.
    

             In the acquisition agreement for Prima, the former majority
shareholder of Prima had agreed to provide the Company by April 6, 1996, with
financial statements of Prima for the year ended December 31, 1995, audited by
an accounting firm engaged by the former majority shareholder. He also agreed to
obtain from those auditors any necessary consents so that those audited
financial statements of Prima could be included in the Company's periodic
reports required by the Exchange Act and in a registration statement filed by
the Company pursuant to the Securities Act of 1933, as amended.
   
             The acquisition agreement for Prima also provided that the former
majority shareholder of Prima would continue to have full operational control of
Prima following the acquisition. The Company agreed to this because part of the
consideration for Prima was contingent upon Prima's financial performance over
the three-year period beginning July 1, 1996. The former majority shareholder of
Prima, who also became a significant shareholder of the Company as a result of
this acquisition, could be removed from such operational control only with
"cause," as that term was defined in the agreement.
    
             Prior to the consummation of the acquisition of Prima, the Company
had received management-prepared financial statements of Prima for the year
ended December 31, 1995, and drafts of audited financial statements for the year
ended December 31, 1994. The Company acquired Prima on the basis of those
financial statements.

             However, the audited financial statements for Prima required by the
acquisition agreement were not delivered by the agreement deadline of April 6,
1996. Thereafter, the Company engaged in extensive negotiations with the former
majority shareholder of Prima and the auditors engaged by him regarding the
preparation and delivery of the required financial statements. The former
majority shareholder of Prima gave up operational control of Prima later in
1996.

             The Company then began dealing directly with Prima's accounting
staff and the auditors for Prima. Until then, the Company had received
management-prepared financial 


                                      -2-
<PAGE>   4


reports on a regular basis. However, upon a review of Prima's accounting
procedures subsequent to the departure of the former majority shareholder, the
Company discovered that there were fundamental flaws and inconsistencies in the
accounting procedures. Not until the first quarter of 1997 did the auditors
engaged by the former majority shareholder of Prima inform the Company that they
would be unable to express an opinion on the financial statements of Prima for
the two years ended December 31, 1995, and for the six months ended June 30,
1996.
   

             In the fall of 1996, the Company began reconstructing Prima's
accounting records for the period from March 1, 1996, the date upon which Prima
became a subsidiary of the Company, to June 30, 1996. The reconstruction of
those records is complete, thereby allowing the audit to be completed and the
auditors to express an opinion on Prima's financial statements for the year
ended June 30, 1996. At the same time, the Company began instituting revised
accounting systems and internal controls in order to prevent a recurrence of
similar accounting problems at Prima.
    

             Because of these problems, the Company is seeking a significant
reduction in the purchase price that it paid for Prima. For more information on
this and on the Company's plans for Prima, please see "Future Plan of
Operations" in Item 6 of this report entitled "Management's Discussion and
Analysis or Plan of Operation."

BENATONE LIMITED

     PRODUCTS

             Benatone manufactures and distributes the patented Simplug
screwless rewirable plug. The cables are retained within the electrical plug by
means of saddle clamps and not screws, making the product ideal for quick
assembly in manufacturing industries as compared to the normal screw-type plug.
The plug is deemed safer than the conventional plug in use with alternating
current, which tends to loosen screw-type fixings.

             Benatone manufactures a specifically designed jig to enable fast
wiring of the Simplug, which is sold separately to the user. Benatone has
further enhanced the jig by enabling it to be attached to an electrical tester,
allowing the operator to wire the Simplug and test the complete assembly in one
motion, thereby saving time and labor for the manufacturer.

             The product is suited for manufacturer use because of the ease of
assembly and the ability to assemble the plug to cable as the last part of
assembly. The use of the enhanced jig with electrical tester is beneficial to
the luminaire industry, which is required to test each lamp assembly before sale
to the public.

             Benatone also runs separately an assembly operation for
manufacturers of other products. It assembles and tests extension sockets with
variable length cable for a United Kingdom manufacturer of such products. It
also assembles table lamps for United Kingdom sports clubs in addition to other
smaller electrical assembly operations.


                                      -3-
<PAGE>   5


     MARKETS

             The Simplug is sold principally to the luminaire industry in
England and Ireland, including Northern Ireland. The luminaire market in the
United Kingdom alone represents approximately 6 million units per year.

     MARKETING STRATEGY

             Sales are generated by direct contact through Benatone's sales team
and in advertising through specialist magazines.

     NEW PRODUCTS
   

             Benatone is developing the next generation of Simplug made of
lighter and less brittle materials, which should result in a reduction of
manufacturing costs. The plug will also be more consumer friendly and Benatone
will seek to sell the same in the retail markets.
    

             Benatone has also developed a non-rewirable plug aimed at
manufacturers. The product has all necessary British Standard registrations but
is not yet in production.

             Benatone is also in research for the application of the saddle
clamp in other electrical applications. This is an ongoing process and new
developments will be announced as they are completed and ready for production.

     MANUFACTURING

             The Simplug is manufactured in China to full British Standards
Institute ("BSI") requirements and each electrical plug carries the British
Kitemark as to quality. The Simplugs are received in the United Kingdom as
complete units, where they are checked before delivery to purchasers. Benatone
is actively seeking a manufacturer to produce its non-rewirable plug and current
Simplug rewirable plug. It has approached manufacturers in India, China and
South Africa and is currently working with them to secure BSI certification for
the manufacture of the products.

     COMPETITION

             The electrical plug industry is very competitive with many
manufacturers in the Far East. Competition is normally based on price.

             The Simplug does not compete directly with other plugs on price
alone. While the Simplug is sold at almost 40% more than other screw-type plugs,
its qualities far outweigh its higher price. Effective quality controls mean
that the returns are less than 0.001% of the total sold. The Simplug can be
assembled to cable using the jig at three times the speed of the screw-type
plug. Further, in the luminaire industry, the product being assembled can be
electrically 


                                      -4-
<PAGE>   6


tested at the same time. Management believes that both the savings on time and
labor make the product unique.

             Many competitors are producing non-rewirable plugs and this type of
plug is gaining favor with many manufacturers. In this respect, Benatone
anticipates that in the future its own non-rewirable plug will gain a foothold
in the industry, although there are no assurances that this will occur.
   

             Presently, Benatone seeks to compete on the quality of its product.
The new generation of plug currently being developed should enable Benatone to
compete more directly on price.
    

     PATENTS

             The Company, through another subsidiary of Benatone, holds the
patents for the use of the saddle clamp method of restraining electrical cable
to the terminals in plugs and associated electrical products. These patents
cover the United Kingdom, most of Europe, the United States, Canada, Japan,
Australia and South Africa. A royalty of $0.0388 per plug sold is required to be
paid to the inventor under a Royalty Agreement dated September 7, 1995, which
will continue until the expiration of the patents in the year 2011. Both the
Simplug and the non-rewirable plug are patented.

     REGULATION

   
             Benatone is ISO 9001 registered with BSI. It carries out research
and development and manufacturing and assembly of electrical products with
quality control and systems that are acknowledged worldwide. The Simplug has BSI
1363 approval and also has a Kitemark license. The non-rewirable plug also has
BSI 1363 approval and will be Kitemarked when in production. All electrical
products or components must be tested and approved by the BSI to the exacting
requirements set by that institute before any electrical component or product
can be sold to the public.
    

     RESEARCH AND DEVELOPMENT

             Benatone carries out a research and development program which it
funds itself. That research has resulted in the new generation of Simplug, which
is presently undergoing internal and external evaluation prior to testing with
the BSI. During the fiscal year ended June 30, 1996, Benatone spent $91,000 on
research and development activities.

     EMPLOYEES

             At June 30, 1996, Benatone had 12 full-time employees. None of the
employees are subject to any collective bargaining agreement. Benatone employs
temporary employees at peak periods throughout the year on an as and when
required basis. Benatone considers its relationship with its employees to be
good.


                                      -5-
<PAGE>   7


PRIMA EASTWEST MODEL MANAGEMENT, INC.

     SERVICES

             Prima is divided into three principal divisions designated "Print,"
"Studio" and "Profile." Each is headed by an experienced manager in the
particular field.
   
             The Print division operates in the competitive modeling agency
field and is subdivided into male and female subdivisions. Management believes
that the Print division is one of the leading modeling agencies in Los Angeles,
California. These models are utilized by department stores, catalog houses,
advertising agencies, magazines, record companies, movie production firms and
general industrial advertisers.

             To complement the Print division, Prima also maintains a
photographic studio to cater to the needs of the photographic industry. The
studio was refurbished in December 1996 to high standards with particular regard
to the requirements of photographers and is regarded as one of the two premier
facilities in Los Angeles, located in the heart of Hollywood. In July 1996, to
encourage the growth of the studio, Prima enlisted to its team Quixote, which is
well known for its supply of custom designed motor homes for the film industry.
    

             Prima also provides hair, makeup and styling services for models,
actors, actresses and celebrities through its Profile division. This division
not only offers an important service to its print modeling arm, but also
provides Prima with an entry into the celebrity/entertainment field. It can thus
play a key role in the promotion of young models in the entertainment industry.

             Prima intends to commence operation of a Talent and Commercial
division during late 1997, although there is no assurance that this will occur.
This division will seek to introduce models who may have a career in the
entertainment industry into both the audio and visual entertainment industry and
conversely to expand the exposure and portfolio of artists currently in audio
and visual entertainment in the print modeling industry.

     MARKETS
   

             The traditional markets for Prima are in the field of Print. This
includes not only magazines such as Harpers Bazaar, Glamour, GQ, Mirabella,
People, Seventeen, Town and Country and Vogue; but also advertising agencies;
catalogs such as Spiegel and Avon; the large major department stores such as
Macy's and Bloomingdale's; movie production companies such as Tri-Star, Warner
Brothers and Columbia Pictures; record companies such as EMI and Polygram and
general industry such as Calvin Klein and Levi's. Major new clients include
Annhall Inc., Carlson & Partners, the Gianni Versace organization, Playboy, and
Broadway.

             Profile is very much in the entertainment heartland of Hollywood.
The Talent and Commercial divisions would also be linked to this industry with
the introduction of models to 
    


                                      -6-
<PAGE>   8


the entertainment industry and the expansion of portfolios for actors and
actresses through print modeling.

             The studio's market is the niche market of photo-shoots. It
benefits from its location central to Hollywood and its ease of access and
excellent facilities.

     MARKETING STRATEGY
   

             Prima advertises in trade journals used extensively by
professionals seeking such services. Prima's models have been widely seen on
hundreds of magazine covers creating a flow of new clients and new models. Prima
also relies on its reputation to attract both clients and model talent.
    

     COMPETITION

             Prima's Print division competes with the major worldwide model
agencies, several of which are headquartered in New York. Prima also competes
with many smaller regional firms. Because Prima frequently works with a network
of independent agencies when placing its models in other markets and conversely
helps place other agencies' models in the Los Angeles market, Prima can compete
with the major agencies on a worldwide basis.
   

             While the New York market, with the larger firms, tends to attract
the super models with its major European markets and larger fee income, Los
Angeles, on the other hand, attracts models who are also seeking an entry into
the entertainment industry. The entertainment industry dominates the Los Angeles
market and Prima is thus able to provide agency services for models to both
print and entertainment industry work. In particular, the success to date of its
Profile division, with its service of both the modeling and celebrity market,
and the introduction of the Talent and Commercial division at Prima should
ensure the continued highly competitive position of Prima in the entertainment
and modeling industry, particularly in the Los Angeles area, although there is
no assurance that this will continue. A competitor of Profile has also started a
hair and makeup division to try and compete in this attractive market.
    

             The Studio division competes with only one firm, which is located
by the ocean and is not as centralized as the Studio division. The Studio
division's location is its principal asset, apart from the availability of three
separate studio areas, makeup, catering facilities and year-round operation.

     AVAILABILITY OF TALENT

             Any modeling agency must expand by the talent that it has as part
of its portfolio. Prima has had and continues to have a solid foundation of
existing talent, both male and female, and its reputation assists in introducing
new talent to the industry. Furthermore, Prima operates an around-the-year
scouting policy with individual scouts traveling around the United States,
Europe (both central and eastern) and South America in search of new talent
which Prima can 


                                      -7-
<PAGE>   9

   

promote not only in its Print division, but also the Talent and Commercial
division, once commenced.
    

     CUSTOMER AND TALENT BASE

             Prima has been established for over ten years. Over that period, it
has maintained a wide stock of both customers and models. The client base is
very diverse from department stores through record companies and movie
production firms and is not linked solely to the geographic Los Angeles market.
This wide base in both customers and talent enables Prima to meet the demands of
the industry, and it can utilize this base to expand its operations.
   

             Management believes the Profile division, which serves all of the
model (not just Prima), movie and celebrity market, has shown excellent growth.
It continues to play a significant part in the expansion of revenue for Prima.
    

     REGULATION
   

             Prima holds a Talent License issued by the State of California
expiring December 27, 1997. This license enables it to operate as a talent
agency for all purposes other than film and the like. In this respect, Prima is
in the process of obtaining a Screen Actors Guild License for those of its
talent who may be used in film or affiliated industries.
    

     EMPLOYEES

             At June 30, 1996, Prima had 20 full-time employees. None of the
employees is subject to any collective bargaining agreement. Prima considers its
relationship with its employees to be good.

ITEM 2.      DESCRIPTION OF PROPERTY

             The Company's current address is c/o 201 South Biscayne Boulevard,
Suite 3000, Miami, Florida 33131. The mailing address is provided by the
Company's legal counsel, at no cost to the Company. The Company does not own or
lease any equipment or property.
   

             Benatone operated from premises at Unit 19, Glenfield Park,
Phillips Road, Blackburn, Lancashire, England, consisting of 5,000 square feet
of general industrial property with ancillary offices. It held the premises on a
month-to-month tenancy, which included certain services, at a current rent of
$3,108 per month.
    

             Prima leases offices at 6855 Santa Monica Boulevard, Suite 406, Los
Angeles, California, consisting of 2,400 square feet. The premises have been
held on a month-to-month tenancy since May 1996 at a current rent of $2,400 per
month. Prima also leases a studio industrial building at 7070 Santa Monica
Boulevard, Los Angeles, California, consisting of 6,000 


                                      -8-
<PAGE>   10


square feet. The premises are held pursuant to a lease that expires in October
2007, subject to the landlord's right to terminate the lease early on or after
October 7, 1998, upon 12 months' prior written notice. The current rent is
$7,275 per month.

ITEM 3.      LEGAL PROCEEDINGS
   

             Prima is a party to litigation which began on January 30, 1997, and
styled The Long Island Savings Bank, F.S.B. ("LISB") v. Prima Management, Prima
Eastwest Model Management, Inc., Kenneth Godt, Edward T. Stein, and Jeffrey
Dash, Supreme Court of the State of New York, County of Suffolk, Index No.
3904-97. LISB is suing all of the defendants for approximately $413,151 based
upon a demand loan that LISB made to Godt, Stein, Dash and Prima Management and
allegedly guaranteed by Prima. Under the terms of the alleged guarantee, Prima
is primarily liable along with the original obligors in the event of a default.
If Prima is found to be liable to LISB as the guarantor of the note, it will
seek contribution from the original obligors. Prima is vigorously defending this
litigation.

             The Company and Prima are parties to litigation began on February
12, 1997, and styled Kenneth Godt v. The Long Island Savings Bank, F.S.B., J R
Consulting, Inc., Pemm Acquisition Corporation and Prima Eastwest Model
Management, Inc., United States District Court, Eastern District of New York,
Case No. CV-97-0756 (JS). Pemm Acquisition Corporation ("Pemm") was the
wholly-owned subsidiary of the Company that was merged into Prima on March 1,
1996, in order to consummate the Company's acquisition of Prima. Godt alleges
that Prima promised that it would repay a demand loan that Godt, together with
Jeffrey Dash and Edward T. Stein, received from The Long Island Savings Bank,
F.S.B. ("LISB"). Godt claims that the Company and Pemm agreed to pay Godt's
indebtedness to LISB upon the closing of the acquisition of Prima by the Company
through the merger of Pemm into Prima. Prima allegedly guaranteed the loan, and,
under the terms of the guarantee, is allegedly primarily liable along with the
original obligors in the event of a default. Because of the structure of the
acquisition of Prima by the Company, management of the Company believes that
neither the Company nor Pemm has any liability to Mr. Godt in this litigation. 
Prima is vigorously defending this litigation.
    

             The Company consented to the entry against it of a Final Judgment
of Permanent Injunction dated April 25, 1997, in a Civil Action against it by
the Securities and Exchange Commission (the "SEC"), Case No. 97-834, in the
United States District Court for the District of Columbia. The SEC initiated the
civil action because the Company had failed to file timely its Form 10-KSB for
the fiscal year ended June 30, 1996; and its Form 10-QSBs for the fiscal
quarters ended March 31, September 30, and December 31, 1996. The judgment
required the Company to file with the SEC all of the foregoing reports by May
15, 1997, and enjoined the Company from failing to file future periodic reports
on a timely basis.

             Although the Company has been working diligently to reconstruct the
accounting records of Prima and file the reports listed in the judgment, as
described in more detail in 



                                      -9-
<PAGE>   11

   
"Delay in Filing Reports" in Item 1 of this report entitled "Description of
Business," the Company was not able to file the reports listed in the judgment
by May 15, 1997. In addition, the Company has not been able to file timely its
Form 10-QSB for the fiscal quarter ended March 31, 1997, its Form 10-KSB for the
fiscal year ended June 30, 1997, and its Form 10-QSBs for the fiscal quarters
ended September 30, and December 30, 1997.

             On the same day that this amended report was filed, the Company
filed amendments to its Form 10-QSBs for the fiscal quarters ended September 30
and December 31, 1996, and March 31, 1997; its original Form 10-KSB for the
fiscal year ended June 30, 1997; and its original Form 10-QSBs for the fiscal
quarters ended September 30 and December 31, 1997, and March 31, 1998. The Form
10-QSB for the fiscal quarter ended March 31, 1998, was timely filed. The
Company currently expects to file its future Exchange Act periodic reports on a
timely basis.
    

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

             None.

                                     PART II

ITEM 5.      MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
   

             Since July 1995, the Company's Common Stock has been quoted on the
NASDAQ OTC Bulletin Board(R). The following sets forth the high and low bid
prices of the Company's Common Stock for each quarter during the preceding two
fiscal years. Such quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual transactions:
    

<TABLE>
<CAPTION>
                                                                   HIGH BID                   LOW BID
                                                                   --------                   -------
<S>                                                               <C>                       <C>       
July 1, 1994 - September 30, 1994                                 Not Quoted                Not Quoted
October 1, 1994 - December 31, 1994                               Not Quoted                Not Quoted
January 1, 1995 - March 31, 1995                                  Not Quoted                Not Quoted
April 1, 1995 - June 30, 1995                                     Not Quoted                Not Quoted

                                                                   HIGH BID                   LOW BID
                                                                   --------                   -------

July 1, 1995 - September 30, 1995                                 $ 3.50                    $  0.125
October 1, 1995 - December 31, 1995                                 3.50                       1.375
January 1, 1996 - March 31, 1996                                    4.0625                     1.75
April 1, 1996 - June 30, 1996                                       3.75                       2.375
</TABLE>

     As of June 30, 1996, the Company had 1,177 holders of record of its Common 
Stock.



                                      -10-
<PAGE>   12



DIVIDENDS

             The Company has not declared any cash dividends with respect to its
Common Stock during the prior two years, and does not anticipate paying cash
dividends on its Common Stock in the foreseeable future.

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

RESULTS OF OPERATIONS

             Prior to September 7, 1995, the Registrant was not actively engaged
in any business. Consequently, any comparison between the fiscal year ended June
30, 1996, and the fiscal year ended June 30, 1995, is not meaningful.

             Effective September 7, 1995, the Registrant acquired, in exchange
for 1,020,932 shares of the Registrant's Common Stock, all of the issued and
outstanding capital stock of Benatone Limited, then known as Classlife Limited,
a company formed under the laws of England ("Benatone"). Benatone engages in the
manufacture and sale of screw-less electrical accessories, including electrical
plugs.

             On September 12, 1995, the Registrant acquired, in exchange for
632,585 shares of the Registrant's Common Stock, an equity interest of 20% but
with 50% of the voting power in Autokraft Ltd., a company formed under the laws
of England ("Autokraft"). Autokraft, together with its subsidiaries, engaged in
the design, manufacture and distribution of automobiles, including the AC Cobra
and the AC Ace automobiles.

             On March 1, 1996, the Registrant acquired, for 1,393,077 shares of
the Registrant's Common Stock, all of the issued and outstanding capital stock
of, and a debt receivable from, Prima Eastwest Model Management, Inc., a company
formed under the laws of California ("Prima"). Prima primarily operates a
modeling agency in Los Angeles, California.
   

             The Registrant incurred an operating loss of $1,342,000 for the
fiscal year ended June 30, 1996, of which $338,000 is attributable to the
operations of Benatone, $611,000 is attributable to the operations of Prima and
the balance to corporate. The Company had net sales of $1,536,000, $953,000 of
which are attributable to by Benatone and $583,000 of which are attributable to
by Prima. These results are for a ten-month period for Benatone and a four-month
period for Prima.
    

             Benatone's plug sales were less than expected. During the first
four months following the acquisition of Prima (March-June 1996), when Prima was
being run by the management that the Registrant inherited in the acquisition,
Prima suffered a significant operating loss as costs spiraled and only one
division met its operating forecasts.

              The Registrant wrote off its investment in Autokraft because
Autokraft went into administrative receivership on March 7, 1996, and the
receivers have indicated to the Registrant 


                                      -11-
<PAGE>   13


that there will not be any liquidating dividend to Autokraft's shareholders.
Although the Registrant proposed a financing package for Autokraft that it
considered adequate, the directors representing the other shareholders of
Autokraft rejected the proposal and forced Autokraft into receivership.

LIQUIDITY AND CAPITAL RESOURCES
   

             As of June 30, 1996, the Registrant had a working capital deficit
of $941,000. The Registrant has no current plans for future acquisitions during
the fiscal year ending June 30, 1997, and beyond. The Registrant plans to
consolidate its existing operations and establish them on a profitable basis as
a platform for future growth. The Registrant's working capital needs in the
short term to achieve a position of stability and profitability will be met from
revenues generated from the operations of Benatone and Prima, from cash on hand,
and if required, from additional debt and/or equity financing, although no
assurance can be given that such additional debt and/or equity financing will be
consummated. Since June 30, 1996, the Registrant has been able to arrange some
additional equity financing and will continue to monitor the financial
requirements of the operations of Benatone and Prima.
    

FUTURE PLANS FOR BENATONE AND PRIMA

             As a result of Benatone failing to reach forecasted sales for the
fiscal year, the Registrant is currently holding discussions with the sellers
with respect to a significant reduction in the original purchase price. There
can be no assurance that the Registrant will be successful in obtaining the
desired reduction or any reduction in that price from the sellers.

             The Registrant is reviewing the performance of its senior and
middle management of Benatone. Retailers of Benatone's products are increasingly
demanding a non-rewirable plug. Benatone currently sells a rewirable plug but
has not yet found a suitable manufacturer for its own version of the
non-rewirable plug. During the fiscal year beginning July 1, 1996, the
Registrant arranged for Benatone to focus on the following actions to avoid the
problems suffered in the fiscal year ended June 30, 1996:
   

             1.  Development of a new, more "consumer friendly" rewirable plug 
                 that can be placed directly with retailers;

             2.  Further assessment of Benatone's version of the non-rewirable 
                 plug;

             3.  Expansion of the sales department; and

             4.  Reduction in overhead expense.

    
             During the fiscal year beginning July 1, 1996, the Registrant
arranged to have Prima take the following actions to correct the deficiencies
that surfaced immedately after the acquisition:


                                      -12-
<PAGE>   14

   

             1.   Reduction in overhead expense;

             2.   Expansion of the existing operating divisions;

             3.   Assessment of the profit potential from the additions of other
                  compatible operating divisions; and

             4.   Improvement in accounting and control systems.
    

             Because of the losses in both income and goodwill incurred by Prima
during the period that the former management operated its business after the
acquisition, the Registrant is currently holding discussions with the former
majority shareholder of Prima with respect to a significant reduction in the
original purchase price. There can be no assurance that the Registrant will be
successful in obtaining the desired reduction or any reduction in that price
from the former majority shareholder.

SIGNIFICANT ACCOUNTING CHANGES
   

             The Registrant filed its Form 10-QSB for the third fiscal quarter
ended March 31, 1996, incorporating a fair value of $3.00 for each of the
Company's shares issued in connection with the investment in Autokraft and the
acquisition of Benatone and $2.60 for each of the Company's shares issued in
connection with the acquisition of Prima. On completing its own financial
statements to June 30, 1996, in accordance with United States generally accepted
accounting principles, the Company re-assessed the fair value of the investment
in Autokraft and the fair value of Benatone and Prima. Based on the appointment
of an administrative receiver for Autokraft, the Company in its financial
statements reduced the value of the shares issued to acquire the investment in
Autokraft to $0.04 per share as representing the fair value of the investment.
Since acquisition, Benatone has encountered much lower sales and revenue figures
and been unable to operate profitably. The Company has failed in repeated
attempts to redesign the Simplug to both reduce the cost of production and allow
sales directly to the retail market rather than only to the luminaire industry.
Also, the Company has been unsuccessful in applying the patent to other
electrical accessories and now believes this could only be achieved with
considerable and expensive research and development. Consequently, the Company
has decided not to recognize most of the value of the patents that had been
valued in excess of the purchase cost. In its financial statements, the Company
reduced the value of the shares issued for the acquisition of Benatone to $0.04
per share as representing a fair value of the acquired company. Also, since
acquisition, Prima has encountered much lower revenue figures, reduced goodwill
and accounting problems. After the Company resolved most of the accounting
problems, a significant negative asset value of Prima on acquisition became
apparent. Consequently, the Company in its financial statements reduced the
value of the shares issued for the acquisition of Prima to $0.04 per share as
representing a fair value of the acquired company.
    


                                      -13-
<PAGE>   15


ITEM 7.      FINANCIAL STATEMENTS

             The Financial Statements are attached to this Report.
   
             
             In the Financial Statements for the fiscal year ended June 30,
1996, the accounting problems encountered at Prima caused Coopers & Lybrand, the
Registrant's auditors, to disclaim any opinion on the Company's consolidated
financial statements at June 30, 1996 and for the year then ended because the
financial records of Prima had not permitted the application of auditing
procedures necessary to express an opinion on those consolidated financial
statements. For the period during which Prima was a subsidiary of the Registrant
(March 1 through June 30, 1996), the records maintained by Prima were
unauditable with respect to balances for accounts receivable from and accounts
payable to models.

             The audited financial statements for Prima required by the
acquisition agreement, were not delivered by the former Chief Executive Officer
and majority shareholder and not until the first quarter of 1997 did the
auditors engaged by the former majority shareholder of Prima inform the
Registrant that they would be unable to express an opinion on the financial
statements of Prima for the two years ended December 31, 1995, and for the six
months ended June 30, 1996.

             In the fall of 1996, the Company began reconstructing Prima's
accounting records for the period from March 1, 1996, the date upon which Prima
became a subsidiary of the Company, to June 30, 1996. The reconstruction of
those records is now completed allowing the audit to be completed and the
auditors to express an opinion. At the same time, the Company is instituting
revised accounting systems and internal controls in order to prevent a
recurrence of similar accounting problems at Prima.
    
                  
ITEM 8.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
             FINANCIAL DISCLOSURE
   

             The Company's Current Report on Form 8-K dated November 6, 1995, is
hereby incorporated herein by reference.
    

                                    PART III

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 as of June 30,
1996, with respect to the Directors and Executive Officers of the Company.


NAME                               AGE                POSITION
----                               ---                --------
Peter Zachariou                    35                President and Chairman of
                                                     the Board of Directors

Gabriel Harris                     44                Secretary and Director

David Lean                         49                Treasurer and Director


         Directors are elected at the annual meeting of shareholders and hold
office until the following annual meeting and until their successors are elected
and qualified. All Executive Officers serve at the discretion of the Board of
Directors.

         Peter Zachariou has been President and Chairman of the Board of
Directors of the Company since June 23, 1995, and Treasurer of the Company since
July 15, 1997. From June 23, 1995 until August 11, 1995, Mr. Zachariou was also
Secretary and Treasurer of the Company. For at least the preceding five years,
Mr. Zachariou has been a private investor.

         Gabriel Harris has been Secretary and a Director of the Company since
August 11, 1995. For at least the preceding five years, Mr. Harris has also been
a solicitor on his own account in England.


                                      -14-
<PAGE>   16


         David Lean has been a Director of the Company since August 11, 1995,
and was Treasurer of the Company from April 11, 1995, to May 9, 1997. For at
least the preceding five years, Mr. Lean has also been a managing director of a
United Kingdom subsidiary of a Canadian mining company.

         The Company's securities are not registered under Section 12(g) of the
Exchange Act. Accordingly, the Directors and Executive Officers of the Company
are not required to file reports under Section 16(a) of that act.

ITEM 10.      EXECUTIVE COMPENSATION

              No Director or Executive Officer of the Company received any cash
compensation during the fiscal year ended June 30, 1996.

              All members of the Company's Board of Directors, whether officers
of the Company or not, may receive an amount yet to be determined annually for
their participation in meetings of the Board and will be required to attend a
minimum of four meetings per fiscal year. The Company reimburses all expenses
for meeting attendance or out-of-pocket expenses connected directly with their
Board participation.

ITEM 11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

              The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of June 30, 1996, by each
Director, Executive Officer and any person known to the Company to own
beneficially more than 5% of the Company's Common Stock and by all Directors and
Executive Officers of the Company as a group.



                                      -15-
<PAGE>   17

<TABLE>
<CAPTION>
NAME AND ADDRESS                                            SHARES OF COMMON STOCK                     PERCENT
OF BENEFICIAL OWNER                                           BENEFICIALLY OWNED                      OWNED (1)
-------------------                                           ------------------                      ---------
<S>                                                         <C>                                       <C>  
Peter Zachariou                                                    4,897,598(2)                          44.7%(2)
Units 13-16
Euro Trading Estate
Oak Street
Blackburn BB1 6PL, England
                                                                           0                                0%
Gabriel Harris                                                       
Units 13-16
Euro Trading Estate
Oak Street
Blackburn BB1 6PL, England

David Lean                                                             1,000                                *
Units 13-16
Euro Trading Estate
Oak Street
Blackburn BB1 6PL, England

Edward T. Stein                                                      634,942                              5.8%
201 N. Service Road
Melville, New York 11747

Brain Angliss                                                        632,585                              5.8%
Vickers Drive
Brooklands Industrial Park
Weybridge, Surrey, England

Francis Vause                                                        568,332                              5.2%
12 Hayfield
Beachwood, Blackburn
Lancashire BB2 7BP, England

All officers and directors                                         4,898,598                             44.8%
as a group (3 persons)
</TABLE>

--------------------
*    Less than 1%.


     (1)  Based upon 10,944,955 shares of Common Stock outstanding as of June 
          30, 1996.

     (2)   Mr. Zachariou is the sole shareholder and a principal of Havilland 
           Ltd., the holder of record of these shares.

                                      -16-


<PAGE>   18


ITEM 12.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
   

              During the fiscal year ended June 30, 1996, Peter Zachariou, a
Director and the President and Treasurer of the Company; David Lean, a Director
of the Company; and Minden Business Corporation ("Minden"), an affiliate of Mr.
Lean, from time to time made cash advances to the Company. The advances are
unsecured, payable on demand and interest-free. The largest aggregate amount of
the advances made by Mr. Zachariou, Mr. Lean and Minden during the fiscal year
and the outstanding aggregate amount of such advances at June 30, 1996, were
$53,000, $96,000 and $68,000, respectively.
    

<TABLE>
<CAPTION>
ITEM 13.      EXHIBITS AND REPORTS ON FORM 8-K
<S>  <C>      <C>
(a)  Exhibits

       3.1   Articles of Incorporation, as amended (1)
       3.2   By-Laws, as amended (1)
      10.1   Benatone Exchange Agreement - Creditors (2)
      10.2   Benatone Share Acquisition Agreement (Weldnow Enterprises Ltd.) (2)
      10.3   Benatone Share Acquisition Agreement (Dynedeem Limited) (2)
      10.4   Benatone Exchange Agreement (2)
      10.5   Benatone Asset Sale Agreement (2)
      10.6   Benatone Royalty Agreement (2)
      10.7   Benatone Consultancy Agreement (2)
      10.8   Benatone Deed (2)
      10.9   Autokraft Stock Purchase Agreement (3)
      10.10  Autokraft Stock Subscription Agreement (3)
      10.11  Prima Agreement and Plan of Merger (4)
      21.1   Subsidiaries of the Registrant
</TABLE>

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

(1)   Incorporated herein by reference to Registrant's Registration Statement on
      Form S-18, declared effective August 10, 1982 (SEC File No. 2-78335-NY), 
      and to Registrant's Annual Report on Form 10-KSB for the fiscal year ended
      June 30, 1995.

(2)   Incorporated herein by reference to the Registrant's Current Report on 
      Form 8-K dated September 7, 1995.

(3)   Incorporated herein by reference to the Registrant's Current Report on 
      Form 8-K/A dated September 12, 1995.

(4)   Incorporated herein by reference to the Registrant's Current Report on 
      Form 8-K dated March 1, 1996.



                                      -17-
<PAGE>   19


(b)   Form 8-K

          The Registrant did not file any Current Reports on Form 8-K during the
          last quarter of the fiscal year ended June 30, 1996.


                                      -18-
<PAGE>   20


                                   SIGNATURES
   

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this amendment to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                                   J R CONSULTING, INC.

Date:  May  13, 1998                            By:   /s/ Peter Zachariou
                                                      -------------------------
                                                      Peter Zachariou, President
    

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
   

<TABLE>
<CAPTION>
SIGNATURE                                          TITLE                                          DATE
---------                                          -----                                          ----
<S>                                         <C>                                              <C>
/s/ Peter Zachariou                         President/Principal                               May 13, 1998
------------------------------------        Executive and Financial                                  
PETER ZACHARIOU                             Officer and Director


                                            Secretary and Director                            May   , 1998
------------------------------------                                                              ---
GABRIEL HARRIS


/s/ David Lean                              Principal Accounting                              May 13, 1998
------------------------------------        Officer and Director                                 
DAVID LEAN                                  
</TABLE>
    




SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
              15(D) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS.

           No annual report or proxy material has been sent to security holders,
nor are such materials anticipated to be sent, with the exception of this Annual
Report on Form 10-KSB.


                                      -19-
<PAGE>   21
                      J R Consulting Inc.

                      FINANCIAL STATEMENTS

                      FOR THE YEAR ENDED JUNE 30, 1996




<PAGE>   22
J R CONSULTING INC.


<TABLE>
<CAPTION>

An index of the relevant Financial Statements follows:                                  Page

<S>                                                                                         <C>
Report of Independent Accountants.......................................................  F-2

CONSOLIDATED FINANCIAL STATEMENTS:

Consolidated Balance Sheets as of June 30, 1995 and 1996................................  F-3

Consolidated Statements of Operations for the three years ended
June 30, 1996...........................................................................  F-4

Consolidated Statements of Cash Flows for the three years ended
June 30, 1996...........................................................................  F-5

Consolidated Statements of Shareholders' Equity for the three years
ended June 30, 1996.....................................................................  F-7

Accounting Policies.....................................................................  F-8

Notes to Consolidated Financial Statements..............................................  F-8

</TABLE>




                                      F-1


<PAGE>   23

J R CONSULTING INC. 



REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of J R Consulting Inc.
   
We were engaged to audit the accompanying consolidated balance sheets of J R
Consulting Inc. and subsidiaries as of June 30, 1996 and 1995 and the related
consolidated statements of operations, shareholders' equity and cashflows for
the year ended June 30, 1996, 1995 and 1994. 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 audits in accordance with generally accepted auditing standards
except as discussed in the following paragraph. 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
audits provide reasonable basis for our opinion.

In our opinion dated 31 July 1997, we were unable to express an opinion on the
1996 financial statements. The records of Prima Eastwood Model Management Inc
("Prima") one of the significant subsidiaries, did not permit the application of
auditing procedures necessary to express an opinion on the financial statements.
Prima did not maintain adequate detailed records, which consequently were
unauditable with respect to balances for accounts receivable from and accounts
payable to talents. As described in Note 3, the company has been able to
adequately re-construct the accounting records so as to be able to restate the
records for accounts receivable and accounts payable to talents for this period.
Accordingly, our present opinion on the 1996 financial statements as presented
herein, is different from that expressed in our previous report.

As detailed in Note 20, the company has been in violation of the permanent
injunction issued by the US Securities and Exchange Commission. The management
has not determined the impact of such a violation on its financial statements.
The financial statements do not include any adjustments that might result from
the outcome of these uncertainties.

In our opinion, except for the effects of the matter discussed in the fourth
paragraph, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of J R Consulting Inc.
and subsidiaries as of June 30, 1996 and 1995 and the results of its operations
and its cash flows for the years ended June 30, 1996, 1995 and 1994 in
conformity with generally accepted accounting principles.
    



Manchester, UK                               Coopers & Lybrand

  May, 1998



                                      F-2

<PAGE>   24
J R CONSULTING INC.

                               J R CONSULTING INC.
                           CONSOLIDATED BALANCE SHEETS
                          AS OF JUNE 30, 1995 AND 1996
   
<TABLE>
<CAPTION>
                                                                                    1995        1996
                                                                  NOTE             $'000       $'000
ASSETS
<S>                                                                              <C>             <C>
Current assets

  Cash and cash equivalents                                                          --          35

  Accounts receivable:

    Trade                                                                            --         398

    Other                                                         5                  --         388

  Inventories                                                                                   143
                                                                                 ------      ------
    Total current assets                                                             --         964


Property, plant and equipment, net of depreciation                6                  --         123

Intangible assets

  Goodwill & patents                                              7                  --         917
                                                                                 ------      ------
  Total assets                                                                       --       2,004
                                                                                 ------      ------

LIABILITIES AND SHAREHOLDERS EQUITY 

Accounts payable:

  Trade                                                           8                  --       1,295

Other current liabilities                                         9                  --         610
                                                                                 ------      ------
  Total current liabilities                                                          --       1,905

Long term debt                                                   10                  --          68
                                                                                 ------      ------
  Total non-current liabilities                                                      --          68

Commitments and contingencies                                    13

  Total liabilities                                                                  --       1,973
                                                                                 ------      ------


Shareholders' equity

Common stock, par value per share $0.04; shares
authorised 100 million; 11,719,955 (1996) and 5,368,822
(1995) shares issued and outstanding                             14                 215         469
                                                                 14
Additional paid-in capital less discount                                            375       1,853

Retained deficit                                                                   (590)     (2,291)
                                                                                 ------      ------

  Total shareholders' equity                                                         --          31
                                                                                 ------      ------

  Total liabilities and shareholders' equity                                         --       2,004
                                                                                 ======      ======
</TABLE>
    







    The accompanying notes are an integral part of these financial statements


                                      F-3
<PAGE>   25


J R CONSULTING INC.

                              J R CONSULTING INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE THREE YEARS ENDED JUNE 30, 1994, 1995 AND 1996
   
<TABLE>
<CAPTION>
                                                                     1994       1995        1996
                                                       Note          $'000      $'000       $'000
<S>                                                     <C>            <C>        <C>        <C>  
Net sales of products and services                                       --         --       1,536
Operating costs and expenses

  Cost of products and services                                          --         --         644
  Selling general and administrative                                      2         10       2,185
  Depreciation and amortisation                                          --         --          49
                                                                       -----      -----     ------
Total operating costs and expenses                                        2         10       2,878

                                                                       -----      -----     ------
Operating loss                                                           (2)       (10)     (1,342)

Other income (expense):

  Interest expense, net                                                  --          --        (12)
  Write off investment                                  12               --          --       (347)
                                                                       -----      -----     ------
Loss from continuing operations before
  income taxes                                                           (2)       (10)     (1,701)

Provision for income taxes                              15               --         --         --
                                                                       -----      -----     ------
Net loss                                                                 (2)       (10)     (1,701)
                                                                       =====      =====     ======


Net loss per share                                      16             $0.00      $0.00     $(0.17)
</TABLE>
    










    The accompanying notes are an integral part of these financial statements


                                      F-4


<PAGE>   26

J R CONSULTING INC.


                               J R CONSULTING INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE THREE YEARS ENDED JUNE 30, 1994, 1995 AND 1996
   

<TABLE>
<CAPTION>

                                                       1994       1995       1996
                                                      $'000      $'000      $'000
<S>                                                  <C>        <C>        <C>    
OPERATING ACTIVITIES

Net loss                                                 --         --     (1,701)

Adjustment to reconcile net earnings to net cash
flow from operating activities:

  Depreciation and amortization of
    property, plant and equipment                        --         --         17

  Amortization of intangibles                            --         --         32

  Write off of investment                                --         --        347

  (Increase) decrease in receivables                     --         --         42

  (Increase) decrease in prepaid expenses
     and other accrued liabilities                       --         --       (116)

  Increase/(decrease) in payables                        --         --        272

  (Increase) in inventory                                --         --       (138)

  Advance to officer of subsidiary                       --         --       (237)
                                                     ------     ------     ------

NET CASH OUTFLOW FROM OPERATING
  ACTIVITIES                                             --         --     (1,482)

INVESTING ACTIVITIES:

Capital expenditures                                     --         --        (46)

Purchase of investments                                  --         --       (322)

Consolidation of the opening cash balance of             --         --         28
Benatone and Prima                                   ------     ------     ------

NET CASH OUTFLOW FROM INVESTING ACTIVITIES               --         --       (340)
FINANCING ACTIVITIES:

Proceeds in respect of common stock to be issued         --         --        775

Net proceeds from issuance of common stock               --         --        835

Loans from officers                                      --         --        199

Proceeds from bank loan                                  --         --         48
                                                     ------     ------     ------
NET CASH FLOW FROM FINANCING ACTIVITIES                  --         --      1,857

Net increase in cash and cash equivalents                --         --         35

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


CASH AND CASH EQUIVALENTS AT END OF YEAR                 --         --         35
                                                     ======     ======     ======


</TABLE>
    


                                      F-5



<PAGE>   27
J R CONSULTING INC.

                               J R CONSULTING INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE THREE YEARS ENDED JUNE 30, 1994, 1995 AND 1996
                                     CONT...

                                                 1994       1995       1996
   
                                                $'000      $'000      $'000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION

Interest paid                                     --         --         12

Income taxes paid                                 --         --          -
                                              ======     ======     ======

NON CASH ASSETS AND LIABILITIES OF
ACQUISITION (Note 11):

Property and equipment                            --         --         94

Patents                                           --         --        232

Inventories                                       --         --          5

Receivables                                       --         --        440

Prepaid expenses                                  --         --         12

Due from officer                                  --         --         50

Payables                                          --         --       (539)

Accrued expenses                                  --         --       (103)

Provisions                                        --         --       (413)

Loans                                             --         --       (426)
                                              ------     ------     ------
                                                  --         --       (648)
                                              ======     ======     ======



    

















   The accompanying notes are an integral part of these financial statements



                                      F-6

<PAGE>   28

J R CONSULTING INC.

                               J R CONSULTING INC.
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
             FOR THE THREE YEARS ENDED JUNE 30, 1994, 1995 AND 1996
   
<TABLE>
<CAPTION>


                                   Common stock issued       Additional                                   Total
                                                               paid up                    Retained     shareholders'
                                                              capital       Discounts     deficits        equity
                                  Number           $'000       $'000          $'000        $'000         $'000
<S>             <C>              <C>                <C>          <C>          <C>           <C>            <C> 
Balance at July, 1 1993          3,181,224          127          524          (100)         (578)          (27)


Net loss                                --           --           --            --            (2)           (2)
                               -----------      -------     --------       -------       -------       -------
Balance at June 30, 1994         3,181,224          127          524          (100)         (580)          (29)


Issuance of common stock         2,187,598           88           --           (54)           --            34

Debt waived                             --           --            5            --            --             5

Net loss                                --           --           --            --           (10)          (10)
                               -----------      -------     --------       -------       -------       -------
Balance at June 30, 1995         5,368,822          215          529          (154)         (590)           --


Issuance of common stock         5,576,133          223          734            --            --           957

Receipts in respect of common
stock to be issued                      --           31          744            --            --           775

Net loss                                --           --           --            --        (1,701)       (1,701)

                               -----------      -------     --------       -------       -------       -------
Balance at June 30, 1996        10,944,955          469        2,007          (154)       (2,291)           31
                               ===========      =======     ========       =======       =======       =======
</TABLE>
    
















   The accompanying notes are an integral part of these financial statements




                                      F-7
<PAGE>   29
J R CONSULTING INC.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1         ACCOUNTING POLICIES

The financial statements have been prepared in accordance with generally
accepted accounting principals in the United States.

The principal accounting policies followed by the Group (as defined below) and
observed in the preparation of these financial statements are summarised below:

BASIS OF CONSOLIDATION

        (a)         Basis of presentation

The balance sheet of J R Consulting Inc., (The "Company") and its subsidiaries
(collectively, the "Group") as of June 30, 1995 and 1996 and the statements of
operations, shareholders equity and cashflows for the years ended June 30, 1994,
1995 and 1996, are presented on a consolidated basis and include the accounts of
all the Company's wholly owned subsidiaries. All significant intercompany
balances and transactions have been eliminated from the financial statements.

Prior to the first quarter of the year ended June 30, 1996, the Company reported
as a development stage company as defined in Statement of Financial Accounting
Standards No. 7. Before the acquisition of Classlife Limited and subsequently
Prima Eastwest Model Management Inc. the Company devoted substantially all of
its efforts to establishing its business, and was therefore defined as a
development stage company.

        (b)         Acquisitions

On September 7, 1995 the Company acquired, through a series of transactions, all
the issued and outstanding capital stock of Classlife Limited, a company formed
under the laws of England, in exchange for an aggregate 1,020,932 shares of the
company's stock. Classlife Limited then changed its name to Benatone Limited, in
which name it is referred throughout these financial statements.

On March 1, 1996 the Company acquired by merger Prima Eastwest Model Management
Inc. ("Prima"), a California corporation. The Company issued 363,551 shares of
its common stock in the acquisition of Prima. Another 646,444 shares were
allocated and were held in escrow related to an earn out provision in the merger
agreement by which the shareholders of Prima can receive additional shares of
the Company based on Prima's operating result. However no such contingent
consideration will become payable.





                                      F-8
<PAGE>   30
J R CONSULTING INC.



In addition, on March 1 1996 the Company issued 1,029,526 shares in exchange for
debts due to the previous shareholders of Prima amounting to $2,649,000.

        (c)       Members of the Group

        o         Benatone Limited and its subsidiaries, 100% owned (United
                  Kingdom)

                  Benatone holds patents in the design of screwless electrical
                  plugs. Plugs are manufactured to the company's design in the
                  low cost countries and imported to the UK for sale to the
                  lighting industry and other electrical appliance
                  manufacturers.

        o         Prima Eastwest Model Management Inc., 100% owned (USA)

                  Prima is a model agency in Los Angeles providing management
                  services to models and talents in the entertainment and beauty
                  products industries, primarily in California. It also provides
                  related studio rental services in California.
   
    

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.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents includes unrestricted cash in banks and highly liquid
investments with maturities of less than three months when purchased.

INVESTMENTS

Investments as to which the Group exercises significant influence are accounted
for by the equity method. Other investments are carried at the lower of cost and
net realisable value.

INVENTORIES

Inventories are stated at the lower of cost or market. The Company uses the FIFO
method for determining costs. Provision is made for slow moving and obsolete
inventory if necessary.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Property and equipment are
depreciated using the straight line method over the estimated useful life of the
assets. Gains or losses on disposal of fixed assets are recorded in income.


                                      F-9


<PAGE>   31
J R CONSULTING INC.



GOODWILL AND OTHER INTANGIBLES

Goodwill arising on acquisitions is determined, in general, as the difference
between the fair value of the consideration and the fair values of the separable
assets and liabilities acquired.

Goodwill and other intangibles are amortised on the straight line method over 15
years. The company reviews its intangible assets each year, to confirm that they
retain economic value and that they continue to justify investment and support.
The economic life attributable to goodwill is determined by the officers having
regard to the particular markets in which the Company operates. In extreme
circumstances, where there has been a permanent impairment in the economic value
of goodwill, the reduction in value is written off through the income statement.

REVENUE RECOGNITION

Revenues are recorded at the time of the shipments of the products or
performance of the services.

RESEARCH AND DEVELOPMENT COSTS
   

Costs associated with the development of new products and changes to products
are charged to operations as incurred. R&D costs in the year amounted to $91,000
(1995: $nil, 1994: $nil).
    

INCOME TAXES

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes". This statement
requires that deferred tax assets and liabilities are determined based on the
temporary differences between the financial reporting basis and the tax basis of
assets and liabilities using enacted tax rates in effect for the year in which
the differences are expected to reverse.

FOREIGN CURRENCY TRANSLATION

All assets and liabilities of foreign subsidiaries are translated into US
dollars at fiscal year end exchange rates. Income and expense items are
translated at average exchange rates prevailing during the fiscal year. The
resulting translation adjustments are recorded as a component of shareholders'
equity.

LOSS PER SHARE

Primary net loss per share is based on the weighted average number of shares of
common stock outstanding during the year.




                                      F-10
<PAGE>   32
J R CONSULTING INC.


   

2        GOING CONCERN

The consolidated statement of income, on page 4 shows that the Group incurred a
loss of $1,701,000 during the year. The consolidated balance sheet on page 3
shows that current liabilities exceeded current assets by $941,000.

The directors are in negotiation with existing and potential new shareholders
with a view to raising funds for the Group. Also, the directors are negotiating
with the vendors of Prima to reduce the consideration paid for that subsidiary
and to recover some of the funds defrayed in meeting that subsidiary's
liabilities since acquisition. These negotiations are not sufficiently advanced
for their outcome to be ascertained. However, the directors are confident that
the negotiations will result in sufficient funds being raised to meet the
Group's requirements for the foreseeable future and accordingly they have
prepared the financial statements on the basis that the Group is a going
concern. Nevertheless, the uncertainty over the final outcome of the
negotiations is fundamental to the preparation of the financial statements.

3        RECONSTRUCTED FINANCIAL STATEMENTS

As explained in Note 1, the Company acquired Prima on March 1, 1996. In 1997,
when the Company initially attempted to prepare financial statements for the
period ended June 30, 1996, it became apparent to the officers of the Company
that the accounting records or Prima had not been properly maintained and that
financial statements for the four months period March 1, 1996 through June 30,
1996 were not prepared in accordance with GAAP and were not of a quality subject
to audit. As a result, the auditor disclaimed an opinion on the Company's
financial statements for the period ended June 30, 1996. The disclaimed
auditor's opinion was included in the Form 10-KSB which was filed previously on
October 1, 1997. Subsequent to the filing of the annual report on October 1,
1997 on Form 10-KSB which included the financial statements and the disclaimed
audit opinion, the Prima management has been changed and the accounting records
and financial statements for the period from the date of acquisition, March 1,
1996, through June 30, 1996 have been reconstructed and prepared in accordance
with GAAP.

Also, on completing the financial statements for the period ended June 10, 1996
the officers of the company have re-assessed the fair value of acquisition of
Benatone Limited in accordance with GAAP. Since acquisition the company has been
unable to operate profitability and the company has been unsuccessful in
re-designing and application of patents acquired to other electrical items.
Consequently the officers of the company have decided to reduce the value of
shares issued for the acquisition of Benatone to $0.04 per share from $3.50 per
share to represent the fair value of the acquired company.

The reconstructed financial statements for the period ended June 30, 1996
reflected the following changes from the financial statements for the same
period which was included in the 10-KSB filed previously on October 1, 1997 with
the US SEC, and on which a disclaimed auditor's opinion was expressed:

    



                                      F-11
<PAGE>   33
J R CONSULTING INC.


   

For statement of operations:

<TABLE>
<CAPTION>
FINANCIAL STATEMENT               PER FINANCIAL STATEMENTS         PER RECONSTRUCTED                    CHANGE
LINE ITEMS                            SUBMITTED PREVIOUSLY      FINANCIAL STATEMENTS
                                                     $'000                     $'000                     $'000
<S>                                                  <C>                       <C>                          <C>
Net sales of products and                            1,536                     1,568                        32
services

Depreciation and amortization                          252                        49                      (203)

Net loss                                            (1,872)                   (1,701)                       171
</TABLE>


For balance sheet:


<TABLE>
<CAPTION>

FINANCIAL STATEMENT               PER FINANCIAL STATEMENTS       PER RECONSTRUCTED                      CHANGE
LINE ITEMS                            SUBMITTED PREVIOUSLY    FINANCIAL STATEMENTS
                                                     $'000                     $'000                     $'000

<S>                                                 <C>                         <C>                   <C>    
Goodwill and patents                                 3,894                       917                     (2,977)

Trade payables                                       1,371                     1,295                        (76)

Other current liabilities                              660                       610                        (50)

Additional paid in capital less                      4,875                     1,853                     (3,022)
discount

Retained deficit                                    (2,462)                   (2,291)                       171

Total shareholders equity                            2,882                        31                     (2,851)
</TABLE>
    



4        RECENTLY ISSUED ACCOUNTING STANDARDS
   
SFAS 128 "Earnings Per Share" is effective for financial statements issued for
periods ending after December 15, 1997. Under this standard, the Company will be
required to present basic and diluted earnings per share. Management believes
the adoption of this standard will have no material effect on the earnings per
share of the Company." SFAS 128 is required to be adopted for financial years on
or after December 15, 1997.
    


Statement of Financial Accounting Standards No. 125 "Accounting for Transfers
and Servicing of Financial Assets and Extinguishment of Liabilities", requires
that entities recognise the financial and servicing assets they control and
liabilities they have incurred, and derecognise assets when control has been
surrendered, and liabilities when extinguished. SFAS 125 is required to be
adopted for transactions entered into after December 31, 1997. The Company does
not expect the adoption of this Statement to have a significant impact on it's
financial statements.

   

Statement of Financial Accounting Standards No. 130 requires companies to
display comprehensive income with the same prominence as other financial
statements. Adoption of this pronouncement will not have a material effect on
the Company's financial position or results of operations. SFAS 130 is required
to be adopted for financial years on or after December 15, 1997.

    



                                      F-12
<PAGE>   34
J R CONSULTING INC.



   

Statement of Financial Accounting Standards No. 131 requires companies to
prepare certain disclosures per operating segment. An operating segment is
defined as the component whose results are regularly reviewed by the
enterprise's chief operating decision maker to make decisions about resources to
be allocated to the segment and assess it's performance. Adoption of this
pronouncement will not have a material effect on the Company's financial
position or result of operations. SFAS 131 is required to be adopted for
financial years on or after December 15, 1997.
    
   

In February of 1998, the Financial Accounting Standards Board issued SFAS No.
132, "Employers' Disclosures about Pensions and Other Postretirement Benefits."
This standard revises current disclosure requirements for employers' pensions
and other retiree benefits, eliminates certain disclosures which are no longer
useful and, to the extent practicable, standardizes disclosure for retiree
benefits. This standard is effective for financial statements issued for periods
ending after December, 1998, and will have no impact on the Corporation's
consolidated financial condition or results of operations.
    

5        OTHER RECEIVABLES

                                                      1995               1996
                                                      $'000              $'000
                                                      
     Advance to officer of subsidiary      (a)          --                237
     
     Other receivables                                  --                117
 
     Prepayments                                        --                 34
                                                     -----              -----
     Total other receivables
                                                        --                388
                                                     =====              =====


(a)  The advance to an officer of a subsidiary was repaid after the year end.


6        PROPERTY AND EQUIPMENT

                                   1995        1996
                                   $'000       $'000     Estimated useful lives

Motor vehicle                       --           30             4 years
Equipment                           --           90             5-10 years
Leasehold improvement               --           20             5 years
                                 -----        -----
                                    --          140
Less: accumulated depreciation      --          (17)
                                 -----        -----
                                    --          123
                                 =====        =====




Depreciation charged to income in the year ended June 30, 1995 and the year
ended June 30, 1996 was nil and $17,000 respectively.




                                      F-13
<PAGE>   35
J R CONSULTING INC.


7        INTANGIBLE ASSETS
   

The Group acquired patents held in Benatone. In addition, goodwill arising in
respect of the acquisitions during the year amounted to $717,000 (Note 11)
    

   

                       PRIMA      BENATONE     TOTAL
                      GOODWILL    GOODWILL    GOODWILL  PATENTS      TOTAL
                       $'000       $'000       $'000     $'000       $'000

On acquisition          717          --         717       232         949
Amortization            (16)         --         (16)      (16)        (32)
                      --------    --------    --------  -------      -----
                        701          --         701       216         917
                      ========    ========    ========  =======      =====

    


8        TRADE PAYABLES

                                                    1995             1996
                                                   $'000            $'000
   
Trade payables                                        --              811
Other payables                                        --               79
Accruals                                              --              405
                                                 -------          -------
                                                      --            1,295
                                                 =======          =======
    



9        OTHER CURRENT LIABILITIES

                                                    1995             1996
                                                   $'000            $'000
   
Bank loans                                            --               48
Loans from officers                                   --              149
Provision for legal claims                            --              413
                                                   -----            -----
                                                      --              610
                                                   =====            =====

    

The loans from officers represents advances made by officers of the Company
which are non interest bearing and have no definite repayment terms.



                                      F-14
<PAGE>   36
J R CONSULTING INC.



10       LONG TERM DEBT

                                                    1995             1996
                                                   $'000            $'000
 
Other loans                                           --               68
                                                 =======           ======


The other loans are unsecured, interest free and repayable on demand after 
July 1 1997.

11       ACQUISITIONS


                                                     PRIMA    BENATONE     TOTAL
                                                     $'000      $'000      $'000

Fair value of net assets acquired

  Property and equipment                               38         56         94
   
  Patents                                              --        232        232

  Inventories                                          --          5          5

  Receivable                                          440         --        440

  Prepaid expenses                                     12         --         12

  Security deposits                                    28         --         28

  Due from officer                                     50         --         50

  Accounts payable                                   (539)        --       (539)

  Accrued expenses                                   (103)        --       (103)

  Provision                                          (413)        --       (413)

  Loans                                                --       (252)      (252)

  Overdraft                                          (174)        --       (174)
                                                  -------    -------    -------

Net (liabilities)/assets                             (661)        41       (620)

Goodwill                                              717         --        717
                                                  -------    -------    -------

Consideration                                          56         41         97
                                                  =======    =======    =======


                                                                   CONSIDERATION
The consideration comprised:                                               $'000
Prima
  
  The issue of 363,551 shares, at $0.04 for shares in Prima                   15
  The issue of 1,029,526 shares, at $0.04 for debts due from Prima
  to its previous shareholders                                                41
                                                                         -------
                                                                              56


Benatone
  The issue of  1,020,932 shares, at $0.04                                    41
                                                                         -------
                                                                              97
                                                                         =======


    

                                      F-15
<PAGE>   37
J R CONSULTING INC.



   

In the case of Prima, further consideration may have been payable dependent on
Prima's financial performance, upto a maximum of $38,000 made up of 961,538
shares at $0.04 each. Also, in respect of Benatone, further consideration may
have been payable dependent on Benatone's financial performance, up to a maximum
of $2,356 made up of 58,900 shares at $0.04 each. In each case, the directors
are confident that no further consideration will be paid and none has been
included in the summary of consideration set out above.
    

12       INVESTMENT

On September 12 1995 the company acquired 21,390 Class B Ordinary shares of
Autokraft Limited, a company registered in the United Kingdom, representing 20%
of the equity of that company, but 50% of the voting rights, in exchange for
632,585 shares of common stock of the company. The Company also entered into an
agreement to purchase further shares in Autokraft but before this was completed,
a Receiver was appointed. In anticipation of Autokraft being wound up with no
distribution to shareholders, the value of the investment, which was reassessed
at $347,000 as shown below, has been fully written off in these financial
statements:

                                                                    $'000

Issue of 632,585 shares at $0.04 (note 14)                              25
Cash                                                                   322
                                                                   -------
                                                                       347
                                                                   =======

13       COMMITMENTS AND CONTINGENCIES

         (a)      Leasing arrangements

         Prima leased office space under a non-cancellable operating lease which
         expired in May 1996. Prima subsequently moved its office facilities and
         leases space on a month to month basis without a formal written lease
         agreement. Prima also leases certain equipment under non-cancellable
         operating leases which expire in June 1997. Future minimum payments of
         equipment under non-cancellable operating leases as of June 30, 1996
         amounted to $2,832. The rent expense for the four month period ended
         June 30, 1996 was $146,811 (1996 and 1995: nil).

         Prima is currently obligated under a non-cancellable operating lease
         which it entered into in September 1996 and runs through to October
         2007. The lease payments are subject to increases in accordance with
         the lease agreement based on fixed percentages and prevailing market
         rates in the future.

         Benatone entered into a non-cancellable operating lease for premises in
         February 1997 that runs for three years. This occurred after the
         previous cancellable lease arrangement had expired.


                                      F-16

<PAGE>   38
J R CONSULTING INC.



         Future minimum rental commitments for premises under such
         non-cancellable operating leases for the group are as follows:

                        June 30                                  Amount
                                                                  $'000

                         1997                                        91
                         1998                                        96
                         1999                                       101
                         2000                                       100
                         2001                                        98
                      Thereafter                                    621
                                                                 ------
                         Total                                    1,107
                                                                 ====== 
                                                                 
         (b)      Royalty

         Under an agreement dated September 7, 1995 the Group has a commitment
         to pay royalties of $0.0388 per electrical plug sold, continuing until
         the year 2011.

         (c)      Litigation

         Prima is a defendant in litigation with a financial lender (the
         "Lender") which was filed in February 1997. The Lender is claiming
         Prima is liable to settle debt amounting to $413,151 being the balance
         on a loan to a previous officer of Prima and which Prima had
         guaranteed. Under the arrangements for the acquisition of Prima, the
         previous officer had undertaken to settle the loan but has defaulted on
         the agreement. Prima is vigorously defending the lawsuit but provision
         has been made in the financial statements to the extent that the
         officers believe necessary.

         The company and Prima are also vigorously defending litigation brought
         by one of the co-defenders in the above lawsuit, in respect of the same
         matter.
   

         Mr Francis Vause has initiated legal proceedings against a subsidiary
         of J R Consulting Inc., Benatone Limited. He is claiming damages for
         breach of a consultancy agreement and non payment of royalties. The
         directors intend to defend the action vigorously and in their opinion
         no significant costs will arise.

    
                                      F-17
<PAGE>   39
J R CONSULTING INC.




14       COMMON STOCK AND ADDITIONAL PAID-IN CAPITAL
   

<TABLE>
<CAPTION>

                                                                                         Discount
                                                                                        on shares
                                                                     Common  Additional   issued
                                                                      stock   paid-in    below par
                                                                      at par  capital      value
                                                                      $'000    $'000       $'000

<S>                                                                    <C>       <C>       <C>  
At July 1, 1995, 5,368,822 shares                                      215       529       (154)

1,020,932 shares issued on acquisition of Benatone @ $0.04 (a)          41        --         --

632,585 shares issued for the investment in Autokraft @ $0.04 (a)       25        --         --

363,551 shares issued on acquisition of Prima @ $0.04 (a)               15        --         --

1,029,526 shares issued for debt due from Prima @ $0.04 (a)             41        --         --

Shares issued for cash

2,179,539 at $0.25 on September 15, 1995                                87       458         --

200,000 at $0.70 on March 6, 1996                                        8       132         --

150,000 at $1.00 on April 2, 1996                                        6       144         --
                                                                   -------   -------    -------

At June 30, 1996 10,944,955 shares                                     438     1,263       (154)

775,000 shares to be issued @ $1.00 (b)                                 31       744         --
                                                                   -------   -------    -------

At June 30, 1996 11,719,955 shares issued and outstanding              469     2,007       (154)
                                                                   =======   =======    =======
</TABLE>
    
   



(a)      The investment in Autokraft and the acquisitions of Benatone and Prima
         were completed at contract prices of $3.00, $3.00 and $2.60 per share
         respectively. However, the company has taken the opportunity of
         reassessing the fair value of the investment and of Benatone and Prima
         and has attributed par value of $0.04 per share in these financial
         statements.
    

(b)      The company has received cash in respect of shares which had not
         been formally issued at June 30, 1996 as follows:-

                                                         $'000

100,000 at $1.00 on December 22, 1995                     100
500,000 at $1.00 on March 5, 1996                         500
50,000 at $1.00 on April 29, 1996                          50
100,000 at $1.00 on April 29, 1996                        100
25,000 at $1.00 on June 20, 1996                           25
                                                      -------
                                                          775
                                                      =======


                                      F-18

<PAGE>   40

J R CONSULTING INC.



15       TAXATION

No tax payable arises in respect of the loss for the year. Tax losses available
for carry forward to offset against future trading profits amount to
approximately $1,681,000, including $291,000 in the United Kingdom. These give
rise to a potential deferred tax asset of $490,000. In view of the results for
the year and the uncertainty of benefit being derived from this asset in the
foreseeable future, a full valuation allowance has been made in respect of this
asset.
   

                                                      $'000

Total deferred tax asset
  Losses                                              1,681
  Less valuation allowance                            1,681
                                                    -------
                                                         --
                                                    =======

    

The Group has net operating loss carry forwards of approximately $1.4 million in
the USA which expire in the years 2009 through 2011.

16       NET LOSS PER SHARE
   

The primary net loss per share is calculated on the basis of the loss for the
year of $1,701,000 and a weighted average number of shares issued for the year
of 9,778,795 which includes the 775,000 shares to be issued (Note 14).
    

17       RELATED PARTY TRANSACTIONS

During the year the Group incurred consultancy costs of $20,000 payable to a
company in which G Harris, a director of the Company, has a material interest.

During the year the Group received cash advances, which remained outstanding at
the financial year end, from:
   

RELATED PARTY                          RELATIONSHIP                        $'000

D Lean                                 Director                              96
P Zachariou                            Director                              53

Minden Business Corporation            D Lean has a power of attorney        68
    




                                      F-19
<PAGE>   41
J R CONSULTING INC.



18       UNAUDITED PROFORMA INFORMATION

The proforma information set out below shows the Group's results for the two
years ended June 30, 1995 and 1996 incorporating Prima and Benatone as if they
had been part of the Group throughout that period. The figures include the
audited report results of the company for the year ended June 30, 1995 together
with the unaudited results of Prima for the two years ended June 30, 1995 and
1996 and the audited results of Benatone from the date of its incorporation
through June 30, 1996.

                                                1995              1996
                                             (UNAUDITED)       (UNAUDITED)

                                                $'000             $'000

Turnover                                        1,643             2,557
Operating costs                                (2,108)           (4,196)
                                           ----------        ----------
Operating loss                                   (465)           (1,639)
                                           ==========        ==========

Net loss per share                             $(0.09)           $(0.17)














                                      F-20

<PAGE>   42
J R CONSULTING INC.



19       SEGMENTAL INFORMATION BY SEGMENT AND GEOGRAPHIC SECTOR

The sales, profit before interest and tax and net operating assets of the
various activities of the Group are set out below:

        (a)       Sales
   

                                               1994          1995          1996
                                               $'000         $'000         $'000
SEGMENT

Model agency                                      --            --           583
Electrical accessories                            --            --           953
                                               -----         -----         -----
                                                  --            --         1,536
                                               =====         =====         =====

GEOGRAPHIC SECTOR

North America                                     --            --           583
United Kingdom                                    --            --           953
                                              ------         -----         -----
                                                  --            --         1,536
                                              ======         =====         =====



        (b)     Operating income before interest and tax

                                         1994          1995          1996
                                        $'000         $'000         $'000
SEGMENT

Model agency                               --            --          (611)
Electrical accessories                     --            --          (338)
Group overheads                            (2)          (10)         (393)
                                        -----         -----        ------
                                           (2)          (10)       (1,342)
                                        =====         =====        ======

GEOGRAPHIC SECTOR

North America                              (2)          (10)       (1,004)
United Kingdom                             --            --          (338)
                                        -----         -----        ------
                                           (2)          (10)       (1,342)
                                        =====         =====        ======

    


                                      F-21

<PAGE>   43
J R CONSULTING INC.

   


          (c)      Depreciation and amortization

                             1994             1995              1996
                            $'000            $'000             $'000
SEGMENT

Model agency                  --               --                18
Electrical accessories        --               --                17
Group overheads               --               --                14
                         -------          -------           -------
                              --               --                49
                         =======          =======           =======


GEOGRAPHIC SECTOR

North America                 --               --                32
United Kingdom                --               --                17
                         -------          -------           -------

                              --               --                49
                         =======          =======           =======


          (d)      Net asset/liabilities

                                            1995              1996
                                            $'000             $'000
SEGMENT

Model agency                                   --            (3,204)
Electrical accessories                         --              (517)
Group                                          --             3,752
                                          -------           -------
                                               --                31
                                          =======           =======


GEOGRAPHIC SECTOR

North America                                   -              548
United Kingdom                                  -             (517)
                                          -------          -------
                                                -               31
                                          =======          =======

    




















                                      F-22

<PAGE>   44


          (e)      Total assets
   

                                       1995            1996
                                      $'000            $'000
Segment

Model agency                            --             1,385
Electrical accessories                  --               333
Group                                   --               286
                                     -----             -----
                                        --             2,004
                                     =====             =====

Geographic sector

North America                           --             1,671
United Kingdom                          --               333
                                     -----             -----
                                        --             2,004
                                     =====             =====
    

20       POST BALANCE SHEET EVENT
   

In April 1997 the company consented to the entry against it of a permanent
injunction obtained by the SEC for the company's failure to file reports on a
timely basis. Up to April 1997, the Company had not filed timely with the SEC
the annual report on Form 10-KSB for the year ended June 30, 1996, nor the
interim reports on Form 10-QSB for the quarters ended September 30, 1996 and
December 31, 1996. Subsequent to the consent to the injunction, the Company
failed to file timely the interim report on Form 10-QSB for the quarter ended
March 31, 1997, the annual report on Form 10-KSB for the year ended June 30,
1997 and the interim reports on Form 10-QSB for the quarters ended September 30
and December 31, 1997. The Company can not yet determine the impact, if any, on
results of operations, financial positions, or cash flow of any penalties and
fines that may result from its violation of the SEC injunction at this time.
    





                                      F-23