SECURITIES AND EXCHANGE COMMISSION
                                              WASHINGTON, D.C. 20549

                                                    FORM 10-KSB

[x]     Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
 Act of 1934 [Fee Required]

For the fiscal year ended March 31, 1997

[ ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities 
Exchange Act of 1934 [No Fee Required]

For the transition period from                          to

Commission file number 33-61894-FW

                                             EMERGING BETA CORPORATION
                            (Exact name of small business issuer in its charter)

                         DELAWARE                                    72-1235450
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer
                                                        Identification No.)

                 220 Camp Street,
                 New Orleans, Louisiana                                   70130
           (Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code:               (504) 524-1801
                                                             -------------------

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

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

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

           Check if there is no disclosure  of delinquent  filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained,  to the best of  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: None

           The aggregate market value of the voting stock held by non-affiliates
of the  registrant as of March 31, 1997 was $300,000  based upon the sales price
of the Common Stock in the Company's public offering.

           The number of shares  outstanding  of the issuer's  classes of Common
Stock as of March 31, 1997:

Common Stock, $1.00 Par Value - 43,600 shares

                                    DOCUMENTS INCORPORATED BY REFERENCE:  NONE


<PAGE>



                                                      PART I

Item 1.   DESCRIPTION OF BUSINESS

History and Organization

 Emerging Beta Corporation ("Company") was incorporated in the State of Delaware
on February 10, 1993. Since  inception,  the primary activity of the Company has
been devoted to  organizational  activities and obtaining  initial funding.  The
Company  has only  engaged  in very  limited  preliminary  efforts  intended  to
identify  possible  merger or  acquisition  "targets" and has neither  conducted
negotiations  concerning,  nor entered  into a letter of intent for any possible
mergers or acquisitions.

Plan of Operation - General

 The Company was  organized  for the purpose of creating a corporate  vehicle to
seek, investigate and, if the results of such investigation warrants,  acquire a
business opportunity  presented to it by persons or firms who or which desire to
employ the Company's funds in their business or to seek the perceived advantages
of a publicly held corporation.  The Company will not restrict its search to any
specific  business,  industry  or  geographical  location,  and the  Company may
participate  in a  business  venture  of  virtually  any  kind  or  nature.  The
discussion of the proposed  business in this Item 1 is purposefully  general and
is not meant to be restrictive of the Company's virtually  unlimited  discretion
to search for and enter into potential business opportunities.

 The  Company's  proposed  business is  sometimes  referred to as a "blind pool"
because investors  entrust their investment  monies to the Company's  management
before they have a chance to analyze any  ultimate  use to which their money may
be put.  Consequently,  the Company's  potential success is heavily dependent on
the Company's  management,  which will have  virtually  unlimited  discretion in
searching  for and  entering  into a  business  opportunity.  The  officers  and
directors of the Companies have had limited  experience in the proposed business
of their respective Company. The Company has adopted a policy that all potential
business  opportunities  will first be presented to Emerging Alpha  Corporation,
until that  corporation  has entered  into a  definitive  merger or  acquisition
agreement,  and thereafter in the order of Emerging Beta  Corporation,  Emerging
Delta Corporation,  and finally Emerging Gamma Corporation.  As a result,  until
Emerging  Alpha  Corporation  has entered into a definite  merger or acquisition
agreement,  the remaining  companies will be dormant and not expend  significant
funds.  The only  exception  to this policy  would  occur if a Company,  such as
Emerging Alpha Corporation, had expended a substantial portion of its cash and a
business  opportunity  was presented  which  required the greater amount of cash
which  was held by  another  Company.  Although  management  believes  that each
Company  will be able to enter into a business  opportunity  within 12 months of
the close of this  offering,  there can be no assurance as to how much time will
elapse before a business opportunity is acquired. (See "Management.")

 Management anticipates that it may be able to participate in only one or two 
potential business venture,
due primarily to the Company's limited financing.  This lack of diversification
 should be considered a substantial
risk in investing in the Company because it will not permit the Company to 
offset potential losses from one venture
against gains from another.  (See "Risk Factors.")

 The Company  may seek a business  opportunity  with a firm which only  recently
commenced  operations,  or developing  companies in need of additional funds for
expansion into new products or markets,  or are seeking to develop a new product
or service, or are established  business which may be experiencing  financial or
operating  difficulties  and are in the need  for  additional  capital.  In some
instances,  a business  opportunity may involve the acquisition or merger with a
corporation which does not need substantial additional cash but which desires to
establish a public trading market for its common stock. The Company may purchase
assets and establish  wholly owned  subsidiaries in various business or purchase
existing businesses as subsidiaries.

 The Company  anticipates that the selection of a business  opportunity in which
to participate will be complex and extremely risky.  Because of general economic
conditions,  rapid  technological  advances being made in some  industries,  and
shortages  of available  capital,  management  believes  that there are numerous
firms seeking

                                                         2

<PAGE>



even the  limited  additional  capital  which the  Company  will have and/or the
benefits of a publicly traded corporation. Such perceived benefits of a publicly
traded  corporation  may include  facilitating  or improving  the terms on which
additional  equity  financing  may  be  sought,   providing  liquidity  for  the
principals of a business, creating a means for providing incentive stock options
or  similar  benefits  to  key  employees,   providing   liquidity  (subject  to
restrictions of applicable  statutes) for all  shareholders,  and other factors.
Potentially  available  business  opportunities  may  occur  in  many  different
industries and at various stages of development, all of which will make the task
of  comparative  investigation  and  analysis  of  such  business  opportunities
extremely difficult and complex.

 As is  customary  in the  industry,  the  Company  may pay a  finder's  fee for
locating an acquisition  prospect or a real estate prospect.  If any such fee is
paid,  it will be approved by the  Company's  Board of Directors  and will be in
accordance with the industry standards. Such fees are customarily between 1% and
5% of the size of the  transaction,  based  upon a sliding  scale of the  amount
involved. Such fees are typically in the range of 5% on a $1,000,000 transaction
ratably down to 1% in a $4,000,000 transaction.  Management has adopted a policy
that such a finder's  fee or real estate  brokerage  fee will not be paid to any
employee,   officer,  director  or  5%  shareholder  of  the  Company  or  their
affiliates,  including  Chaffe & Associates,  Inc.  Should the Company acquire a
sizable business opportunity, the entire remaining proceeds of this offering may
be paid as a finder's  fee.  No finder's  fee will be paid to Cullen  Investment
Group, Ltd., unless approved beforehand by the NASD.

 Management believes the Company will offer owners of business opportunities the
opportunity to acquire a controlling  ownership  interest in a public company at
substantially  less cost than is required to conduct an initial public offering.
The  owners of the  business  opportunities  will,  however,  incur  significant
post-merger or acquisition registration costs in the event they wish to register
a portion of their shares for subsequent sale.

 The  Company  will  also  incur  significant  legal  and  accounting  costs  in
connection with the acquisition of a business opportunity including the costs of
preparing post-effective  amendments,  Forms 8-K, agreements and related reports
and documents  nevertheless,  the officers and directors of the Company have not
conducted  market  research  and are not aware of  statistical  data which would
support the perceived  benefits of a merger or acquisition  transaction  for the
owners of a business opportunity.

 The Company will not make any loans to any  prospective  merger or  acquisition
candidates or to unaffiliated third parties.

Evaluation of Opportunities

 The analysis of new business  opportunities  will be undertaken by or under the
supervision  of the  officers and  directors of the Company (see  "Management").
Management   intends  to  concentrate  on   identifying   prospective   business
opportunities which may be brought to its attention through present associations
with management.  In analyzing  prospective business  opportunities,  management
will consider such matters as the available technical,  financial and managerial
resources;  working  capital  and  other  financial  requirements;   history  of
operation,  if any; prospects for the future;  present and expected competition;
the quality and experience of management services which may be available and the
depth of that  management;  the potential for further  research,  development or
exploration;  specific  risk factors not now  foreseeable  but which then may be
anticipated to impact the proposed activities of the Company;  the potential for
growth or expansion;  the potential for profit; the perceived public recognition
or  acceptance  of  products,  services  or  trades;  name  identification;  the
potential  eligibility of the Company for listing on the NASDAQ system and other
relevant  factors.  Officers and  directors of the Company will meet  personally
with   management  and  key  personnel  of  the  firm  sponsoring  the  business
opportunity as part of their investigation.  To the extent possible, the Company
intends to utilize  written reports and personal  investigation  to evaluate the
above factors.  The Company will not acquire or merge with any company for which
audited financial statements cannot be obtained.

 Currently,  NASDAQ's  quantitative  listing  requirements are 300 shareholders,
tangible net worth of at least $2,000,000,  total assets of at least $4,000,000,
and a trading price of at least $3.00 per share.  There can be no assurance that
management  will be able to locate a business  opportunity  which meets NASDAQ's
quantitative  criteria nor that the  Company's  Common Stock will meet  NASDAQ's
qualitative criteria for listing.

                                                         3

<PAGE>




 It may be anticipated  that any  opportunity in which the Company  participates
will present certain risks. Many of these risks cannot be adequately  identified
prior to selection  of the  specific  opportunity,  and  investors  herein must,
therefore,  depend on the ability of  management  to identify and evaluate  such
risk. In the case of some of the opportunities  available to the Company, it may
be  anticipated  that the promoters  thereof have been unable to develop a going
concern or that such  business  is in its  development  stage in that it has not
generated  significant  revenues from its principal business activities prior to
the  Company's  participation.  There  is  a  risk,  even  after  the  Company's
participation  in the  activity  and the related  expenditure  of the  Company's
funds,  that the  combined  enterprises  will  still be unable to become a going
concern or advance beyond the development  stage.  Many of the opportunities may
involve new and untested products, processes, or market strategies which may not
succeed.  Such  risks  will  be  assumed  by the  Company  and,  therefore,  its
stockholders.

 The Company will not restrict its search for any specific kind of business, but
may acquire a venture which is in its preliminary or development stage, which is
already in operation,  or in essentially  any stage of its corporate life. It is
currently  impossible to predict the status of any business in which the Company
may become  engaged,  in that such  business may need  additional  capital,  may
merely desire to have its shares  publicly  traded,  or may seek other perceived
advantages which the Company may offer.

Acquisition of Opportunities

          In implementing a structure for a particular business acquisition, the
Company  may become a party to a merger,  consolidation,  reorganization,  joint
venture, franchise or licensing agreement with another corporation or entity. It
may also purchase stock or assets of an existing  business.  On the consummation
of a transaction, it is possible that the present management and shareholders of
the Company  will not be in control of the Company.  In addition,  a majority or
all of the  Company's  officers and  directors  may, as part of the terms of the
acquisition  transaction,  resign and be replaced by new officers and  directors
without a vote of the  Company's  shareholders.  The Company  does not intend to
obtain  the  approval  of  Company   stockholders   prior  to  consummating  any
acquisition.  Management  does not  intend  to sell any  shares  held by them in
connection with a business acquisition.

          It  is   anticipated   that  any   securities   issued   in  any  such
reorganization would be issued in reliance on exemptions from registration under
applicable Federal and state securities laws. In some circumstances, however, as
a negotiated element of this transaction, the Company may agree to register such
securities  either at the time the  transaction  is  consummated,  under certain
conditions,  or at  specified  time  thereafter.  The  issuance  of  substantial
additional securities and their potential sale into any trading market which may
develop  in the  Company's  Common  Stock may have a  depressive  effect on such
market.  While the actual terms of a  transaction  to which the Company may be a
party cannot be  predicted,  it may be expected that the parties to the business
transaction  will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so called "tax free" reorganization under
Sections  368(a)(1) or 351 of the Internal Revenue Code of 1986, as amended (the
"Code").  In order to  obtain  tax free  treatment  under  the  Code,  it may be
necessary  for the  owners of the  acquired  business  to own 80% or more of the
voting stock of the surviving  entity.  In such event,  the  shareholders of the
Company, including investors in this offering, would retain less than 20% of the
issued and  outstanding  shares of the surviving  entity,  which could result in
significant dilution in the equity of such shareholders.  The Company intends to
structure a merger or  acquisition  in such  manner as to  minimize  federal and
state tax consequences to the Company and to any target company.

          As part of the Company's investigation,  officers and directors of the
Company will meet personally  with  management and key personnel,  may visit and
inspect  material  facilities,  obtain  independent  analysis or verification of
certain information  provided,  check reference of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise.

          The manner in which the Company  participates  in an opportunity  will
depend on the nature of the opportunity, the respective needs and desires of the
Company and other parties,  the management of the opportunity,  and the relative
negotiating strength of the Company and such other management.



                                                         4

<PAGE>



          With respect to any mergers or acquisitions,  negotiations with target
company  management  will be expected to focus on the  percentage of the Company
which  target  company   shareholders   would  acquire  in  exchange  for  their
shareholdings  in the target company.  Depending upon,  among other things,  the
target company's assets and liabilities,  the Company's shareholders will in all
likelihood hold a lesser percentage  ownership interest in the Company following
any  merger  or  acquisition.   The  percentage  ownership  may  be  subject  to
significant  reduction in the event the Company  acquires a target  company with
substantial  assets.  Any merger or  acquisition  effected by the Company can be
expected to have a significant  dilutive effect on the percentage of shares held
by the Company's then shareholders,  including purchasers in this offering. (See
"Risk Factors.")

          There can be no assurance that any Company will have sufficient  funds
to undertake any significant  development,  marketing and  manufacturing  of any
products which may be acquired.  Accordingly,  following the  acquisition of any
such  product,  the Company may be  required to either seek  additional  debt or
equity financing or obtain funding from third parties, in exchange for which the
Company  would  probably  be required  to give up a  substantial  portion of its
interest in any acquired product. There is no assurance that the Company will be
able  either to  obtain  additional  financing  or  interest  third  parties  in
providing  funding for the further  development,  marketing and manufacturing of
any products acquired.

          It  is  anticipated  that  the   investigation  of  specific  business
opportunities   and  the   negotiation,   drafting  and  execution  of  relevant
agreements,  disclosure documents and other instruments will require substantial
management time and attention and substantial  costs for accountants,  attorneys
and others.  If a decision  is made not to  participate  in a specific  business
opportunity the costs therefore incurred in the related  investigation would not
be  recoverable.   Furthermore,   even  if  an  agreement  is  reached  for  the
participation in a specific business opportunity, the failure to consummate that
transaction may result in the loss to the Company of the related costs incurred.

Competition

          The Company will remain an insignificant participant among firms which
engage in  business  combinations  with,  or  financing  of,  development  stage
enterprises.  There are many  established  management  and financial  consulting
companies and venture capital firms which have  significantly  greater financial
and personnel resources, technical expertise and experience than the Company. In
view of the Company's limited financial  resources and management  availability,
the Company will continue to be a significant competitive  disadvantage vis-avis
the Company's competitors.

Investment Company Act

          The  Company  may   participate   in  a  business  or  opportunity  by
purchasing,  trading,  or selling the securities of the business.  However,  the
Company  does not intend to engage  primarily  in these  activities,  and is not
registered as an "investment  company" under the Investment  Company Act of 1940
(the "Investment  Company Act"). The Company believes that such  registration is
not  required.  The  Company  intends to conduct its  activities  to avoid being
classified as an "investment  company" under the Investment  Company Act, and to
avoid  application  of  the  costly  and  restrictive   registration  and  other
provisions  of the  Investment  Company  Act  and  the  regulations  promulgated
thereunder.

          Section 3(a) of the  Investment  Company Act sets forth the definition
of an  "investment  company"  which  excludes  an entity  which  does not engage
primarily in the business of investing,  reinvesting,  or trading in securities,
or which does not engage in business of investing,  owning,  holding, or trading
"investment  securities"  (defined as "all  securities  other than United States
government  securities or securities of majority-owned  subsidiaries") the value
of which  exceeds  40% of the value of its total  assets  (excluding  government
securities,  cash, or cash items). The Company intends to implement its business
plan in a manner  which will result in its falling  outside  the  definition  of
"investment company." Consequently, the Company's participation in a business or
opportunity  through the  purchase  and sale of  investment  securities  will be
limited. In order to avoid  classification as an investment company, the Company
will use a major  portion of the net  proceeds  of this  offering to search for,
analyze,  and acquire or  participate  in a business or  opportunity by use of a
method  which does not involve  the  acquisition  of  investment  securities  as
defined in the Investment Company Act.

                                                         5

<PAGE>




          Implementation  of  the  Company's  business  plan,  especially  if it
involves a business reorganization as discussed above, may necessitate change in
the Company's capital  structure,  management,  control,  and business.  Each of
these areas are regulated by the Investment  Company Act,  which  regulation has
the purported purpose of protecting purchasers of investment company securities.
Since the Company will not register as an  investment  company,  the  purchasers
will not be afforded these protections.

          The  Company  may take  advantage  of the  provision  set forth in the
Investment  Company  Act which  allows an entity a  one-time  option  during any
three-year period to claim an exemption as a "transient" investment company. The
necessity  of  asserting  any such  resistance  or making any claim of exemption
could be time consuming and costly, given the Company's limited resources. There
is no assurance that such classification could be successfully avoided.

          Neither the Company nor its officers or directors  are  registered  as
investment  advisers  under the  Investment  Advisers Act of 1940 (the "Advisers
Act").  The Company and these  individuals  do not have  authority to pursue any
course of  business  or conduct as that term is  defined  in the  Advisers  Act.
Company  management  believes that registration is not required and that certain
exemptions to the  registration  provisions  of the Advisers Act are  available,
including the  exemptions  for persons who may render advice to a limited number
of other persons and who may advise other persons located only within one state.

Employees and Consultants

          The Company's  only employees at the present time are its officers and
directors,  who will devote as much time as the Board of Directors  determine is
necessary to carry out the affairs of the Company.  The Company has  allocated a
portion of the  proceeds of this  offering  for payment of expenses  incurred in
connection  with a business  combination,  financing  transaction or purchase or
exchange of assets.  Such expenses may include business,  financial finder's fee
and real estate commissions required to be paid by the Company. The Company will
not pay any such fees to the  Underwriter  or to any other NASD member  involved
with the Company's  public  offering,  unless  approved  beforehand by the NASD,
although  the Company may pay Chaffe &  Associates,  Inc.  for services of staff
analysts   and  for   clerical   services.   (See   "Management"   and  "Certain
Transactions.")

Item 2.   DESCRIPTION OF PROPERTY

          The Company  presently  maintains its principal offices at the offices
of Chaffe &  Associates,  which is an affiliate of its  principal  stockholders,
located at 220 Camp Street,  New Orleans,  Louisiana  70130 where its  telephone
number is (504)  524-1801.  The office space is supplied at no cost. The Company
reimburses Chaffe & Associates for its charges for long distance telephone calls
and other  miscellaneous  expenses  of  secretarial,  photocopying  and  similar
expense.

Item 3.   LEGAL PROCEEDINGS

          Not Applicable.

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

          No matters  were  submitted to a vote of security  holders  during the
fourth quarter of the fiscal year ended March 31, 1997.

                                                         6

<PAGE>



                                                      PART II


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

         The Company's Common Stock has not traded.  As of March 31, 1997, there
were 339  stockholders  of  record.  No  dividends  have  been paid and none are
expected to be paid in the foreseeable future.

Item 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

          Selected Financial Information

          The following  sets forth selected  financial  information as of March
31, 1993,  1994,  1995,  1996,and  1997, and is qualified in its entirety by the
financial  statements  appearing  elsewhere in this Report. The Company's fiscal
year end is March 31st.
<TABLE>
<CAPTION>

                                                Balance Sheet Data


                                      March 31,     March 31,         March 31,     March 31,      March 31,
                                        1993          1994              1995          1996            1997



<S>                                 <C>            <C>             <C>            <C>             <C>          
Cash..............................  $    13,000    $   296,056     $   301,608    $    297,673    $     290,600
Organizational Costs..............        1,400          1,400           1,120             840              560
Total Assets......................       14,400        298,338         302,768         298,692          292,687
Total Liabilities.................        1,400          1,199           2,864           2,026            1,050
Stockholders' Equity..............       13,000        297,139         299,864         296,666          292,197

</TABLE>

            The  Company  has been  recently  formed and has not  engaged in any
operations  other than  organizational  matters.  The Company  earned $11,820 in
interest  income during 1995,  $21,121 in 1996,  and $15,818 in 1997. In January
1995,  the  Company  engaged a director  to provide  consulting  services to the
Company at the rate of $1,250 per month,  or $3,750  during the 1995 fiscal year
and $15,000 in the 1996 fiscal year. In fiscal 1997 the amount paid was $13,500.
It is anticipated that the amount in fiscal 1998 will $9,000.

Item 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

            The consolidated  financial statements of the Company required to be
included in Item 7 are set forth in the Financial Statements Index.

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

            Not Applicable.

                                                         7

<PAGE>



                                                     PART III

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

Directors and Executive Officers

            Directors  are  elected  to  serve  until  the  annual   meeting  of
shareholders  and until their  successors  have been elected and have qualified.
Officers  are  appointed  to serve,  subject to the  discretion  of the Board of
Directors,  until the  meeting  of the Board  following  the  annual  meeting of
shareholders  and until their  successors  have been elected and have qualified.
All directors and officers have held their positions since  inception,  with the
exception of Mr. Jarrell, who was elected in 1994.

Name                     Age           Office with the Company

Burt H. Keenan            57            President and Chief Financial Officer 
                                        and Director

D. B. H. Chaffe III       63            Director

Daniel B. Killeen         63            Secretary and Director

Jerry W. Jarrell          55            Director

           Each officer and director  will devote only such time to the business
affairs of the Company as he deems  appropriate,  as discussed under the caption
"Executive  Compensation," estimated at an average of approximately 20- 30 hours
per officer and director for each quarter.  Management does not intend to devote
any significant amount of time to any Company until an acquisition candidate has
been preliminarily identified and a letter of intent is being negotiated between
the Company and the acquisition candidate.

           Burt H. Keenan has been an associate with Chaffe & Associates,  Inc.,
an investment banking firm located in New Orleans,  Louisiana,  since 1987. From
1969 to 1986,  Mr.  Keenan  was the  Chairman  and Chief  Executive  Officer  of
Offshore Logistics, Inc., a public oil and gas service company operating a fleet
of marine service vessels and helicopters worldwide.  Mr. Keenan was a member of
the  National  Advisory  Council  on  Oceans  and  Atmosphere,   a  presidential
commission, and various industry associations.  Mr. Keenan received Bachelor and
Masters degrees in business administration from Tulane University. Mr. Keenan is
a director of Telescan, Inc.

           Daniel B. Killeen has been an associate professor in information 
systems in the A. B. Freeman School
of Business at Tulane University since 1983.  From 1967 to 1983, he was Director
 of Computing at the University,
responsible for all computing activities and a staff of fifty.  Mr. Killeen
 performs consulting work for business and
industry throughout the Gulf South.  Mr. Killeen has received degrees in Physics
 and a Ph.D in Engineering, and
is affiliated with several honorary business and scientific societies.  He is a 
registered Louisiana professional
engineer.

           D. B. H. Chaffe III has been President and Chief Executive Officer of
 Chaffe & Associates, Inc., an
investment banking firm located in New Orleans, Louisiana, since 1982.  From 
1981 to 1985, Mr. Chaffe was
President, Chief Executive Officer and Treasurer of Becker & Associates, Inc., a
 marine contracting firm, following
a leveraged buy-out by Mr. Chaffe and two other individuals.  From 1971 to 1981,
 he was Executive Vice President
and Director of Howard, Weil, Labouisse, Friedrichs Incorporated and the head of
 corporate finance at this regional
investment banking firm.  From 1969 to 1971, he was a general partner of Howard,
 Weil, Labouisse, Friedrichs &
Company.  Prior to 1969 Mr. Chaffe was a registered representative and a
principal of investment banking firms.
He has served on advisory committees and has been a member of National 
Securities Associations and stock
exchanges.  Mr. Chaffe received a Bachelors degree in Engineering from Tulane
University.  Mr. Chaffe is a director
of Telescan, Inc.


                                                         8

<PAGE>



           Jerry W. Jarrell  currently  manages several joint ventures in Mexico
and Alaska for Offshore  Logistics,  Inc. He was Chief Financial Officer for the
Woodson Companies,  an oil field construction company, from 1977 to 1990. During
1971 to 1977, he was secretary, treasurer and controller for Offshore Logistics,
Inc., a major marine and aviation service  company.  He was with Arthur Andersen
and Company, where he was a Certified Public Accountant from 1966 to 1971, prior
to  joining  Offshore  Logistics.  He earned a B.S.  degree in  accounting  from
Louisiana Tech University.

Conflicts of Interest

           Certain  conflicts of interest  now exist and will  continue to exist
between the Company and its officers and directors due to the fact that each has
other business interests to which he devotes his primary attention. Each officer
and director may continue to do so notwithstanding the fact that management time
should be devoted to the  business of the  Company.  No officer,  director or 5%
greater  stockholder  of any  Company is an  officer,  director or 5% or greater
stockholder  of any other blind  pool/blank  check  company  other than Emerging
Alpha Corporation, Emerging Delta Corporation and Emerging Gamma Corporation.

           Upon  presentation  of  a  business  opportunity  to  each  Company's
officers  and  directors,  such  persons  may face a  conflict  of  interest  in
determining  which of the Companies will receive the business  opportunity.  The
Companies have adopted a policy that all potential  business  opportunities will
first be presented to Emerging Alpha  Corporation,  until that  corporation  has
entered into a definitive merger or acquisition agreement, and thereafter in the
order of Emerging Beta  Corporation,  Emerging  Delta  Corporation,  and finally
Emerging Gamma  Corporation.  The only exception to this policy would occur if a
Company, such as Emerging Alpha Corporation,  had expended a substantial portion
of its cash and a business  opportunity was presented which required the greater
amount of cash which was held by another Company.

           The  Company  has not  established  policies  or  procedures  for the
resolution  of other  current or potential  conflicts  of interests  between the
Company,  its officers and  directors or  affiliated  entities.  There can be no
assurance that management will resolve all conflicts of interest in favor of the
Company,  and failure by  management  to conduct the  Company's  business in the
Company's best interest may result in liability to the management.  The officers
and directors are  accountable to the Company as  fiduciaries,  which means that
they are required to exercise good faith and integrity in handling the Company's
affairs. Shareholders who believe that the Company has been harmed by failure of
an officer or director to  appropriately  resolve any conflict of interest  may,
subject to applicable rules of civil procedure,  be able to bring a class action
or derivative suit to enforce their rights and the Company's rights.

           Chaffe  &  Associates,  Inc.,  which  is  affiliated  with two of the
Company's officers and directors,  may be a source of business opportunities for
the Company.  The Company does not intend to acquire any business opportunity of
which with any officer, director, or 5% or greater shareholder of the Company is
also an officer, director, or 5% or greater shareholder.  In the event that such
a related party  transaction is contemplated,  the Company will first obtain the
approval  of  a  majority  of  the  Company's   stockholders   excluding   those
stockholders who have a financial interest in the transaction.

Indemnification

           The Delaware Supreme Court has held that directors' duty of care to a
corporation and its stockholders  requires the exercise of an informed  business
judgment.   Having  become  informed  of  all  material  information  reasonably
available to them,  directors  must act with  requisite care in the discharge of
their duties. The Delaware General Corporation Law permits a corporation through
its  certificate of  incorporation  to exonerate or indemnify its directors from
personal  liability to the corporation or its  stockholders for monetary damages
for breach of fiduciary duty of care as a director, with certain exceptions. The
Companies have adopted these exoneration and  indemnification  provisions in the
Delaware   General   Corporation  Law  in  their   respective   certificates  of
incorporation and bylaws. The exceptions include a breach of the director's duty
of loyalty,  acts or omissions  not in good faith or which  involve  intentional
misconduct or knowing violations of law, improper declarations of dividends, and
transaction from which the directors derived an improper  personal benefit.  The
Company's Certificate of Incorporation exonerates its directors,  acting in such
capacity, from monetary liability to the extent permitted by this

                                                         9

<PAGE>



statutory provision.  The limitation of liability provision does not eliminate a
stockholder's  right  to  seek  non-monetary,  equitable  remedies  such  as  an
injunction  or recision to redress an action taken by directors.  However,  as a
practical matter, equitable remedies may not be available in all situations, and
there may be instances in which no effective remedy is available.

           The extent to which the  indemnification  provisions  of the Delaware
General  Corporation Law and the Companies'  certificates of  incorporation  and
bylaws provide  indemnification  to officers and directors for violations of the
federal  securities laws has not been settled by court precedent.  The Companies
understand that, in the position of the Securities and Exchange Commission, such
indemnification is against public policy and is unenforceable.

Item 10. EXECUTIVE COMPENSATION

           No  compensation  has been paid or accrued to any officer or director
of the Company to date. Each officer and director may be paid on an hourly basis
for actual hours devoted to the Company's  business,  and will be reimbursed for
his actual  out-of-pocket  expenses for  telephone,  reproduction,  travel,  and
miscellaneous  items. No hourly  compensation has been determined as of the date
of this Report,  and any hourly  compensation will be determined  arbitrarily by
the  Company's  board of  directors  based on its  opinion  of the value of such
services,  and will not be based on current  compensation  levels for employment
outside  of  the  Company  or  other  such  measurements.   The  terms  of  such
compensation will not be determined in arm's length negotiation. The Company has
no retirement,  pension,  profit sharing, or insurance or medical  reimbursement
plans covering its officers and directors, and does not contemplate implementing
any such plan at this time.

           Except as noted above and under "Certain  Transactions,"  the Company
has no  agreement  or  understanding,  express or  implied,  with any officer or
director,  or  any  other  person  regarding  employment  with  the  Company  or
compensation for services.  Compensation of officers and directors is determined
by the Company's board of directors and is not subject to stockholder  approval.
See "Use of Proceeds."

           On  acquisition  of a business  opportunity,  current  management may
resign and be  replaced  by persons  associated  with the  business  opportunity
acquired,  particularly if the Company participates in a business opportunity by
effecting a reorganization, merger or consolidation as discussed under "Business
Plan." If any member of current  management  remains after  effecting a business
opportunity  acquisition,  that member's time commitment will likely be adjusted
based on the nature and method of the  acquisition  and location of the business
which cannot be predicted.
See "Business Plan."

           The Company has granted a total of 4,300  options to purchase  Common
Stock under its 1993 Stock  Option  Plan,  as  follows:  Burt H.  Keenan,  2,600
shares; D.B.H. Chaffe, III, 1,200 shares; and Daniel B. Killeen, 500 shares. The
options are exercisable at $15.00 per share at any time until December 31, 1999.
On February 15, 1994 the Company  issued  Jerry W.  Jarrell  options to purchase
2,000  shares at $12.00  per share at any time until  December  31,  1999.  (See
"Stock Option Plan.")

Office Use

           The Company  currently shares a portion of approximately  3900 square
feet of office  space at 220 Camp  Street,  New  Orleans,  Louisiana  70130 with
Chaffe & Associates,  Inc., an affiliate of the Company.  There is no charge for
said space.  The Company  believes  that such space will be adequate  until such
time as a business opportunity is selected.

           There is no arrangement or understanding between any of the directors
or officers of any of the four Companies and any other person  pursuant to which
any director or officer was or is to be selected as a director or officer.



                                                        10

<PAGE>



Item 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The following table sets forth, as of March 31, 1997, the stock ownership of
all persons  known to own  beneficially  five  percent or more of the  Company's
Common Stock and all directors and officers of the Company,  individually and as
a group.  Each  person  has sole  voting  and  investment  power over the shares
indicated, except as noted.
<TABLE>
<CAPTION>

                                           Number of Shares
                                            of Common Stock
                                             Beneficially
Names and Addresses                              Owned                       Percent



<S>                                              <C>                              <C>
Burt H. Keenan(1)                                11,350                           26%

D. B. H. Chaffe III(2)                            4,320                          9.9%

Daniel B. Killeen(3)                                760                          1.7%

Jerry W. Jarrell(4)                               2,125                          4.9%

All Officers and
Directors as a Group:
(4 persons)(5)                                   18,555                         42.5%
                                                 ------                         -----

</TABLE>

(1)     Includes Shares issuable upon exercise of options to purchase 2,600
shares of Common Stock.

(2)     Includes Shares issuable upon exercise of options to purchase 1,200 
shares of Common Stock.

(3)     Includes Shares issuable upon exercise of options to purchase 500 shares
 of Common Stock.

(4)     Includes Shares issuable upon exercise of options to purchase 2,000
 shares of Common Stock.

(5)     Includes Shares issuable as set forth in Notes 1, 2, 3 and 4 above.

Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        The Company has an oral agreement with Jerry W. Jarrell, a director,  to
provide consulting  services to the Company.  The agreement,  which commenced on
January 1, 1995, is for a term of 24 months and provides for $1,250 compensation
per month,  plus a one-time  grant of options to purchase 2,000 shares of Common
Stock at $12.00 per share.  On January 1, 1997 the agreement was renewed but the
compensation reduced to $750 per month.
See "Stock Option Plan" below.

        The Company has an oral agreement  with Chaffe & Associates,  Inc. ("C &
A"),  a firm  affiliated  with two of its  officers  and  directors,  to perform
certain services after the closing of the offering. Secretarial services will be
charged at $20 per hour,  and the services of staff  analysts will be charged to
rates ranging from $60 to $100 per hour. The total amount of charges  payable in
any month cannot be estimated at this time and depend upon the complexity of any
opportunity  investigated;  however, each Company intends to expend only $10,000
of the net  proceeds  received  by it from  this  offering  to pay  expenses  of
investigating and evaluating business opportunities,  and therefore, the maximum
amount  anticipated  to be payable to C & A would be $10,000  per  Company.  The
Company  has each  adopted a policy  not to  compensate  C & A for any  services
(other than secretarial  services) in connection with a transaction  between any
Company and an existing C & A client.  C & A's services (other than  secretarial
services)  will not be engaged by any Company  until after a letter of intent is
being negotiated between a Company

                                                        11

<PAGE>



and the potential acquisition candidate.  Since Messrs. Chaffe and Keenan are
 officers and directors of each
Company, and respectively the principal stockholder and an associate of C & A,
 any consulting fees paid to C &
A can be expected to indirectly benefit Messrs. Chaffe and Keenan.

        C & A is engaged in financial consulting and advisory services,  mergers
and acquisitions,  corporate restructuring and financing, management consulting,
valuation of private  companies  and private  placements  of  corporate  debt. A
wholly owned subsidiary of C & A, Chaffe Securities,  Inc., is a registered NASD
broker-dealer, but does not participate in public offerings nor engage in retail
securities  transactions.  Chaffe  Securities,  Inc.  receives only advisory and
transaction  fees for  transactions in securities of privately held companies or
those with limited  public  markets and has been involved in one  transaction in
each of the two prior calendar years.

        C & A may be the  source  for a business  opportunity  submitted  to the
Company.  Although no present  clients of C & A have been identified as possible
acquisition candidates,  it is possible that a client of C & A will enter into a
business  acquisition  with the  Company.  Although C & A will not  receive  any
compensation in connection with any  acquisition,  the officers and directors of
the Company may face a conflict of interest in any transaction effected with a C
& A client. See "Management - Conflicts of Interest." C & A has not entered into
any  contract  or  agreement  with any  private  company  to  obtain a merger or
acquisition with a blind pool/blank check company such as the Companies.

        Through March 31, 1995, the Company did not pay any amounts to C & A. In
fiscal 1996 and 1997 the amounts paid were $3,481 and $112, respectively.  It is
not  anticipated  that no  additional  amounts  will  be paid to C & A until  an
acquisition is identified.

        In connection  with  organizing the Company,  persons  consisting of its
officers,  directors  and other  individuals  paid an aggregate of $13,000.00 in
cash to  purchase a total of 13,000  shares of Common  Stock at a sales price of
$1.00 per share.  Under Rule 405  promulgated  under the Securities Act of 1933,
such stockholders may be deemed to be promoters of the Company.

        All  shares  of  Common  Stock  presently  issued  and  outstanding  are
"restricted securities" as that term is defined under the Securities Act and may
not be sold in the absence of  registration  or exemption  under the  Securities
Act.  Under  current law, the shares  cannot be sold for two years from the date
they are purchased, and then only under limited circumstances.  See "Description
of Securities."

Stock Option Plan

        The Company,  by resolution of its Board of Directors and  stockholders,
adopted a 1993 Stock Option Plan (the  "Plan") on February  16,  1993.  The Plan
enables  each  Company  to offer  an  incentive  based  compensation  system  to
employees,  officers and directors and to employees of companies who do business
with the Company.

        In the  discretion of a committee  comprised of  non-employee  directors
(the "Committee"), directors, officers, and key employees of the Company and its
subsidiaries  or  employees of  companies  with which the Company does  business
become  participants  in the Plan  upon  receiving  grants  in the form of stock
options or restricted  stock.  A total of 2,000,000  shares are  authorized  for
issuance  under the Plan,  of which  4,300  shares are  issuable  under  options
granted to  officers  and  directors  at $15.00 per share,  and 2,000  shares as
issuable  under  options  granted  to  a  director  of  $12.00  per  share,  all
exercisable  until  December  31,  1999.  The  Company  does not intend to grant
additional  options  until  such  time  as a  merger  or  acquisition  has  been
consummated.  The  Company  may  increase  the number of shares  authorized  for
issuance  under the Plan or may make other  material  modifications  to the Plan
without  shareholder  approval.  However,  no amendment  may change the existing
rights  of  any  option  holder.   Currently,   each  Company's  Certificate  of
Incorporation  authorizes  the issuance of only 200,000  shares of Common Stock,
but the  shareholders  and Board of Directors have approved an increase to up to
20,000,000 shares of Common Stock.

        Any shares  which are  subject to an award but are not used  because the
terms and  conditions  of the award are not met, or any shares which are used by
participants to pay all or part of the purchase price of any option may again be
used for awards  under the Plan.  However,  shares with respect to which a stock
appreciation right has been

                                                        12

<PAGE>



exercised may not again be made subject to an award.

        Stock options may be granted as non-qualified stock options or incentive
stock  options,  but incentive  stock options may not be granted at a price less
than 110% of the fair market value of the stock as of the date of grant (110% as
to any 10%  shareholder at the time of grant);  non-qualified  stock options may
not be granted at a price less than 85% of fair market  value of the stock as of
the  date of  grant.  Restricted  stock  may not be  granted  under  the Plan in
connection with incentive stock options.

        Stock  options  may be  exercised  during a period of time  fixed by the
Committee except that no stock option may be exercised more than ten years after
the date of grant or three years after death or disability,  whichever is later.
In the discretion of the Committee, payment of the purchase price for the shares
of stock  acquired  through the  exercise of a stock option may be made in cash,
shares of the Company's Common Stock or by delivery or recourse promissory notes
or a combination  of notes,  cash and shares of the Company's  Common Stock or a
combination  thereof.  Incentive  stock options may only be issued to directors,
officers and employees of the Company.

        Stock  options  may be granted  under the Plan may  include the right to
acquire an Accelerated Ownership Non-Qualified Stock Option ("AO"). If an option
grant  contains  the AO  feature  and if a  participant  pays all or part of the
purchase  price of the option with shares of the Company's  Common  Stock,  then
upon exercise of the option the participant is granted an AO to purchase, at the
fair market value as of the date of the AO grant, the number of shares of common
stock the  Company  equal to the sum of the number of whole  shares  used by the
participant in payment of the purchase price and the number of whole shares,  if
any,  withheld  by the Company as payment for  withholding  taxes.  An AO may be
exercised  between the date of grant and the date of  expiration,  which will be
the same as the date of expiration of the option to which the AO is related.

        Stock  appreciation  rights  and/or  restricted  stock may be granted in
conjunction  with, or may be unrelated to stock  options.  A stock  appreciation
right entitles a participant to receive a payment,  in cash or common stock or a
combination  thereof,  in an amount equal to the excess of the fair market value
of the stock at the time of exercise  over the fair market  value as of the date
of grant.  Stock  appreciation  rights may be exercised  during a period of time
fixed by the  Committee not to exceed ten years after the date of grant or three
years after death or disability,  whichever is later.  Restricted stock requires
the  recipient  to  continue  in service as an  officer,  director,  employee or
consultant  for a fixed period of time for  ownership of the shares to vest.  If
restricted  shares or stock  appreciation  rights  are  issued  in  tandem  with
options,  the  restricted  stock or stock  appreciation  right is canceled  upon
exercise of the option and the option will  likewise  terminate  upon vesting of
the restricted shares.



                                                        13

<PAGE>





Item 13.    EXHIBITS AND REPORTS ON FORM 8-K

            (a) Exhibits.  The following exhibits of the Company are included 
herein.

            3.   Certificate of Incorporation and Bylaws

                 3.1   Restated Certificate of Incorporation*
                 3.2   Bylaws*
                 3.3   Proposed Certificate of Amendment to the Restated 
Certificate of Incorporation*

            10.  Material Contracts

                 10.1  1993 Stock Option Plan*
                 10.2  Form of Stock Option Agreements with Messrs. Keenan,
Killeen, Jarrell and Chaffe with
                       Schedule of Details*

            24.  Power of Attorney**


*      Filed in original registration statement on Form SB-2, File No.
 33-61894-FW (the "Registration Statement")
       and incorporate herein by reference.
**     Filed herewith.


            (b)  Reports on Form 8-K.
                 Not Applicable.




                                                        14

<PAGE>



                                                    SIGNATURES

        Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on June 10, 1997.


                                                      EMERGING BETA CORPORATION


                                                       By:  /s/ Burt H. Keenan*
                                                                Burt H. Keenan
                                                                President

        Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities on June 10, 1997.


By:     /s/ Burt H. Keenan*     President and Chief Financial Officer (Principal
        Burt H. Keenan         financial accounting and executive officer) and
                                            Director

By:     /s/ D. B. H. Chaffe III                      Director
        D. B. H. Chaffe III


By:     /s/ Daniel B. Killeen                        Secretary and Director
        Daniel B. Killeen


By:     /s/ Jerry W. Jarrell                         Director
        Jerry W. Jarrell

        */s/D.B.H. Chaffe III
        D.B.H. Chaffe III signs this report
        as attorney in fact of
        Burt H. Keenan


*
        D.B.H. Chaffee III signs this report
        as attorney in fact of
        Burt H. Keenan


<PAGE>














                                       REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Board of Directors of
Emerging Beta Corporation:

We have audited the  accompanying  balance sheet of Emerging Beta Corporation (a
Delaware  corporation)  as of March 31,  1997,  and the  related  statements  of
operations,  stockholders'  equity and cash flows for the years  ended March 31,
1997  and  1996.  These  financial  statements  are  the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Emerging Beta Corporation as of
March 31,  1997,  and the results of its  operations  and its cash flows for the
years ended March 31,  1997 and 1996,  in  conformity  with  generally  accepted
accounting principles.









New Orleans, Louisiana,
May 2, 1997

                                                          F-


<PAGE>

<TABLE>
<CAPTION>




                                               EMERGING BETA CORPORATION

                                                     BALANCE SHEET


                                                    MARCH 31, 1997


                                                        ASSETS




CURRENT ASSETS:
<S>                                                                                                   <C>       
   Cash and cash equivalents                                                                          $  290,600
   Interest receivable                                                                                     2,087

       Total current assets                                                                              292,687

ORGANIZATION COSTS                                                                                           560

       Total assets                                                                                   $  293,247

                                         LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES:
   Accounts payable                                                                                   $    1,050

STOCKHOLDERS' EQUITY:
   Preferred stock, $1.00 par value; 2,000,000 shares authorized; no shares
     subscribed, issued or outstanding                                                                        -
   Common stock, $1.00 par value; 20,000,000 shares authorized; 43,600
     issued and outstanding                                                                               43,600
   Additional paid-in capital                                                                            252,231
   Accumulated deficit                                                                                    (3,634)

       Total stockholder's equity                                                                        292,197

       Total liabilities and stockholders' equity                                                     $  293,247


</TABLE>


                      The  accompanying  notes  are an  integral  part of  these
financial statements.

                                                          F-


<PAGE>



<TABLE>
<CAPTION>


                                               EMERGING BETA CORPORATION

                                               STATEMENTS OF OPERATIONS


                                      FOR THE YEARS ENDED MARCH 31, 1997 AND 1996



                                                                                              1997           1996


<S>                                                                                       <C>            <C>       
INTEREST INCOME                                                                           $   15,818     $   21,121

COSTS AND EXPENSES                                                                           (20,287)       (24,319)

NET LOSS BEFORE TAX                                                                           (4,469)        (3,198)

TAX PROVISION                                                                                     -              -

NET LOSS                                                                                  $   (4,469)    $   (3,198)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                                                 43,600         43,600


LOSS PER SHARE                                                                             $  (.103)      $  (.073)

</TABLE>






                      The  accompanying  notes  are an  integral  part of  these
financial statements.


                                                          F-


<PAGE>
<TABLE>
<CAPTION>





                                               EMERGING BETA CORPORATION

                                          STATEMENTS OF STOCKHOLDERS' EQUITY


                                      FOR THE YEARS ENDED MARCH 31, 1997 AND 1996




                                                                                                  Retained
                                                    Common Stock               Additional         Earnings

                                               Number of                          Paid-in     (Accumulated
                                                  Shares        Amount           Capital           Deficit)           Total


<S>                                                <C>          <C>            <C>                <C>              <C>       
BALANCE - March 31, 1995                           43,600       $  43,600      $  252,231         $  4,033         $  299,864

NET LOSS FOR THE YEAR                                  -               -               -            (3,198)            (3,198)

BALANCE - March 31, 1996                           43,600          43,600         252,231              835            296,666

NET LOSS FOR THE YEAR                                  -               -               -            (4,469)            (4,469)

BALANCE - March 31, 1997                           43,600       $  43,600      $  252,231         $ (3,634)        $  292,197



</TABLE>


                      The  accompanying  notes  are an  integral  part of  these
financial statements.


                                                          F-


<PAGE>

<TABLE>
<CAPTION>




                                               EMERGING BETA CORPORATION

                                               STATEMENTS OF CASH FLOWS


                                      FOR THE YEARS ENDED MARCH 31, 1997 AND 1996




                                                                                               1997             1996


CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                         <C>               <C>        
   Net income (loss)-                                                                       $   (4,469)       $   (3,198)
     Adjustments to reconcile net income (loss) to net cash provided (used) by
       operating activities-
         Decrease/(increase) in interest receivable                                             (1,908)             (179)
         Increase/(decrease) in taxes payable                                                       -               (864)
         Increase/(decrease) in accounts payable                                                  (976)               26
         Amortization expense                                                                      280               280

           Net cash provided (used) by operating activities                                     (7,073)           (3,935)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                (7,073)           (3,935)

CASH BALANCE AND CASH EQUIVALENTS - beginning                                                  297,673           301,608

CASH BALANCE AND CASH EQUIVALENTS - ending                                                  $  290,600        $  297,673

CASH TAXES PAID                                                                             $       -         $      712

</TABLE>


                      The  accompanying  notes  are an  integral  part of  these
financial statements.

                                                          F-


<PAGE>





                                               EMERGING BETA CORPORATION

                                             NOTES TO FINANCIAL STATEMENTS


                                                MARCH 31, 1997 AND 1996



1.   DESCRIPTION OF ORGANIZATION:

Emerging Beta Corporation (the "Company") was incorporated under the laws of the
State of Delaware on February 10, 1993,  for the purpose of seeking out business
opportunities,  including  acquisitions,  that the  board of  directors,  in its
discretion, believes to be good opportunities.  Coincident with the formation of
the Company,  three similar companies were formed,  managed by the same officers
and  directors,  which are engaged in the same  business.  The  Company  will be
heavily  dependent on the skills,  talents,  and abilities of its  management to
successfully implement its business plan. An affiliate of a director is expected
to be the source for most business  opportunities  submitted to the Company. Due
to its currently  limited funds,  it is likely that the Company will not be able
to compete with larger and more experienced entities for business  opportunities
which  are  less  risky  and are  more  attractive  to such  entities;  business
opportunities in which the Company ultimately participates will likely be highly
risky and speculative.

The  Company's  proposed  business is  sometimes  referred to as a "blind  pool"
because investors  entrust their investment  monies to the Company's  management
before they have a chance to analyze any  ultimate  use to which their money may
be put.  Consequently,  the Company's  potential success is heavily dependent on
the Company's  management,  which will have  virtually  unlimited  discretion in
searching  for and  entering  into a  business  opportunity.  The  officers  and
directors of the Company have had limited experience in the proposed business of
their respective Company.

2.   SIGNIFICANT ACCOUNTING POLICIES:

The Company  considers  all highly liquid  investments  with a maturity of three
months or less when purchased to be cash equivalents.

Organization  costs  relating to the  expenses  of  incorporation  ($1,400)  are
amortized on a straight-line basis over five years beginning April 1, 1994.

There are no temporary  differences between financial reporting and tax basis of
assets and  liabilities.  As no taxable income was generated  during fiscal 1996
and 1997, no income tax provision  has been  recorded.  A deferred tax asset has
been  recorded  in an amount  equal to the tax  effected  net  operating  losses
generated  in 1996 and 1997.  This asset has been reduced to zero by a valuation
allowance.   The  net  operating  loss   carryforward  at  March  31,  1997  was
approximately $7,600 and will expire in 2010 and 2011.

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  at the date of the
financial statements and the reported results of operations during the reporting
period.
Actual results could differ from those estimates.

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In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards  (SFAS) No. 128,  "Earnings per Share." The new
standard  simplifies  the  computation of earnings per share (EPS) and increases
comparability  to  international  standards.  Under SFAS No. 128, primary EPS is
replaced by "Basic"  EPS,  which  excludes  dilution and is computed by dividing
income available to common shareholders by the weighted-average number of common
shares outstanding for the period. "Diluted" EPS, which is computed similarly to
fully  diluted  EPS,  reflects  the  potential  dilution  that  could  occur  if
securities or other  contracts to issue common stock were exercised or converted
into common stock.

The Company is required to adopt the new  standard in its fiscal  year-end  1998
financial statements.  All prior-period EPS information  (including interim EPS)
is required to be restated at that time.  Early adoption is not  permitted.  The
standard  would  have no  impact  on  earnings  per  share as  presented  in the
financial statements.

3.   RELATED PARTY TRANSACTIONS:

During  the early  fall of 1996,  the  Company  ceased  using  office  space and
professional  and  clerical  services of an  affiliate  of certain  officers and
directors  which had been used during fiscal year 1996.  The Company was charged
$112 and $3,481 during fiscal 1997 and 1996, respectively, for services rendered
on  its  behalf.   Such  services  are  currently   provided  by  the  Company's
Vice-President of Finance as part of the consulting fee.

Officers and  directors  will be  compensated  based on actual time and expenses
devoted to the  Company's  business.  Beginning  in January  1995,  and  through
December  1996, a  consulting  fee of $1,250 per month was paid to a director of
the Company.  During January to March 1997, the consulting fee paid was $750 per
month.

4.   STOCK OPTION PLAN:

The Company's  1993 Stock Option Plan (the "Plan")  provides for the issuance of
up to 2 million  shares of common  stock at no less than 84% of market  value at
the time of grant (for  non-qualified  options)  and no less than 110% of market
value for incentive stock options (110% if the optionee holds 10% or more of the
Company's  Common  Stock).  During 1993 the Company  granted  options to current
stockholders  to purchase  4,300 shares of common stock at $15 per share.  These
options are not currently  exercisable  and expire on December 31, 1999.  During
1994,  the Company  granted  options to a consultant to purchase 2,000 shares of
common stock at $12 per share.

In October 1995 the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards No. 123 (FAS 123)  "Accounting  for Stock-Based
Compensation,"  effective  for the  Company  at March 31,  1997.  Under FAS 123,
companies  can either  record  expense  based on the fair  value of  stock-based
compensation  upon issuance or elect to remain under the current APB Opinion No.
25 method whereby no  compensation  cost is recognized  upon grant.  The Company
will  continue  to account  for its  stock-based  compensation  plans  under APB
Opinion No. 25.  Entities  electing to remain with the accounting in APB Opinion
No. 25 must make  disclosures  as if FAS 123 had been  applied.  The  disclosure
requirements  of this Statement are effective for options granted in fiscal 1996
and 1997. As a result,  FAS 123 is not  applicable to the Company's  outstanding
stock options.


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