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
      For the fiscal year ended June 30, 1996

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 For the transition period from
      __________ to __________

                       Commission file number 0-27390

                            JUNGLE STREET, INC.
               (Name of small business issuer in its charter)

 Utah                                                       87-0368236
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                             Identification No.)

                             215 Yakima Street
                        Wenatchee, Washington 98801
                               (509) 664-9004
       (Address and telephone number of principal executive offices)


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

                                    None

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

                       Common Stock, $.001 par value
                              (Title of Class)

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

Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. |X|
<PAGE>
State issuer's revenues for its most recent fiscal year:  $1,697,000.

State the aggregate market value of the voting stock held by
non-affiliates, based on the closing price for the registrant's Common
Stock on the Nasdaq Electronic Bulletin Board, as of October 11, 1996:
approximately $5,088,359.

State the number of shares outstanding of the issuer's Common Stock, as of
October 11, 1996: 14,640,745

Transitional small business disclosure format:  Yes      No  X
                                                    ---     ---
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                             TABLE OF CONTENTS
                             -----------------

Item of Form 10-KSB                                                         Page
-------------------                                                         ----

PART I

Item 1 -  Description of Business..........................................   2

Item 2 -  Description of Property..........................................  14

Item 3 -  Legal Proceedings................................................  14

Item 4 -  Submission of Matters to a Vote of Security Holders..............  14

PART II

Item 5 -  Market for the Registrant's Common Stock
          and Related Shareholder Matters..................................  15

Item 6 -  Management's Discussion and Analysis of
          Financial Condition and Results of  Operations...................  16

Item 7 -  Financial Statements.............................................  19

Item 8 -  Changes in and Disagreements with Accountants
          on Accounting and Financial Disclosure...........................  43

PART III

Item 9 -  Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act................  44

Item 10 - Executive Compensation...........................................  46

Item 11 - Security Ownership of Certain Beneficial
          Owners and Management............................................  50

Item 12 - Certain Relationships and Related
          Transactions.....................................................  52

Item 13 - Exhibits and Reports on Form 8-K.................................  53

SIGNATURES.................................................................  55

EXHIBIT INDEX..............................................................  56


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                                   PART I


PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     The information set forth in this report in Item 1 - "Description of
Business" and in Item 6 - "Management's Discussion and Analysis of
Financial Condition and Results of Operations" includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and is subject to the safe harbor created
by those sections. Certain factors that realistically could cause results
to differ materially from those projected in the forward-looking statements
are set forth in Item 1 - "Considerations Related to the Company's
Business."

ITEM 1. DESCRIPTION OF BUSINESS

OVERVIEW

     Jungle Street, Inc. ("Jungle Street") provides Internet access and
long distance telecommunications services through its wholly-owned
subsidiary, Televar Northwest, Inc. ("Televar"). Unless the context
indicates otherwise, Jungle Street and Televar are collectively referred to
herein as the "Company."

     The Company is a provider of Internet and other integrated
telecommunications services for individuals and businesses. The Company's
strategy is to establish strong market share positions in rural markets
through a network of value added resellers and to gain market share in
urban markets by entering into distribution relationships with computer
retail chains and through strategic acquisitions of local and regional
Internet service providers. The Company offers subscribers a complete
Internet access solution comprised of front-end software integrated with
high quality access service and customer support, and employs a
telecommunications network that provides subscribers with direct,
high-speed access to the full range of Internet applications and resources,
including e-mail, World Wide Web browsing, File Transfer Protocol, Telenet
and Usenet. By offering competitive local service, content and support, the
Company believes it can create strong brand loyalty in the service areas in
which it operates.

     In addition to providing Internet access services, the Company also
provides long distance voice and data telecommunications services to
businesses under an agreement with Association Communications, Inc., a
tariffed long distance reseller based in Seattle, Washington. Under the
agreement, the Company offers both switched and dedicated service at
competitive rates and personalized customer service to businesses located
throughout Washington.

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     The Company in its current form is the result of an August 1996 merger
between a wholly-owned subsidiary of Jungle Street and Televar (the
"Merger"). Prior to the Merger, Jungle Street had no active business and
had nominal assets and liabilities. Pursuant to the terms of the merger,
Televar's shareholders received approximately 83% of the 13,968,625 shares
of the common stock of Jungle Street outstanding on the effective date of
the Merger in exchange for all of the outstanding shares of Televar's
Common Stock. On the effective date of the Merger, the officers and
directors of Televar became the officers and directors of the Company and
Jungle Street's existing officers and directors resigned. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations
Overview."

     Televar was incorporated in Washington in 1984 as Apple Valley
Telephone, Incorporated. From 1984 until February 1995, Televar was
primarily in the business of providing telephone interconnection products
and services. In February 1995, Televar discontinued that business and
since that time has focused principally on providing Internet access and
long distance telephone services. Jungle Street was incorporated in Utah in
1980 to pursue real estate investment opportunities. Jungle Street
purchased two real estate parcels in Park City, Utah, which it sold at
losses in 1993 and 1994. Jungle Street was essentially inactive from August
1994 until December 1995 when it filed a registration statement to register
its common stock under Section 12(g) of the Exchange Act.

     The Company's headquarters are located at 215 Yakima Street,
Wenatchee, WA 98801.

CONSIDERATIONS RELATED TO THE COMPANY'S BUSINESS

     The following factors should be considered in evaluating the Company's
business and operations:

     LIMITED OPERATING HISTORY; OPERATING LOSSES. The Company has had a
limited operating history in the Internet access and long distance services
industries. Although the Company has experienced recent growth in revenues,
it experienced net losses of $367,000 and $106,000, respectively, in each
of the fiscal years ended June 30, 1996 and June 30, 1995. The Company's
current focus is on developing its Internet subscriber base.
Notwithstanding cost-saving measures that the Company has implemented, it
expects for the foreseeable future to continue to incur net losses. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operation." There can be no assurance that revenue growth will continue or
that the Company will in the future achieve or sustain profitability or
positive cash flow from operations.

     NEED FOR ADDITIONAL CAPITAL. The success of the Company will depend in
significant part on its ability to raise additional equity and/or debt
financing to fund existing obligations, to provide working capital, and to
finance operations and potential acquisitions. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations." The
Company's current working capital sources are insufficient to fund its
near-term

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operations. There is no assurance that the Company will be able to raise
additional capital on favorable terms or, if it raises such additional
capital, that such financing will be sufficient to permit the Company to
operate profitably.

     NEW AND UNCERTAIN MARKET. The market for Internet access services and
related products is in an early stage of growth. Because this market is
relatively new and because current and future competitors are likely to
continue to introduce competing Internet connectivity and/or on-line
services and products, it is difficult to predict the rate at which the
market will grow or at which new or increased competition will result in
market saturation. See " - Internet Industry Background." If demand for
Internet services fails to grow or grows more slowly than anticipated, or
the market becomes saturated with competitors, the Company's business,
operating results and financial condition will be adversely affected.

     DEPENDENCE ON NETWORK INFRASTRUCTURE. The future success of the
Company's business will depend upon the capacity, reliability and security
of its network infrastructure. The Company must continue to expand and
adapt its network infrastructure as the number of users and the amount of
information they wish to transfer increases, and to meet changing customer
requirements. The expansion and adaption of the Company's network
infrastructure will require substantial financial, operational and
management resources. There can be no assurance that the Company will be
able to expand or adapt its network infrastructure to meet additional
demand or its customers' changing requirements on a timely basis, at a
commercially reasonable cost, or at all, or that the Company will be able
to deploy successfully the contemplated network expansion. Any failure of
the Company to expand its network infrastructure on a timely basis or to
adapt into changing customer requirements or evolving industry standards
could have a material adverse effect on the Company's business, financial
condition and results of operations.

     COMPETITION. The market for Internet access services is extremely
competitive. There are no substantial barriers to entry, and the Company
expects that competition will intensify in the future. The Company's
competitors include other local access providers as well as many large
companies that have substantially greater market presence and financial,
technical, marketing and other resources than the Company, including (1)
national and regional commercial Internet service providers, such as NETCOM
On-Line Communication Services, Inc., PSINet and UUNET Technologies, Inc.;
(2) established on-line services that offer Internet access, such as
America Online, Inc. ("AOL"), CompuServe Incorporated, Prodigy Services
Company, Genie, and Delphi Internet Services; (3) computer hardware and
software and other technology companies, such as IBM and Microsoft Corp.
("Microsoft"); (4) national long distance carriers, such as AT&T Corp.
("AT&T"), MCI Communications Corporation ("MCI") and Sprint Corporation
("Sprint"); (5) regional telephone companies; (6) cable operators, such as
Tele-Communications, Inc.; and (7) nonprofit or educational Internet
service providers. In addition, the Company believes that new competitors,
including large computer hardware and software, media and
telecommunications companies will enter the Internet access market,
resulting in even greater competition for the Company. See " Competition."

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     Increased competition in the Internet services industry could result
in significant price competition, which in turn could result in substantial
pressure on the Company to reduce the price of its services. In addition,
competition could result in increased selling and marketing expenses and
related subscriber acquisition costs, which could adversely affect the
Company's future profitability. There can be no assurance that the Company
will be able to offset the effects of any such price reductions or increase
in operating costs by expanding its subscription base or by generating
higher revenue from enhanced services, reducing its overhead expenses or
otherwise. Increased competition could erode the Company's market share and
adversely affect the Company's business and results of operations. There
can be no assurance that the Company will have the financial resources,
technical expertise or marketing and support capabilities to continue to
compete successfully in the Internet connectivity market.

     The long distance telecommunications industry also is intensely
competitive and is significantly affected by the introduction of new
services and the market activities of major industry participants.
Competition in the long distance industry is primarily based upon pricing,
customer service, network quality and value-added services. The Company
competes with AT&T, MCI, Sprint, and other national and regional long
distance carriers. Most of the Company's competitors have greater name
recognition, more extensive transmission networks and greater engineering
and marketing capabilities than the Company and have, or have access to,
substantially greater financial and personnel resources than those
available to the Company. See " - Competition." The ability of the Company
to compete effectively in the telecommunications industry will depend upon
its continued ability to provide high quality, market-driven services at
competitive prices. There can be no assurance that the Company will be able
to compete successfully with existing or future long distance
telecommunications services providers.

     DEPENDENCE ON THIRD-PARTY TELECOMMUNICATIONS SERVICES. The Company
relies on third-party suppliers for its Internet feed to the Internet
"backbone," for data communications capacity via leased lines, and for
other telecommunications services. The Company's Internet feed currently is
provided by a DS-3 feed supplied by Sprint, and the Company's leased lines
currently are provided by Northwest Microwave, Sprint, GTE, US West, and
other local exchange carriers. The Company also is highly dependent upon
suppliers from which the Company purchases network equipment required to
enhance and extend its existing network. If any of the Company's suppliers
are unable or unwilling to provide or expand their current levels of
service to the Company in the future, the Company's operations could be
materially and adversely affected. Although leased telecommunications lines
are available from several alternative suppliers, there can be no assurance
that the Company could obtain substitute services from other providers at
reasonable or comparable prices or in a timely fashion.

     DEPENDENCE ON VALUE ADDED RESELLERS. The Company currently derives a
significant percentage of its operating revenue from the grant of exclusive
sales territories to value added resellers ("VARs") pursuant to exclusive
sales agency agreements. Under these agreements, the Company grants VARs
exclusive rights to sell the Company's dial-up Internet access service
within specified territories, generally defined as the applicable local
exchange area,

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in return for the payment to the Company of a fixed fee. See " - The
Televar Solution." This fee is intended to cover the costs of extending
Internet services into the new market. The failure by the Company to
continue expanding its service area by entering into relationships with new
VARs could have a material adverse effect on the Company's business,
financial condition and results of operations.

     The Company currently markets and distributes its Internet services
primarily through its VAR network. The Company is highly dependent on
continuing relationships with its VARs to acquire new customer accounts,
promote its service, and provide customer support. See " - Sales and
Marketing." Failure of the VARs to perform their obligations to the Company
could have a material adverse effect on the Company's business, financial
condition, and results of operation.

     TECHNOLOGICAL CHANGE AND NEW SERVICES. The Internet services and
telecommunications industries have been characterized by rapidly changing
technology, frequent new product and service introductions, and evolving
industry standards and customer expectations. The Company believes that its
future success will depend on its ability to anticipate such changes and to
offer on a timely basis services that meet these evolving industry
standards and customer requirements. There can be no assurance that the
Company can successfully anticipate such changes and develop and bring new
services to market in a timely manner, or that services or technology
developed by others will not render the Company's services and technology
noncompetitive or obsolete.

     CUSTOMER ATTRITION. A level of customer attrition is inherent in both
the Internet services and telecommunications services businesses. The
annual attrition rate (defined by the Company as the average number of
customers from whom revenues have terminated or been terminated as a result
of non-payment or dropped to zero usage, expressed as a percentage of the
total number of customers) in the fiscal year ended June 30, 1996, was
approximately 12% in the Company's Internet services business and
approximately 6% in its long distance services business. Although the
Company will attempt to reduce its future attrition rate in its Internet
business, there can be no assurance that this level will not be sustained
or increase.

     DEPENDENCE ON KEY PERSONNEL. The Company is highly dependent on the
technical and management skills of its key employees and its ability to
identify, hire and retain additional personnel. Competition for such
personnel is intense and there can be no assurance that the Company will be
able to retain existing personnel or identify or hire additional personnel.

     GOVERNMENT REGULATION. The Company is not currently subject to
regulation by the Federal Communications Commission or any other
governmental agency, other than regulations applicable to businesses
generally. Changes in the regulatory environment relating to the Internet
connectivity and telecommunications industries, including regulatory
changes that directly or indirectly affect telecommunications costs or
increase the likelihood or scope of competition from regional telephone
companies or other entities, could have an adverse

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effect on the Company's business and results of operation. The Company
cannot predict the impact, if any, that future regulation or regulatory
changes may have on its business.

     EFFECTIVE CONTROL BY OFFICERS AND DIRECTORS. As of October 11, 1996,
the Company's officers and directors beneficially own, in the aggregate,
approximately 78% of the Company's outstanding Common Stock. See "Security
Ownership of Certain Beneficial Owners and Management." Because the
Company's Articles of Incorporation do not authorize cumulative voting in
the election of directors, the Company's officers and directors are, and in
the foreseeable future will continue to be, in a position to control the
Company by being able to elect the Company's Board of Directors. Moreover,
the officers and directors possess the voting power to approve or
disapprove of other matters requiring approval by the shareholders of the
Company, including significant corporate transactions. Such effective
control over the Company could have the effect of causing or delaying,
deferring, dissuading or preventing a change of control of the Company and
a corresponding increase in the share value of its Common Stock.

     ABSENCE OF DIVIDENDS. The Company has not paid or declared any cash
dividends with respect to the Common Stock and has no present intention of
doing so in the foreseeable future. The Company currently anticipates that
it will retain all available funds to finance its business activities.

INTERNET INDUSTRY BACKGROUND

     The Internet is a global collection of thousands of computer networks
cooperating to enable commercial organizations, educational institutions,
government agencies, and individuals to communicate electronically, access
and share information and conduct business. Use of the Internet has grown
rapidly since its commercialization in the early 1990s. Factors
contributing to the growth of the Internet include the emergence of a
preferred and dominant internetworking protocol standard; increasing
penetration of computers and modems into households and businesses; the
development of informational, entertainment and commercial applications and
resources of the Internet and the growing awareness of such resources; the
proliferation of Internet service providers ("ISPs") and commercial on-line
services; and the increasing availability of user-friendly navigational and
utility tools that permit easy access to the Internet's resources.

     In addition to e-mail, file transfer, bulletin board, and other
on-line services, some of the most exciting commercial developments on the
Internet are occurring on the World Wide Web (the "Web"). The Web is a
browsing and searching system that enables users to access thousands of
computer servers located worldwide on which reside text and graphic media,
referred to as "home pages." Each home page is linked by a special
communications protocol called hypertext markup language ("html"). The html
protocol allows Internet users to view and access text, graphics, video and
audio resident on a home page or to connect instantaneously to related and
linked information on the same server or other home pages. By simplifying
navigation around the Web, software products known as "browsers," such as
Netscape Navigator, Mosaic, NetCruiser and Microsoft's Internet Explorer,
have helped

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contribute to the rapid growth of the Web. The popularity of the Web as a
commercial medium is due to its ability to facilitate global sharing of
information and resources, as well as its potential to provide an efficient
channel for advertising, marketing, and direct sales and distribution of
certain goods and information services.

     With the growth and increasing commercialization of the Internet, a
large number of companies have emerged to provide Internet access and
related services and products. ISPs vary widely in geographic coverage,
customer focus, and levels of Internet access provided to subscribers.
Providers may concentrate on certain types of subscribers, such as
businesses or individuals, which differ substantially in the type of
service and support required. Providers also may differ according to
whether they provide direct or non-direct access to the Internet. Direct
access through Internet protocols such as Serial Line Interface Protocol
("SLIP") or Point-to-Point Protocol ("PPP") enable users to establish
direct connections to other computers on the Internet, including Web sites
or other users. A number of the major commercial on-line service providers
currently offer non-direct access to the Internet which requires users to
access the Internet through a host computer controlled by the service
provider. Under this architecture, users frequently are dependent on the
service provider to determine which Internet applications are available to
them. Other regional and national ISPs generally offer direct Internet
access to customers, which enables users to access the full range of
Internet resources.

THE TELEVAR SOLUTION

     The Company provides a complete Internet access solution by providing
subscribers with Netscape Navigator browser software integrated with direct
access service and local customer support. The Company provides a direct
connection to the Internet through SLIP or PPP protocols, giving users
access to the full spectrum of Internet information, entertainment and
commercial resources, including e-mail, Web sites, USENET news groups and
database information (including graphics, data and public domain software).

     The Company maintains a high speed, distributed client server network
that allows subscribers in the Company's coverage areas to access its
network through a local telephone call. In addition, the Company's
leased-line private network enables the Company to charge subscribers flat
monthly fees without per hour use surcharges. The Company's network is
designed to be scalable in order to support expansion of both the
subscription base and data traffic volume.

     The Company currently provides local access to the Internet in 28
local calling areas encompassing approximately 90 communities in Washington
and Idaho.

THE TELEVAR STRATEGY

     The Company's objective is to become a leading provider of Internet
access and telecommunications services by establishing early positions in
under-served markets as a reliable, high speed and competitively priced
access provider. The Company intends to build

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its subscription base in rural markets where competition among ISPs is less
intense by aggressively marketing its Internet services through a direct
sales force and a network of value-added resellers ("VARs") consisting of
computer dealers, networking and consulting firms and telephone
interconnect companies, and to increase its subscription base in larger,
urban markets through large-scale computer retail chains, strategic
combinations or alliances with or acquisitions of regional and local ISPs.

     The Company believes that four features of its Internet access
services distinguish it from its competitors: (1) reliable, high speed
service; (2) flat rate pricing, regardless of usage volume; (3)
user-friendly access software; and (4) superior customer service and
support by local, trained professionals.

     RELIABLE, HIGH SPEED SERVICE. In contrast to many of its competitors,
the Company uses a distributed client server network to provide its
Internet access services. Currently, AOL and CompuServe, as well as most
regional and local providers, use a host-centric technology. The Company's
configuration allows distribution of the network with greater flexibility
and recovery in the event of system outages.

     For dial-up service, the Company's system is designed to operate at
speeds up to 33.6 kbps, compared with speeds of between 9.6 and 28.8 kbps
among major commercial on-line services and many regional and local ISPs.
For the Company's subscribers, this translates into connect and Internet
navigation times two to three times faster than these competitors. Even
among those competitors that operate at 28.8 kbps, the Company offers its
subscribers a 20% speed advantage in those locations where a 33.6 kbps
connection can be made. The Company's Sprintlink DS-3 provides significant
bandwidth, further distinguishing the Company's service from that of many
of its competitors.

     PRICING. Unlike some on-line services that access the telephone
network on a rated basis and pass on this hourly rate to their customers,
the Company's leased-line private network enables the Company to charge
customers a flat monthly fee, without hourly surcharges. The Company
believes that its investment in its own network will translate into a
competitive advantage over on-line service providers that base their
pricing on a subscriber's volume of use. In addition, with local access in
the communities that it serves, the Company's subscribers can dial a local
number free of any long distance charges to gain access to the Internet
through the Company's network and equipment.

     USER-FRIENDLY ACCESS SOFTWARE. In December 1995, the Company became
the first ISP in the Pacific Northwest to obtain a license to distribute
Netscape Navigator on a retail basis bundled with its own Internet access
services. Unlike the retail version of Netscape Navigator, the version
licensed to the Company is customized for use on the Company's own network
and comes with a "point and click" installation utility that installs the
software and automatically detects and configures the modem. The Company
currently offers Netscape Navigator at no charge to its annual subscribers
and at a sliding discount to its other subscribers. The Company has
developed its own packaging and installation instructions for use in the
retail environment.

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     Microsoft Corporation recently offered to license Microsoft Explorer
to the Company for distribution to the Company's subscribers. The Company
intends to license Microsoft Explorer and to distribute that software to a
portion of its subscriber base at no charge in order to provide an
alternative to Netscape Navigator.

     CUSTOMER SERVICE AND SUPPORT. One of the key components of the
Company's strategy is to provide superior customer service and support,
using both its in-house technical support staff and its network of VARs.
The Company provides a toll-free customer support line 12 hours a day, six
days a week. In addition, the VARs provide both face-to-face and telephonic
support in their local communities.

     The Company is in the process of developing and/or acquiring a
comprehensive information system (IS) that would include billing and
accounting, network management, and customer service functions. Among other
features, the IS is expected to allow the Company to monitor subscribers'
use of the system and enable customer service personnel to be proactive in
responding to customer needs. In addition, the IS is expected to include
data sharing capability for storing and indexing information about common
problems encountered by subscribers, thereby permitting customer service
personnel to retrieve predeveloped solutions on-line in response to support
requests from subscribers. In addition to providing common responses to
common problems, the knowledge-based system should decrease the time
necessary to train new customer service representatives.

SALES AND MARKETING

     The Company seeks to attract and retain Internet access customers by
emphasizing reliable, high speed service, competitive pricing,
user-friendly access software; and superior customer service and support.
An important element of the Company's sales and marketing strategy has been
the development of VARs as its primary distribution channel. In exchange
for a fixed fee payable to the Company, VARs agree to market the Company's
Internet access services in their localities and are entitled to a
commission of approximately 25% on access revenues generated over the terms
of their agreements with the Company.

     VARs also provide training and support to subscribers under their
agreements with the Company. The financial incentives provided by the
Company are designed to motivate the VARs to promote the Company's services
through advertising, in-store consulting and seminar programs. The Company
also has a co-op advertising program that matches VAR contributions up to a
maximum of $1,000 per month. In addition, the Company plans to develop a
comprehensive marketing plan for its VAR program that would promote the
VARs' products and services together with the Company's services. The
Company believes that the VAR program will enable it to benefit from the
name recognition, customer relationships, and general goodwill its
distributors possess in their local markets.

     The Company's marketing program seeks to create and enhance brand
awareness, elicit new subscriptions and retain existing subscribers.
Historically, the Company's marketing efforts have focused on targeted
radio promotion, advertising in trade journals and

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special interest publications, direct mailings of promotional materials,
and participation at trade shows and seminars. Based on the limited
availability of resources and the continued growth of the Company's
subscription base, media advertising has been limited. The Company's direct
sales staff handles inquiries from prospective customers and follows up on
leads generated by the VARs, promotion programs, trade shows and other
sources.

LONG DISTANCE TELECOMMUNICATIONS SERVICE

     In addition to Internet access, the Company also provides long
distance voice and data telecommunications service under an agreement with
Association Communications, Inc. ("ACI"), a tariffed long distance reseller
based in Seattle, Washington. Pursuant to this agreement, which grants
Televar the right to serve as exclusive distributor of ACI's long distance
services in Eastern Washington, the Company offers both switched and
dedicated service at competitive rates and provides personalized customer
service to businesses located throughout Washington. This service is
generally sold on a monthly basis to small and medium sized businesses with
monthly long distance usage of between $400 and $4,500.

     The Company offers both switched and dedicated service to its
customers. In switched service, the customer's call is routed through the
local telephone company's switch to ACI's switch in Seattle, and from there
to the ultimate destination point through a major carrier's transmission
network. For dedicated service, the Company installs a transmission line
from the customer's premises to the Company's own switch, from which the
call is routed across a leased digital T-1 lines to ACI's switch in
Seattle, bypassing the local telephone company's central office. From
there, the call is routed onto a major carrier's transmission network to
the ultimate destination point.

     Unlike most commissioned sales organizations, the Company contracts to
supply telecommunications services directly with its customers.
Accordingly, although the Company currently receives commissions equal to a
percentage of the customer's monthly billing, the Company can migrate its
customers to a true resale environment when the volume of traffic justifies
such a transition. In the resale environment, as the Company's call traffic
increases it will be able to negotiate more favorable pricing from the
major carriers, thus contributing to profitability and future growth
through channels of distribution that will supplement its direct sales
force. The Company currently is exploring the option of becoming a true
reseller.

     The Company's long distance service has a number of distinguishing
features that compare favorably to the competition. First, the Company
believes that it offers some of the lowest long distance rates in the
region. Second, the Company charges a flat rate calculated monthly based
upon the actual usage volume for both its switched and dedicated service.
The Company believes that business customers prefer a predictable flat rate
over complicated discount programs and that the Company's pricing structure
represents an important marketing advantage. Third, the Company offers a
variety of billing formats and services tailored to meet the needs of
business users. For example, the Company offers a "Billing on Disk" program
for larger volume customers that desire detailed bill analysis. Under this

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program, the Company will provide customers with their bills on a computer
disk so that the data may be manipulated by the customer to generate a
variety of statistical reports. In addition, a customer service
representative delivers the first monthly billing to each new customer to
ensure that the customer has received the correct billing format and
understands the information provided on the bill.

     The Company began marketing its long distance service in November
1994. The Company currently has 85 customers with aggregate monthly billing
volume averaging $78,000 during the last fiscal year.

     The Company emphasizes its competitively priced, high quality service
and superior customer support in marketing its long distance service. The
Company does not engage in advertising directly to end users of long
distance services, although the Company distributes printed marketing
materials to prospective users on a selected basis. Instead, the Company
relies on its sales personnel to market the Company's telecommunications
services through direct contact with potential customers. The Company
believes that, because of the extensive promotional efforts of AT&T, MCI,
and Sprint, traditional media-based forms of promotion are ineffective
marketing tools for smaller long-distance telecommunications providers like
the Company. Consequently, the Company focuses on making one-on-one
personal contact with the decision-makers at potential customers.

COMPETITION

     The Internet services business is highly competitive and there are no
substantial barriers to entry, except access to capital to finance network
equipment. Currently, the Company competes with a number of national and
regional Internet service providers such as NETCOM and UUNET, as well as
with smaller regional and local providers. Competition in the long distance
industry, which also is intense, is primarily based upon pricing, customer
service, network quality, and value-added services. The Company competes
with AT&T, MCI, Sprint, and other national and regional long distance
carriers.

     A number of large organizations, including large communications
carriers such as AT&T, Cable & Wireless, MCI, Sprint and the regional Bell
operating companies, are offering or have announced plans to offer Internet
or on-line services. The Company also faces significant competition from
the on-line services industry. Major on-line competitors presently include
AOL, CompuServe, Delphi, Genie, Prodigy, and the Microsoft Network. The
Company believes that additional new competitors, which may include
computer software and services, telephone, media, publishing, cable
television and other companies, are likely to enter the on-line services
market.

     The ability of some of the Company's competitors to bundle Internet
access services with other popular products and services could give those
competitors an advantage over the Company. For example, Microsoft Network
offers access to the Internet as a standard integrated feature of its
Windows 95 operating system.

                                     12
<PAGE>
     Most of the Company's competitors possess financial resources
significantly greater than those of the Company and, accordingly, could
initiate and support prolonged price competition to gain market share. For
example, the communications carriers could significantly undercut the
Company's pricing for dial-up and other services due to their existing
investment in telecommunications infrastructure. If significant price
competition were to develop, the Company likely would be forced to lower
its prices, possibly for protracted period, which would have a material
adverse effect on its financial condition and results of operations and
could threaten its economic viability. In addition, the Company believes
that the Internet access and on-line services business is likely to
encounter consolidation in the near future, which could result in increased
price and other competition in the industry and consequently have an
adverse impact on the Company's business, financial condition and results
of operations.

     The Company believes that the primary competitive factors for the
provision of Internet services are price, technical expertise and quality
of services, ease of use, variety of value-added services, reliability,
customer support, experience of the supplier and geographic coverage. The
Company's success in this market will depend heavily upon its ability to
provide high quality Internet connectivity and value-added Internet
services. Other factors that will affect the Company's success in this
market include the Company's continued ability to attract additional
experienced marketing, sales and management talent, and the expansion of
worldwide support, training and field service capabilities.

PROPRIETARY RIGHTS

     The Company's success and ability to compete is dependent in part upon
its network technology, although the Company believes that its success is
more dependent upon its technical expertise and service orientation than
its proprietary rights. The Company relies on a combination of copyright,
trademark and trade secret laws and contractual restrictions to establish
and protect its technology. The Company's policy is to require employees
and consultants and, when obtainable, suppliers to execute confidentiality
agreements upon the commencement of their relationships with the Company.
These agreements provide that confidential information developed or made
known during the course of a relationship with the Company is to be kept
confidential and not disclosed to third parties except in specific
circumstances. There can be no assurance that the steps taken by the
Company will be adequate to prevent misappropriation of its technology or
that the Company's competitors will not independently develop technologies
that are substantially equivalent or superior to the Company's technology.

EMPLOYEES

     The Company currently has 27 full time employees, including eight
employees in customer service, five in sales and marketing, six in network
operations, and eight in management and administrative functions. The
Company also employs 11 individuals on a part-time basis, 10 of whom work
in customer service. The Company believes that its relations with its
employees are good.

                                     13
<PAGE>
ITEM 2. DESCRIPTION OF PROPERTY

     The Company leases a 3,800 square foot facility in Wenatchee,
Washington, for use as its headquarters office and operations center. This
facility, which previously was used as a telephone operator services center
for Pacific Northwest Bell, is located near a GTE central office. Because
of its prior use, the building has significant conduit running between it
and the central office. Accordingly, the Company has been able to connect
its telephone and Internet equipment inexpensively via T-1 lines with the
GTE central office for the Company's Internet and long distance voice and
data communications services. Although the Company plans to retain this
facility as its operations center and believes that this space is adequate
to meet its near-term requirements, the Company may move its
administrative, sales, and management personnel to another location at some
future date.

ITEM 3. LEGAL PROCEEDINGS

     The Company is currently in a dispute with a former landlord over
claims by the landlord that the Company is liable for lease payments under
a lease agreement relating to premises which the Company vacated prior to
the expiration of the lease term. The Company has accrued a provision of
$40,000 in its accounts payable to cover any contingent liability
associated with the dispute. The Company contends that the landlord failed
to work with willing and able successor tenants and failed to use
reasonable efforts to mitigate damages. The Company intends to vigorously
contest and defend the landlord's claim.

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

     No matter was submitted to a vote of security holders during the
fourth quarter of the fiscal year covered by this report.

                                     14
<PAGE>
                                  PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND
        RELATED SHAREHOLDER MATTERS.

     Until February 13, 1996, there was no public market for the Company's
Common Stock. Since that date, the Common Stock has been listed on the
Nasdaq Electronic Bulletin Board under the symbol "JUNS".

     The following table shows the range of high and low bids for the
Common Stock as reported by Nasdaq for each period in the fiscal years
shown below.


     PERIOD                                               High       Low
     ------                                              -------    ------
     1996
     Third Quarter (from February 13, 1996)............. No Quotes Entered
     Fourth Quarter..................................... No Quotes Entered
     1997
     First Quarter...................................... $1.8125    $0.625
     Second Quarter (through November 8, 1996).......... $2.125     $0.875

     These quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission, and may not represent actual transactions.

     As of October 11, 1996, there were 448 holders of record of 14,640,745
shares of Common Stock.

     The Company has never declared or paid cash dividends on the Common
Stock. The Company currently anticipates that it will retain all future
earnings to fund the operation of its business and does not anticipate
paying dividends on the Common Stock in the foreseeable future.

                                     15
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

     On August 30, 1996, Jungle Street effected a merger between a
wholly-owned subsidiary formed for the purpose of the merger and Televar
(the "Merger"). The shareholders of Televar received 11,593,325 shares of
common stock of Jungle Street in the Merger, resulting in the shareholders
of Televar owning an aggregate of 83% of the 13,968,625 shares of Jungle
Street common stock outstanding on the effective date of the Merger. As a
result of the Merger, Televar became a wholly-owned subsidiary of Jungle
Street. The Televar capital stock that was converted into Jungle Street
common stock was converted based on a five-for-one conversion ratio, which
was determined pursuant to arms-length negotiations between Jungle Street
and the management of Televar. In connection with the Merger, Jungle Street
also issued an aggregate of 1,125,000 shares of common stock (approximately
8% of the outstanding common stock on a post-merger basis) to certain
consultants as compensation for services rendered to Jungle Street prior to
the Merger.

     Prior to the Merger, Jungle Street was inactive and had only nominal
assets and liabilities. See "Description of Business - Overview. The
financial statements included in this report include the activity of both
Televar and Jungle Street retroactively restated to the beginning of the
periods covered by the financial statements.

RESULTS OF OPERATIONS

     Revenues for the year ended June 30, 1996 were derived principally
from the Internet access and long distance service business. In the year
ended June 30, 1995, the Company received a significant percentage of its
revenues from telephone equipment sales. Those revenues ceased, however, in
February 1995 when the Company sold the assets of its telephone
interconnect business to a third party and discontinued that business. The
Company received approximately $225,000 in gross proceeds from the sale of
the interconnect business, of which $100,000 was paid in cash and
approximately $125,000 represented assumption of liabilities by the buyer.

     Revenues for the year ended June 30, 1996, were $1,697,000. Of these
revenues, approximately 59% represented Internet access and VAR fee
revenues, approximately 38% represented long distance services, and
approximately 3% represented cellular services. Revenues for the year ended
June 30, 1995 were $798,500. The growth in revenues from 1995 to 1996 was
due primarily to a significant increase in Internet access service and VAR
fee revenues. The growth of the Company's Internet customer base resulted
primarily from an increase in the Company's marketing efforts. Revenues in
fiscal 1995 included a high level of telephone equipment sales and service
(approximately 55%), which is not recurring. The balance of the revenues in
1995 represented Internet access and long distance service revenues.

     Costs of sales for the year ended June 30, 1996 were $1,454,000
compared with costs of sales for the year ended June 30, 1995 of $639,000.
Costs of sales consists primarily of

                                     16
<PAGE>
software license fees and network operating costs, including leased line
and local access charges. Costs of sales increased as a percentage of
revenues from 80% in 1995 to 86% in 1996 due primarily to the expansion of
the Company's network, including the installation of additional lines in
advance of anticipated growth in the Company's subscription base.

     Sales, general and administrative costs consist primarily of personnel
costs and marketing expenses. Sales, general and administrative costs were
$579,000 for the year ended June 30, 1996 compared to $139,000 for the year
ended June 30, 1995. The increase in expenses during the 1996 period
resulted primarily from addition of personnel and increased sales and
marketing efforts. The Company expects its sales and marketing expenses to
continue to increase in future periods.

     Other income is comprised primarily of income received as a result of
the settlement of a dispute with one of the Company's suppliers and rental
income from a sub-lease of previously occupied office space. Other income
was $22,000 for the year ended June 30, 1996 and $12,000 for the year ended
June 30, 1995. The Company incurred interest expense of $54,000 in the year
ended June 30, 1996 compared to $12,000 in the prior year. The
period-to-period increase in interest expense was due to an increased level
of borrowings in 1996. Although the Company expects to continue
experiencing operating cash shortfalls for the foreseeable future, the
Company does not expect to continue to increase its level of borrowings.
The Company's objective is to secure additional equity capital to fund
operating cash flow shortfalls. See "- Liquidity."

LIQUIDITY

     At June 30, 1996, the Company's total current assets were $213,000 and
its total current liabilities were $1,022,000 for a net working capital
deficit of $809,000.

     The Company has met its cash requirements through a combination of
cash flow from operations, sales of equity securities and borrowings from
banks and other third parties. During the year ended June 30, 1996, the
Company generated net proceeds of $30,000 from private sales of common
stock. During the year ended June 30, 1996, the Company borrowed
approximately $560,000 from third parties at annual interest rates ranging
from 8.25% to 18%. The Company made repayments during the year of
approximately $100,000 under these loan arrangements. In certain cases, the
Company issued common stock in exchange for forgiveness of indebtedness and
in consideration of services rendered to the Company.

     The Company currently is in default with respect to payments due to a
third party under a $20,000 promissory note that the Company issued in
April 1996. All principal and interest under the note was due in October
1996. The note is convertible at the option of the holder into common stock
of the Company at $2.50 per share.

     The Company currently does not have a line of credit in place with a
commercial lender.

                                     17
<PAGE>
     The proceeds from recent offerings and borrowings, together with cash
from operations, are insufficient to fund budgeted operations for the near
term. The Company will require additional financing in order to fund its
operating plan and budget and is in discussions with several potential
equity financing sources. There is no assurance, however, that these
discussions will result in additional equity capital on terms that are
favorable to the Company or that additional financing will be available to
the Company from other sources. If the Company is unable to raise
additional capital, the Company's ability to continue operations may be
adversely affected. See Note 17 of Notes to Financial Statements.

                                     18
<PAGE>
ITEM 7. FINANCIAL STATEMENTS

                       INDEX TO FINANCIAL STATEMENTS

                                                                          Page
                                                                          ----

Independent Auditor's Report.............................................  20
Balance Sheet, June 30, 1996.............................................  21
Statements of Operations for the Years Ended June 30, 1995
  and June 30, 1996......................................................  23
Statements of Stockholders' Deficit for the Years Ended
  June 30, 1995 and June 30, 1996........................................  24
Statements of Cash Flows for the Years Ended June 30, 1995
  and June 30, 1996......................................................  26
Notes to Financial Statements............................................  28

                                     19
<PAGE>
To the Board of Directors
Jungle Street, Inc.
Wenatchee, Washington

We have audited the balance sheet of Jungle Street, Inc., including the
accounts of its wholly-owned subsidiary, Televar Northwest, Inc., as of
June 30, 1996 and the related statements of operations, stockholders'
deficit, and cash flows for the years ended June 30, 1996 and June 30,
1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Jungle Street, Inc.,
including the accounts of its wholly-owned subsidiary Televar Northwest,
Inc., as of June 30, 1996, and the results of its operations and its cash
flows for the years ended June 30, 1996 and June 30, 1995, in conformity
with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that
Jungle Street, Inc., and its wholly-owned subsidiary Televar Northwest,
Inc., will continue as a going concern. As discussed in note 17 to the
financial statements, the Company has accumulated losses, negative working
capital, and a net capital deficit as of June 30, 1996, which raise
substantial doubt about the ability to continue as a going concern.
Management's plans in regard to these matters are also described in note
17. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.


                MANTYLA, MCREYNOLDS & ASSOCIATES
                --------------------------------
                Mantyla, McReynolds & Associates

Salt Lake City, Utah
October 24, 1996

                                     20
<PAGE>
<TABLE>
<CAPTION>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY-OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                               BALANCE SHEET
                               JUNE 30, 1996


                                   ASSETS

<S>                                                                <C>        
Current Assets
--------------
   Cash                                                            $     9,435
   Accounts receivable, net of allowance for
     doubtful accounts of $38,462                                       98,132
   Employee advances                                                       667
   Prepaid insurance                                                     4,275
   Deferred expenses - Note 6                                           50,816
   Note receivable - Note 7                                             20,000
   Current portion long-term notes receivable
      - Note 7                                                          29,234
                                                                   -----------

      Total Current Assets                                             212,559


Property and Equipment - Note 5
----------------------
   Equipment and furniture                                             441,098
   Equipment under capital lease                                        83,877
   Vehicles                                                             61,031
   Leasehold improvements                                               12,014
   Less: accumulated depreciation                                      (72,693)
                                                                   -----------

      Net Property and Equipment                                       525,327


Other Assets
------------
   Goodwill - Note 8                                                   125,405
   Deposits                                                             21,224
   Notes receivable - Note 7                                           111,000
   Less: current portion of notes receivable                           (29,234)
                                                                   -----------

      Total Other Assets                                                28,395
                                                                   -----------

   TOTAL ASSETS                                                    $   966,281
                                                                   ===========

               See accompanying notes to financial statements
</TABLE>

                                     21
<PAGE>
<TABLE>
<CAPTION>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY-OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                               BALANCE SHEET
                               JUNE 30, 1996

                   LIABILITIES AND STOCKHOLDERS' DEFICIT

<S>                                                                        <C>       
Current Liabilities
-------------------
   Accounts payable                                                        $  600,305
   Payroll taxes payable                                                       41,117
   Wages payable                                                               26,608
   Commissions payable                                                          4,125
   Unearned fees - Note 6                                                     137,341
   Interest payable                                                             3,825
   Notes payable - short-term - Note 9, 10                                    132,435
   Current portion of long-term liabilities - Note 11                          75,813
                                                                           ----------

      Total Current Liabilities
                                                                            1,021,569

Long-Term Liabilities
   Notes payable - Note 11                                                    255,166
   Capital leases payable - Note 12                                            64,247
   Less: current portion of long-term liabilities                             (75,813)
                                                                           ----------

      Total Long-Term Liabilities                                             243,600
                                                                           ----------

   Total Liabilities                                                        1,265,169

Stockholders' Deficit
   Common stock - 50,000,000 shares authorized, $0.001 par,
    1,697,420 shares issued and outstanding - Notes 1,4,10,16,19                1,697
   Additional paid-in capital                                                 376,057
   Stock held in trust - Note 1                                               (70,000)
   Accumulated deficit                                                       (606,642)
                                                                           ----------

      Total Stockholders' Deficit                                            (298,888)

   TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                             $  966,281
                                                                           ==========


               See accompanying notes to financial statements
</TABLE>

                                     22
<PAGE>
<TABLE>
<CAPTION>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                          STATEMENTS OF OPERATIONS
            FOR THE YEARS ENDED JUNE 30, 1996 AND JUNE 30, 1995

                                                                    1996                     1995
                                                              -------------              ----------
<S>                                                           <C>                        <C>       
Revenues - Note 3                                             $   1,697,104              $  392,803
Cost of sales                                                     1,453,733                 370,105
                                                              -------------              ----------

Gross profit                                                        243,371                  22,698

Selling, general and administrative expenses                        578,600                 130,718
                                                              -------------                 -------

Net loss from operations                                           (335,229)               (108,020)

Other Income/(Expense):
         Interest income                                              -0-                       414
         Interest expense                                           (53,690)                (12,001)
         Other income                                                21,655                  11,662
         Other expense                                                -0-                   (11,930)
                                                              -------------              -----------

         Total Other Income/(Expense)                               (32,035)                (11,855)
                                                              -------------              ----------

Loss from continuing operations
  before income taxes                                              (367,264)               (119,875)

Provision for income taxes                                            -0-                     -0-
                                                              -------------              ----------

Loss from continuing operations                                    (367,264)               (119,875)

Discontinued Operations:
         Loss from discontinued operations                            -0-                   (56,019)
         Gain from disposal of discontinued
           operations                                                 -0-                    69,562
                                                              -------------              ----------

         Total Discontinued Operations                                -0-                    13,543
                                                              -------------              ----------

Net loss                                                      $    (367,264)             $ (106,332)
                                                              =============              ==========

Loss per share:
         Loss from continuing operations                      $        (.34)                   (.24)
         Discontinued operations                                      -0-                       .03
                                                              --------------             ----------
         Net loss                                             $        (.34)                   (.21)
                                                              ==============             ==========

Weighted Average Number of Shares Outstanding                      1,069,261                500,300
                                                              ==============             ==========


              See accompanying notes to financial statements.
</TABLE>

                                     23
<PAGE>
<TABLE>
<CAPTION>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                    STATEMENTS OF STOCKHOLDERS' DEFICIT
            FOR THE YEARS ENDED JUNE 30, 1996 AND JUNE 30, 1995


                                                                  ADDITIONAL         STOCK
                                         COMMON         COMMON       PAID-IN           HELD      ACCUMULATED    STOCKHOLDERS'
                                         SHARES          STOCK       CAPITAL       IN TRUST          DEFICIT          DEFICIT
-----------------------------------------------------------------------------------------------------------------------------
<S>                                     <C>       <C>            <C>              <C>           <C>              <C>         
Balance, June 30, 1994                  500,300   $        500   $    78,931      $       0     $  (133,045)     $   (53,614)

Issued shares in exchange for
 services                                   100              0           100                                             100

Stock split                             979,700             98           (98)                                              0

Issued shares for purchase of
 equipment                               20,000              2        19,998                                          20,000

Net loss for the year ended
 June 30, 1995                                                                                     (106,332)        (106,332)

Adjustment to reflect the retro-
active restatement of capital
resulting from the merger of
Jungle Street, Inc. with Televar
Northwest, Inc.                        (999,800)          (100)          100
-----------------------------------------------------------------------------------------------------------------------------
Balance, June 30, 1995                  500,300   $        500  $     99,031      $       0     $  (239,377)     $  (139,846)

Issued shares to officers &
 shareholders for services              150,418             15         1,489                                           1,504

Issued shares to employees for
 services                                49,000              5           485                                             490

Purchase of shares to be held
 in trust as security for a note
 payable                                                                            (70,000)                         (70,000)

Issued shares in exchange for
 services                               752,250             75         9,175                                           9,250

Issued shares for retirement
 of debt                                511,665             51       306,927                                         306,978

Issued shares in exchange for
 personal guaranty                      150,000             15           (15)                                              0

Issued shares for cash                   30,000              3        29,997                                          30,000

Redemption of shares to retire a
 receivable                            (326,667)           (33)      (69,967)                                        (70,000)

Net loss for the year ended
 June 30, 1996                                                                                     (367,264)        (367,264)


               See accompanying notes to financial tatements.
</TABLE>

                                     24
<PAGE>
<TABLE>
<CAPTION>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                    STATEMENTS OF STOCKHOLDERS' DEFICIT
            FOR THE YEARS ENDED JUNE 30, 1996 AND JUNE 30, 1995

                                                                  ADDITIONAL         STOCK
                                         COMMON         COMMON       PAID-IN           HELD      ACCUMULATED    STOCKHOLDERS'
                                         SHARES          STOCK       CAPITAL       IN TRUST          DEFICIT          DEFICIT
-----------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>          <C>            <C>             <C>           <C>              <C>         
Adjustment to reflect the retro-
active restatement of capital
resulting from the merger of
Jungle Street, Inc. with Televar
Northwest, Inc.                      (1,316,666)  $       (132)  $       132                                    $           0
Issued shares of Jungle Street,
Inc. common stock for services        1,197,120          1,197        (1,197)                                               0
-----------------------------------------------------------------------------------------------------------------------------
Balance, June 30, 1996                1,697,420   $      1,697   $   376,057     $  (70,000)   $    (606,642)   $    (298,888)
=============================================================================================================================

              See accompanying notes to financial statements.
</TABLE>

                                     25
<PAGE>
<TABLE>
<CAPTION>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                          STATEMENTS OF CASH FLOWS
            FOR THE YEARS ENDED JUNE 30, 1996 AND JUNE 30, 1995


                                                                    1996                         1995
                                                              -----------------            -----------------
<S>                                                           <C>                          <C>              
CASH FLOWS PROVIDED/(USED) BY OPERATING
ACTIVITIES
Net loss                                                      $       (367,264)            $       (106,332)
Adjustments to reconcile net loss to net cash
used by operating activities:
  Depreciation and amortization                                         75,137                       16,335
  Issued common stock in exchange for services
    and interest                                                        41,104                          100
  VAR notes received for territorial rights                           (131,000)                           0
  Redeemed shares of common stock to
    retire receivable                                                  (70,000)                           0
  Allowance for bad debt                                                28,027                       10,615
  Loss/(gain) on sales of assets                                          (344)                       6,605
  (Increase)/decrease in:
    Accounts receivable                                                (71,207)                      (2,132)
    Employee advances                                                     (667)                         300
    Inventory                                                                0                       63,306
    Prepaid insurance                                                   (2,744)                      (1,531)
    Deferred expenses                                                  (50,816)                           0
    Deposits                                                           (19,000)                      (1,777)
  (Decrease)/increase in:
    Accounts payable                                                   506,232                       24,924
    Payroll taxes payable                                               37,134                       (5,431)
    Sales tax payable                                                        0                       (3,687)
    Wages payable                                                       25,133                       (7,525)
    Accrued commissions                                                  4,125                            0
    Unearned fees                                                      137,341                            0
    Accrued interest payable                                             3,498                          324
                                                              -----------------            -----------------
NET CASH PROVIDED/(USED) BY OPERATING ACTIVITIES              $        144,689             $         (5,904)

CASH FLOWS PROVIDED/(USED) BY INVESTING
ACTIVITIES
  Purchases of equipment                                      $       (399,052)            $        (24,345)
  Purchases of vehicles                                                (61,031)                     (28,038)
  Purchases of leasehold improvements                                   (5,456)                      (4,832)
  Proceeds from disposal of assets                                      24,340                       38,000
  Loans made                                                                 0                       (4,379)
  Collections on loans                                                   4,379                       59,387
  Goodwill                                                            (128,255)                           0
                                                              -----------------            -----------------
NET CASH PROVIDED/(USED) BY INVESTING ACTIVITIES              $       (565,075)            $         35,793


              See accompanying notes to financial statements.
</TABLE>

                                     26
<PAGE>
<TABLE>
<CAPTION>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                          STATEMENTS OF CASH FLOWS
            FOR THE YEARS ENDED JUNE 30, 1996 AND JUNE 30, 1995

                                                                    1996                         1995
                                                              -----------------            -----------------
<S>                                                           <C>                          <C>              
CASH FLOWS PROVIDED/(USED) BY FINANCING
ACTIVITIES:
  New borrowings                                              $        558,994             $         91,276
  Debt reduction                                                      (100,609)                    (113,086)
  Purchase of treasury stock                                           (70,000)                           0
  Issued shares of common stock for cash                                30,000                            0
                                                              -----------------            -----------------
NET CASH PROVIDED/(USED) BY FINANCING ACTIVITIES              $        418,385             $        (21,810)

CASH AT BEGINNING OF YEAR                                               11,436                        3,357
                                                              -----------------            -----------------

CASH AT END OF YEAR                                           $          9,435             $         11,436
                                                              =================            =================

SUPPLEMENTAL DISCLOSURES
  Noncash investing and financing transactions:
    Equipment acquired by capital lease                       $              0             $         83,878
    Equipment acquired by issuing shares of
      common stock                                                           0                       20,000
    Notes payable retired by issuing shares
      of common stock                                                  277,118                            0

  Interest paid                                               $         50,191             $         14,245
  Income taxes paid                                                          0                            0


              See accompanying notes to financial statements.
</TABLE>

                                     27
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996

Note 1  Summary of Significant Accounting Policies
        ------------------------------------------

        Company Background/ Basis of Presentation Jungle Street, Inc. was
        incorporated July 10, 1980, under the laws of the state of Utah. In
        August 1980, Jungle Street, Inc. acquired Utah real estate using
        the proceeds of a limited public offering conducted in Utah. From
        inception, Jungle Street, Inc. suffered losses from its real estate
        operations, and, in 1993, Jungle Street sold all of its Utah real
        estate and became an inactive corporation.

        On August 29, 1996 Jungle Street, Inc. merged with Televar
        Northwest, Inc., a Washington corporation. The merger was
        accomplished through Jungle Street, Inc.'s wholly owned subsidiary,
        a recently formed Washington corporation with the same name.
        However, because Jungle Street's assets, liabilities and operations
        are nominal, these financial statements include the activity of
        both Televar Northwest, Inc. and Jungle Street, Inc., retroactively
        restated to the beginning of the periods covered herein. Unless
        otherwise specifically stated, the combined companies are hereafter
        collectively referred to as the "Company."

        The Company is in the business of providing Internet access and
        long distance telephone service. The Company markets its services
        primarily through a network of Value Added Resellers ("VARs") in
        the geographical region of the northwestern United States. The VARS
        are assigned a specific territory from which they market the
        Company's services.

        In February, 1995, the Company disposed of its telephone equipment
        and servicing business. The Company has also been involved as a
        wholesaler of cellular telephone access. However, the Company's
        contract with its cellular telephone access provider has
        terminated. Although the Company may re-enter this segment of
        business, it is currently emphasizing Internet access and
        long-distance telephone service.

        Cash
        ----

        Cash consists of cash on hand and on deposit in commercial banks.

                                     28
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996

Note 1  Summary of Significant Accounting Policies [continued]
        ------------------------------------------------------

        Depreciation
        ------------
        Property and equipment are stated at cost. Depreciation is provided
        using the straight-line basis over the useful lives of the related
        assets. The amounts reported as depreciation expense and
        accumulated depreciation include the amortization expense and
        accumulated amortization of equipment under capital lease.
        Expenditures for maintenance and repairs are charged to expense as
        incurred.

        Loss Per Share
        --------------
        Loss per common share is based on the weighted average number of
        common shares outstanding. Common stock equivalents have not been
        included in the computation as their effect would be antidilutive.

        Additional Paid-In Capital
        --------------------------
        The amount shown on the financial statements as additional paid-in
        capital consists of proceeds from the sale or issuance of common
        stock in excess of its par value, reduced by any direct expenses of
        such sales or issuances.

        Stock Held in Escrow
        --------------------
        The Company repurchased 326,666 shares of its common stock from a
        founding shareholder. The consideration given for said shares was
        $70,000. These shares are held in escrow as collateral for the
        repayment of a note with an original principal balance of $63,000
        ($70,000 less a down payment of $7,000) and a remaining principal
        balance of $57,155 at June 30, 1996. See note 11.

Note 2  Discontinued Operations
        -----------------------
        On February 28, 1995, the Company discontinued its telephone
        equipment and servicing division by selling all of the assets, net
        of the related liabilities, of this division. There are no
        remaining assets or liabilities related to this division as of June
        30, 1996. Any taxable gains reported in conjunction with this
        transaction are offset by net operating losses.

                                     29
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996

Note 3  Significant Concentrations of Risk
        ----------------------------------

        Credit Risk - The Company's primary operations are currently in the
        geographical region of the northwestern United States. Customers of
        the Company consist primarily of individuals who utilize the
        Internet access capabilities offered by the Company. The accounts
        receivable of the Company are unsecured.

        Revenue/Supplier Risk - Revenues for the year ended June 30, 1996
        were from the following sources:

             Long Distance                   $    646,884
             Internet Access                      549,563
             Value Added Resellers                447,940
             Cellular Access                       43,724
             Other                                  8,993
                                             ------------
                                             $  1,697,104

        The Company's long distance business is dependant on its supplier
        of wholesale long distance service. Should the supplier terminate
        the Company's access capability, the Company would be forced to
        seek another supplier. In addition, the Company has engaged Value
        Added Resellers ("VAR") to market its Internet access in various
        geographical territories. The Company has received significant fees
        in conjunction with the VAR agreements sold for the year ended June
        30, 1996. The Company's revenue from this segment is contingent on
        the Company's ability to continue to attract VARs.

        Netscape Communications provides the Internet software (See note
        13) the Company includes with its Internet installation package for
        its Internet Customers. Should the Company lose its rights to
        distribute this software, the Company would be required to
        substitute other Internet software which may not be as widely
        accepted as the Netscape software.

Note 4  Related Party Transactions
        --------------------------
        In conjunction with the merger described in notes 1 & 16, Jungle
        Street, Inc. issued 1,125,000 shares to consultants, who were
        shareholders of Jungle Street, Inc prior to the merger and who
        provided financial and other services to Jungle Street, Inc. The
        Company also agreed to reserve 750,000 shares of its common stock
        to be issued as commission to a consulting firm, which is owned and
        managed by shareholders of the Company, along with a payment of
        $50,000

                                     30
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996

Note 4  Related Party Transactions [continued]
        --------------------------------------
        cash, in the event capital raising services performed by the
        consulting firm result in net proceeds to the Company of at least
        $1,000,000.

        On October 2, 1996, the Company loaned its president $12,000. The
        unsecured loan bears interest at 10 % per annum, payable in 26
        equal semi-monthly installments of $515, commencing October 15,
        1996, until paid in full. Said payments will be withheld from the
        President's semi-monthly payroll checks. There is no prepayment
        penalty.

Note 5  Property and Equipment
        ----------------------
        The major classes of assets as of the balance sheet date are as
        follows:

<TABLE>
<CAPTION>
                                                                  Accumulated
                  Asset Class                           Cost     Depreciation           Method/Life
         -----------------------------          -----------      ------------      ----------------
         <S>                                    <C>              <C>               <C>
         Equipment & furniture                  $   441,098      $     46,862      SL/5 & 10 years
         Equipment under capital lease               83,877            19,731      SL/5 years
         Vehicles                                    61,031             4,563      SL/5 years
         Leasehold improvements                      12,014             1,537      SL/life of lease
                                                -----------      ------------
                  Total                         $   598,020      $     2,693
                                                ===========      ===========
</TABLE>

Note 6  Deferred Expenses/Unearned Income
        ---------------------------------
        Deferred Expenses - The Company pays commissions to its VARs at the
        time the monthly, quarterly, or annual fees are received by
        customers located in the VARs' assigned territory. These
        commissions are subject to offset if the underlying customers
        terminate Internet access service during a quarter or year for
        which the customer has prepaid and is due a refund. The Deferred
        Expenses account is comprised of those commissions still subject to
        offset. The Company recognizes the commission expenses paid when
        such commission is no longer subject to offset. Since all
        commissions will be paid within one year, the entire amount is
        considered a current asset.

        Unearned Income - The Company collects fees for its Internet access
        service under monthly, quarterly and annual billing programs. The
        Company has established an unearned fees account for recording the
        advance payments, which are amortized into earnings on a monthly
        basis as the services are provided.

                                     31
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996

Note 7  Notes Receivable
        ----------------
        The Company has long and short-term notes receivable from VARS who
        have purchased rights to various territories. The notes are
        summarized as follows:

<TABLE>
<CAPTION>
        Short-Term
        ----------

        Date of     Monthly     Interest     Original      Balance
           Note     Payment         Rate      Balance      6/30/96
        -------     -------     --------     --------     --------
        <S>            <C>            <C>     <C>          <C>    
        5/31/96        $500           0%      $20,000      $20,000
</TABLE>

        This note has a balloon payment of $17,500 due December 15, 1996.

<TABLE>
<CAPTION>
        Long-Term
        ---------

        Date of     Monthly     Interest     Original       Balance      Current
           Note     Payment         Rate      Balance       6/30/96      Portion
        -------     -------     --------     --------      --------      -------
        <S>          <C>             <C>     <C>           <C>           <C>    
        6/28/96      $3,227          10%     $100,000      $100,000      $27,452
        5/31/96         442          10%       11,000        11,000        1,782
                                             --------      --------      -------
                                             $111,000      $111,000      $29,234
</TABLE>

Note 8  Goodwill
        --------
        In February, 1996, the Company entered into an agreement with a
        third party to purchase certain assets, primarily computer
        equipment, telephone equipment, and customer lists. The purchase
        price was $147,125, with $18,870 allocated to tangible assets and
        $128,255 to intangible assets (Goodwill). Goodwill is specifically
        classified in this transaction as the customer base purchased by
        the Company. The useful life of the goodwill is determined to be 15
        years, with amortization calculated accordingly. The balance as of
        June 30, 1996 is $125,405, net of accumulated amortization of
        $2,850. A down payment of $60,000 was made at the closing, with the
        adjustable balance of $87,125 to be paid over a term of thirty-six
        months at nine percent (9%) interest. See note 11.

Note 9  Notes Payable - Short-Term - Banks
        ----------------------------------
        The Company had a short-term note payable to a bank in the
        principal amount of $55,413, due August 15, 1996, and bears
        interest at 1.5% above the bank's index rate which was 9% at the
        loan's inception and 8.25% on March 20, 1996. The original note was
        entered into on June 8, 1995, with a maturity date of October 15,
        1995. The note was renewed on October 15, 1995, January 15, 1996,
        and April 15, 1996, which resulted in the current due date of
        August 15,

                                     32
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996


Note 9  Notes Payable - Short-Term - Banks [continued]
        ----------------------------------------------
        1996. Under the terms of the note, the interest rate would not
        decrease below 9%. The Company refinanced this note with a loan
        from another lender prior to the note's due date. See note 16. This
        note was secured by all accounts receivable, including all local,
        state, and federal tax refunds which may become due, and equipment
        then owned by the Company, or subsequently acquired. The security
        agreement was formalized with a financing statement [UCC-1]. The
        note was personally guaranteed by two officers/shareholders of the
        Company.

        The Company also had a short-term note payable to a bank in the
        original amount of $29,533, bearing interest at 11.99%, and
        requiring payments of $577 per month for a period of 72 months. The
        balance outstanding on June 30, 1996 was $4,272. The security for
        this loan was a vehicle. In January, 1996, an employee of the
        Company was involved in an accident with the vehicle wherein the
        vehicle was completely destroyed. The insurance company has made
        its final adjustment on the loss by making a joint payment to the
        Company and the secured bank. The shortfall from the insurance
        payment was $4,272 and was paid to the bank subsequent to June 30,
        1996.

Note 10 Notes Payable - Short-Term - Individuals
        ----------------------------------------
        The Company has two short-term notes payable to individuals. One
        note was issued December 1, 1995, in the principal amount of
        $52,750, and bears interest at an effective rate of 22%, with the
        entire principal and interest due on March 1, 1996. The note was
        renewed for $52,750, and bears interest at 18% with the entire
        amount of principal and interest due August 31, 1996. When the note
        was renewed, a provision was added allowing for the conversion of
        the principal and interest of the note, in whole or in part, for
        common stock of the Company, at a conversion rate of $2.50 per
        share. Subsequent to June 30, 1996, the Company satisfied the note
        in full by paying $12,497.50 in cash and issuing 45,000 shares of
        common stock.

        The second note was issued on April 25, 1996, in the principal
        amount of $20,000, and bears interest at 18%, with entire principal
        and interest due on October 26, 1996. The note provides for the
        conversion of the principal and interest of the note, in whole or
        in part, for common stock of the Company, at the conversion rate of
        $2.50 per share, at the option of the note holder. If the note is
        held to maturity, the note could be converted for up to 8,720
        shares of common stock. The Company is in default with respect to
        payments due under the note.

                                     33
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996


Note 11 Notes Payable - Long Term
        -------------------------
        The Company has several long term notes payable as follows:

             Note payable to an individual in the original amount of
             $63,000, bearing interest at 10%, and secured by 326,666
             shares of the Company's common stock, which are held in escrow
             pending full payment of the note. The note requires monthly
             payments of $1,338 for a 60-month period December 1, 1995 and
             continuing through November 1, 2000. The outstanding balance
             at June 30, 1996 was $57,155.

             Unsecured note payable to a company in the original amount of
             $85,000, bearing interest at 8%, requiring monthly payments of
             $1,325 for an 84- month period beginning July 1, 1993 and
             continuing through June 1, 2000. The outstanding balance at
             June 30, 1996 was $54,267

             Note payable to a company in the original amount of $87,125,
             bearing interest at 9%, and partially secured by certain
             assets acquired under the agreement. The note requires monthly
             payments of $2,771 for a 36-month period commencing June 10,
             1996 and continuing through May 10, 1999. The outstanding
             balance at June 30, 1996 was $85,454.

             Note payable to a finance company in the original amount of
             $30,375, bearing interest at 11%, and secured by a vehicle.
             The note requires monthly payments of $581 for a 72-month
             period commencing April 15, 1996 and continuing through March
             15, 2002. The outstanding balance at June 30, 1996 was
             $29,148.

             Note payable to a finance company in the original amount of
             $30,370, bearing interest at 10.9%, and secured by a vehicle.
             The note requires monthly payments of $579 for a 72-month
             period commencing April 15, 1996 and continuing through March
             15, 2002 . The outstanding balance at June 30, 1996 was
             $29,142.

                                     34
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996


Note 11 Notes Payable - Long Term [continued]
        -------------------------------------
        The following table sets forth the Company's principal obligations
        on long term notes payable for the coming five years:

<TABLE>
<CAPTION>
                                                                                 Finance
                 Year      Individual          Company          Company             Total
           ----------      ----------      -----------       ----------       -----------
           <S>             <C>             <C>               <C>              <C>        
              1996-97      $   10,807      $    38,624       $    7,512       $    56,943
              1997-98          11,944           42,118            8,725            62,787
              1998-99          13,199           43,750            9,735            66,684
              1999-00          14,584           15,230           10,633            40,447
              2000-01           6,620            -0-             12,090            18,710
           Thereafter           -0-              -0-              9,595             9,595
                           ----------      -----------       ----------       -----------
                           $   57,154      $   139,722       $   58,290       $   255,166
</TABLE>

Note 12 Capital Leases Payable
        ----------------------
        The Company has three capital leases which were utilized for the
        purchase of computer and telephone equipment used in their
        operations:

<TABLE>
<CAPTION>
                                          Equipment              Monthly
                                        Under Lease              Payment
                                       ------------             --------
             <S>                       <C>                      <C>     
             Lease 1                   $     18,047             $    582
             Lease 2                         19,637                  490
             Lease 3                         46,193                1,243
                                       ------------             --------
                                       $     83,877             $  2,315
</TABLE>

        The purchase option at the conclusion of each of the above lease
        arrangements are 10% of the leased equipment cost at inception
        ($1,805), one dollar, and one dollar, respectively. Amortization on
        capital lease assets for 1995-96 totaled $16,776. Accumulated
        amortization through June 30, 1996 totaled $19,731.

                                     35
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996


Note 12 Capital Leases Payable [continued]
        ----------------------------------
        The following table is a schedule by years of future minimum lease
        payments under the capital leases, together with the present value
        of the net minimum lease payments as of June 30, 1996:

        Year ending June 30:
               1997                                       $     27,779
               1998                                             24,866
               1999                                             19,549
               2000                                              4,900
               2001                                              -0-
                                                          ------------
           Total minimum lease payments                         77,094
           Less: Amount representing interest                          (12,847)
                                                                      ---------

           Present value of net minimum lease payments    $     64,247
                                                          ============

Note 13 License Agreement
        -----------------
        The Company has a non-exclusive, non-transferrable license
        ("License") from Netscape Communications to distribute Netscape
        Internet software in conjunction with the Company's Internet access
        service. The License authorizes the Company to distribute a minimum
        of 2,500 copies of said software during the one-year initial term
        of the agreement. At the conclusion of the initial year (Contract
        entered into December 8, 1995), the License is automatically
        renewed for successive one year periods, if, during the immediately
        preceding twelve months, the Company has paid Netscape for the
        minimum number of copies. As of the auditors' report date, the
        Company had already complied with the terms of the License for the
        initial year. Additional copies of the software may be licensed
        upon advance payment for the software. After the initial year of
        the License, either party may terminate the License for
        "convenience" upon at least sixty days prior written notice.

Note 14 Miscellaneous Income
        --------------------
        Miscellaneous income is comprised primarily of income received as a
        result of the settlement of a dispute with one of the Company's
        suppliers and rental income from a sub-lease of previously occupied
        office space.

                                     36
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996


Note 15 Operating Leases
        ----------------
        The Company has a lease agreement for its principal offices at an
        initial rate of $1,800 per month, commencing March 15, 1995 and
        terminating March 15, 2005. The lease is renewable for an
        additional two years, providing the Company notifies lessor no
        later than thirty (30) days prior to March 15, 2000.

        Monthly rent payments shall increase by 5% on each anniversary date
        of the lease. Future minimum lease payments under this agreement
        are as follows:

                               Year               Amount
                         ----------             --------
                            1996-97             $ 13,058
                            1997-98               24,211
                            1998-99               25,421
                            1999-00               26,693
                            2000-01               28,027
                         Thereafter              115,113
                                                --------
                                                $242,523

        The Company vacated offices at a previous location during 1995.
        There is currently a dispute with the landlord, that claims the
        Company is liable for lease payments through the term of the lease.
        As of the auditors' report date, no agreement had been reached, nor
        had a lawsuit been filed. The Company has accrued a provision of
        $40,000 in its accounts payable to cover any contingent liability
        associated herewith. Management contends that the landlord failed
        to work with willing and able successor tenants and continually
        failed to use reasonable efforts to mitigate damages. Management
        intends to vigorously contest liability under the lease agreement.

Note 16 Subsequent Events
        -----------------
        Merger With Jungle Street, Inc.- On August 29, 1996, Televar
        Northwest, Inc. merged with Jungle Street, Inc, a Washington
        corporation and wholly owned subsidiary of Jungle Street, Inc. a
        Utah corporation. The Washington corporation subsidiary was the
        Surviving corporation in this merger, and it changed its name to
        Televar, Inc.

                                     37
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996


Note 16 Subsequent Events [continued]
        -----------------------------
        Each common share of Televar Northwest, Inc. outstanding at the
        time of the merger was converted to five shares of common stock in
        Jungle Street. At the time of the merger, the Company had 2,363,655
        shares issued and outstanding, which became 11,818,325 shares in
        the merger.

        In conjunction with the merger, Jungle Street, Inc. also issued
        1,125,000 shares to consultants, who were shareholders of Jungle
        Street, Inc prior to the merger and who provided financial and
        other services to Jungle Street, Inc. The Company also agreed to
        reserve 750,000 shares of its common stock to be issued as
        commission to a consulting firm, which is owned and managed by
        shareholders of the Company, along with a payment of $50,000 cash,
        in the event capital raising services performed by the consulting
        firm result in net proceeds to the Company of at least $1,000,000.

        Bridge Loan - On September 25, 1996 the Company entered into a loan
        agreement with a lender for $500,000 in "bridge" financing. The
        loan bears interest at 18 % per annum and is secured by all assets,
        tangible and intangible, including trade secrets, either now owned
        or hereafter acquired, of the Company. There is no prepayment
        penalty. Additional security includes any rights of the Company to
        the receipt of money, either now existing or hereafter arising.
        Personal guaranties were provided by the Chief Executive
        Officer/Chairman and the President of the Company. The agreement
        requires a $20,000 loan fee and interest payments as follows:

                         October 1, 1996            $ 1,250
                         November 1, 1996             7,500
                         December 1, 1996             7,500
                         January 1, 1997              7,500

        The entire principal balance, together with all outstanding accrued
        interest is due and payable on or before the earlier of: 1) January
        1, 1997 or 2) the closing of an offering of common stock and/or
        warrants in an amount greater than $2,000,000. However, the Company
        may, at its option, extend the due date up to April 1, 1997, if the
        Company is not in default under any of the terms or conditions of
        the agreement, and the Company pays a third party, designated by
        the lender, an extension fee of 1%, 1.5%, and 2% of the then
        outstanding balance, respectively, on or before January 1, 1997,
        February 1, 1997, March 1, 1997, along with the interest payment of
        $7,500.

                                     38
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996


Note 16 Subsequent Events [continued]
        -----------------------------
        In addition to the forgoing, the Company executed a Common Stock
        Purchase Warrant, entitling the lender to purchase 65,000 shares of
        common stock at an exercise price of $1.81 per share. The warrant
        may be exercised, in whole or in part, at any time through
        September 25, 2001. The lender has certain registration rights with
        respect to the shares.

        If the Company defaults on its obligations under the Bridge loan
        documents, the lender may convert its unpaid debt to unregistered
        and restricted shares of the Company at a rate of $0.75 per share.

        Short-Term Bank Loans - On July 1, 1996, the Company received a
        $200,000 line of credit from a bank with a maturity date of January
        5, 1997. The loan interest rate was variable at 2 % over the bank's
        "index" rate, which was 8.25 % at the time of the loan closing.
        This loan was secured by all assets, tangible and intangible, of
        the Company. Concurrently, the Company received a $60,000 loan from
        the same bank, which was utilized to repay in full the bank loan
        described in note 9. These loans were paid in full from proceeds of
        the Bridge Loan discussed above.

        Promissory Note - The Company received a $100,000 loan from an
        individual on September 1, 1996. The loan bears interest at 18 %
        per annum, and is due and payable on the first day of each month,
        beginning October 1, 1996, with a maturity date of January 31,
        1997. The lender also has the right to purchase common stock of the
        Company at the price of $1.00 per share, exercisable until June 30,
        1997.

        Lease Agreements - Since June 30, 1996, the Company has entered
        into two lease agreements covering equipment used in the Company's
        operations. The first lease, executed July 11, 1996, is for a
        period of 36 months with monthly payments of $3,707. An option to
        purchase the equipment covered under the lease at the end of the
        lease term is available at an option price of $4,884. The second
        lease, executed August 6, 1996 is for a period of 36 months with
        monthly payments of $2,915. An option to purchase the equipment
        covered under the lease at the end of the lease term is available
        at an option price of $7,796.

                                     39
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996


Note 16 Subsequent Events [continued]
        -----------------------------
        Stock Incentive Plan - A Stock Incentive Plan ("Plan") was approved
        by the Board of Directors in September 1996. The Plan has not yet
        been submitted to the shareholders of the Company for approval. The
        purpose of the Plan is to attract and retain the services of
        selected employees, officers, directors, agents, consultants,
        advisors, distributors, and independent contractors.

        The shares to be offered under the Plan consist of the Company's
        common stock. The number of shares that may be issued under the
        Plan shall not exceed 3,000,000 shares. Common shares available
        under the Plan shall include authorized and unissued shares or
        reacquired shares. All awards granted under the Plan shall be
        nonassignable and nontransferable. Should any award offered under
        this Plan expire, terminate, or be canceled or forfeited, the
        unissued shares subject to such award shall again be available
        under the Plan.

        The duration of the Plan shall continue in effect until the earlier
        of: 1) ten years from the date of adoption by the Board of
        Directors, or 2) the date on which all shares available for
        issuance under the Plan have been issued and all restrictions on
        such shares have lapsed. Termination of the Plan shall not affect
        any outstanding awards, nor the rights of the Company under the
        Plan.

        Restrictions: 1) No employee may be granted an incentive stock
        option ("ISO") award under the Plan if the aggregate fair market
        value, on the date of the grant, for which an ISO is exercisable
        for the first time by the optionee during any calendar year exceeds
        $100,000. 2) Any employee possessing more than 10 % of the voting
        power of all classes of stock of the Company may be granted an ISO
        under the Plan only if the option price is at least 110 % of the
        fair market value and the award is not exercisable after five years
        from the date it is granted. 3) The duration of awards granted
        under the Plan shall continue in effect for the period fixed by the
        Board of Directors, except that no such award shall be exercisable
        after the expiration of 10 years from the dated it is granted. 4)
        The option price shall be determined by the Board of Directors at
        the time of grant.

                                     40
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996



Note 16 Subsequent Events [continued]
        -----------------------------
        Stock Appreciation Rights: The Board of Directors may grant stock
        appreciation rights in conjunction with the grant of a stock option
        or as a separate award. The holder of such grant shall be entitled
        to receive an amount equal in value to the excess of the fair
        market value of the common shares on the date of exercise over the
        fair market value on the date of the grant. Such awards may be paid
        in the form of common stock of the Company valued at fair market
        value, or cash, or a combination of cash and common stock. If stock
        appreciation rights are granted in conjunction with stock options,
        or vice versa, the grant of one shall be extended only to the same
        extent and conditions as the other. Upon the exercise of a stock
        appreciation right associated with a stock option, the related
        stock option terminates, or vice versa.

        Other Awards: The Plan also provides for the award of restricted
        stock, stock bonuses, cash bonus rights, and performance units.

        Loan to Officer - On October 2, 1996, the Company loaned its
        president $12,000. The unsecured loan bears interest at 10 % per
        annum, payable in 26 equal semi-monthly installments of $515,
        commencing October 15, 1996, until paid in full. Said payments will
        be withheld from the President's semi-monthly payroll checks. There
        is no prepayment penalty.

Note 17 Liquidity
        ---------
        The Company has incurred substantial losses and has a net working
        capital deficit of $809,010 as of June 30, 1996. Financing the
        Company's operations to date has been primarily from the sale of
        capital stock and borrowings. The Company's ability to achieve a
        level of profitable operations and/or additional financing may
        impact the Company's ability to continue as it is presently
        organized. Resolution of this issue is dependent on management's
        plans to raise funding through the sale of its equity securities in
        a private placement or public offering.

Note 18 Accounting for Income Taxes
        ---------------------------
        The Company accounts for income taxes in accordance with Statement
        of Financial Accounting Standards No. 109, which is effective for
        fiscal years beginning after December 15, 1992. The Statement
        requires the recognition of deferred tax assets and liabilities for
        the temporary differences between the financial reporting basis and
        tax basis of the Company's assets and liabilities at enacted tax
        rates expected to be in effect when such amounts are realized or
        settled. For the year ended June 30, 1996, the Company had no
        significant income tax expenses due to operating losses incurred.
        Any deferred tax benefit arising from the operating losses carried
        forward would be offset entirely by a valuation allowance since it
        is less than likely that the Company will be sufficiently
        profitable in the future to take advantage of the losses carried
        forward.

                                     41
<PAGE>
                            JUNGLE STREET, INC.
           INCLUDING THE ACCOUNTS OF ITS WHOLLY OWNED SUBSIDIARY
                          TELEVAR NORTHWEST, INC.
                       NOTES TO FINANCIAL STATEMENTS
                               JUNE 30, 1996


Note 19 Directors' Services Agreement
        -----------------------------
        Three of the Company's outside directors have agreed to serve as
        financial consultants of the Company in consideration for shares in
        the Company. The individuals received a total of 75,000 (25,000
        each) shares in exchange for board services and 675,000 (50,000
        each to two of the individuals and 575,000 to one of the
        individuals) shares for financial consulting services.

        These directors agreed to use their best efforts, expertise and
        contacts in the financial community to present potential financing
        sources to the Company and to otherwise assist the Company in its
        capital-raising efforts.

        At the time this agreement was executed, the Company had options to
        repurchase the shares issued in conjunction with the financial
        consulting services. However, in consideration for the personal
        guarantees of these directors on certain debts of the Company, the
        repurchase provision of this agreement was waived by the Company.
        These directors are now fully vested in these shares.

                                     42
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
        ACCOUNTING AND FINANCIAL DISCLOSURE


                              Not Applicable.

                                     43
<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

     The following table sets forth information as of September 30, 1996
regarding the directors and executive officers of the Company.

<TABLE>
<CAPTION>
NAME                           Age              Position with Company
----                           ---              ---------------------
<S>                            <C>              <C>
Charles D. DeJong              36               Chairman of the Board and
                                                Chief Executive Officer

Mark D. Hamilton               36               President and Director

Nick A. Gerde                  51               Director

Roger P. Vallo                 61               Director

Donald B. Cotton               58               Director

Donald A. Wright*              44               Director
----------------
<FN>
*Mr. Wright resigned as a Director of the Company effective November 6, 1996.
</FN>
</TABLE>

     Charles D. DeJong is the Chief Executive Officer and Chairman of the
Company's Board of Directors. He has been with the Company since its
acquisition of Televar in August 1996 and with Televar as an owner and
officer since 1993. Mr. DeJong is a former practicing corporate attorney
and partner with a Seattle-based law firm. Mr. DeJong is responsible for
strategic planning and oversees legal and regulatory affairs of the
Company.

     Mark D. Hamilton is the President of the Company. He has been with the
Company since its acquisition of Televar in August 1996 and with Televar as
an owner and officer since 1994. Mr. Hamilton is a ten-year veteran of the
telecommunications industry, having previously served as a manager for MCI
in Canada and as Chief Executive Officer of the largest prepaid long
distance calling card company in Canada. Mr. Hamilton manages the
day-to-day operations of the Company.

     Donald A. Wright was a director of the Company since its acquisition
of Televar, Inc., in August 1996 until his resignation in November 1996. He
has been President of PCT Holdings, Inc., a Washington corporation, and its
predecessors since 1990.

     Nick A. Gerde has been a director of the Company since August 30,
1996. Mr. Gerde has been the Vice President, Finance, and Chief Financial
Officer of PCT Holdings, Inc., a Washington corporation, and its
predecessors since February 1995, and its Treasurer since August 1996. Mr.
Gerde served as Controller/CFO of Hydraulic Repair & Design, Inc., a
regional hydraulic component repair and wholesale distribution

                                     44
<PAGE>
company, from March 1990 through April 1993; Business Development
Specialist with the Economic Development Council of North Central
Washington from July 1993 to June 1994; and vice president and secretary of
Televar from July 1994 to February 1995. Mr.
Gerde is a certified public accountant.

     Donald B. Cotton has been a director of the Company since August 1996.
He has been a director of PCT Holdings, Inc., and its predecessors since
May 1994. He was a director of Pacific Coast Technologies, Inc., from
October 1993 to October 1994. Mr. Cotton retired from GTE in 1993, where he
last served as a vice president. He is currently self-employed as a
software consultant.

     Roger P. Vallo has been a director of the Company since August 1996.
He has been a director of PCT Holdings, Inc., and its predecessors since
May 1994. Mr. Vallo served as a director of Pacific Coast Technologies,
Inc., from February 1991 to November 1995 and as Secretary of that company
from July 1993 to October 1994. From 1990, he served as a director of the
predecessor of Pacific Coast Technologies, Inc., and subsequently as a
director of Pacific Coast Technologies, Inc. Mr. Vallo also is the
President and Chief Executive Officer of Prudential Preferred Properties in
Everett, Washington.

     Directors of the Company hold office until the next annual meeting of
shareholders and until their successors have been elected and duly
qualified. Non-employee directors receive no salary for their services and
receive no fee from the Company for their participation in meetings,
although all directors are reimbursed for reasonable travel and other
out-of-pocket expenses in attending meetings of the Board. Executive
officers are elected by the Board of Directors of the Company at the first
meeting after each annual meeting of shareholders and hold office until
their successors are elected and duly qualified.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Based solely on a review of the copies of the forms provided to the
Company, or written representations that no other filing of forms was
required, the Company believes that during the fiscal year ended June 30,
1996, all Section 16(a) filing requirements applicable to such reporting
persons were complied with.

                                     45
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION

     The following table sets forth the annual compensation of Charles D.
DeJong for services in all capacities to the Company during the fiscal year
ended June 30, 1996. No officer of the Company received annual salary and
bonuses exceeding $100,000 in the fiscal year ended June 30, 1996.
Furthermore, Mr. DeJong has not been awarded or been paid by the Company,
or has otherwise earned, any long-term compensation awards, including stock
options or other similar rights.

<TABLE>
<CAPTION>
                                                          ANNUAL COMPENSATION
                                                 ---------------------------------------
                                                                            Other Annual
                                    Fiscal        Salary        Bonus       Compensation
NAME AND PRINCIPAL  POSITION        Year(1)          ($)          ($)                ($)
----------------------------        -------      -------        -----       ------------
<S>                                    <C>       <C>                <C>              <C>
Charles D. DeJong                      1996      19,086             0                0
Chairman and CEO(2)(3)
-----------
<FN>
(1)  Information is shown for Televar's fiscal year ended June 30. Mr.
     DeJong was employed by Televar during this period. Information with
     respect to fiscal years prior to the last completed fiscal year has
     been omitted pursuant to the General Instruction to Item 402(b) of
     Regulation S-B.

(2)  Mr. DeJong became the Chief Executive Officer of the Company in August
     1996 upon effectiveness of the Merger. See Item 1 - "Description of
     Business - Overview." Prior to the Merger, Don C. Morrison served as
     Chief Executive Officer of the Company. Mr. Morrison received no
     compensation for his services in such capacity.

(3)  The compensation shown was paid by Televar.
</FN>
</TABLE>

1996 STOCK INCENTIVE PLAN

     The Company's 1996 Stock Incentive Plan (the "Plan") provides for the
award of incentive stock options ("ISOs") to key employees and the award of
non-qualified stock options ("NSOs"), stock appreciation rights ("SARs"),
bonus rights, and other incentive grants to employees and certain
non-employees (other than non-employee directors) who have important
relationships with the Company or its subsidiaries. The Plan has been
adopted by the Board of Directors but has not been submitted to the
shareholders for approval. No options or other incentive awards have been
granted under the Plan.

     Administration. The Plan may be administered by the Board of Directors
or by a committee of directors or officers of the Company. The Board of
Directors has designated an Option Committee to administer the Plan. The
Option Committee determines and designates the individuals to whom awards
under the Plan should be made and the amount and terms and conditions of
the awards, except that if officers of the Company serve on the Option
Committee it may not grant options to such officers. The Option Committee
may adopt and amend rules relating to the administration of the Plan, but
only the Board of Directors may amend or terminate the Plan. The Plan is
administered in accordance with Rule 16b-3 adopted under the Exchange Act.

                                     46
<PAGE>
     Eligibility. Awards under the Plan may be made to employees, including
employee directors, of the Company and its subsidiaries, and to nonemployee
agents, consultants, advisors, and other persons (but not including
non-employee directors) that the Option Committee believes have made or
will make an important contribution to the Company or any subsidiary
thereof.

     Shares Available. Subject to adjustment as provided in the Plan, a
maximum of 3,000,000 shares of Common Stock are reserved for issuance
thereunder. The maximum number of shares with respect to which options may
be granted to any person during any fiscal year is 1,000,000. If an option,
SAR or performance unit granted under the Plan expires or is terminated or
canceled, the unissued shares subject to such option, SAR or performance
unit are again available under the Plan. In addition, if shares sold or
awarded as a bonus under the Plan are forfeited to the Company or
repurchased thereby, the number of shares forfeited or repurchased are
again available under the Plan.

     Term. Unless earlier terminated by the Board, the Plan will continue
in effect until the earlier of: (i) ten years from the date on which the
Plan is adopted by the Board, and (ii) the date on which all shares
available for issuance under the Plan have been issued and all restrictions
on such shares have lapsed. The Board may suspend or terminate the Plan at
any time except with respect to options, performance units, and shares
subject to restrictions then outstanding under the Plan.

     Stock Option Grants. The Option Committee may grant ISOs and NSOs
under the Plan. With respect to each option grant, the Option Committee
determines the number of shares subject to the option, the option price,
the period of the option, the time or times at which the option may be
exercised (including whether the option will be subject to any vesting
requirements and whether there will be any conditions precedent to exercise
of the option), and the other terms and conditions of the option.

     ISOs are subject to special terms and conditions. The aggregate fair
market value, on the date of the grant, of the Common Stock for which an
ISO is exercisable for the first time by the optionee during any calendar
year, may not exceed $100,000. An ISO may not be granted to an employee who
possesses more than 10% of the total voting power of the Company's stock
unless the option price is at least 110% of the fair market value of the
Common Stock subject to the option on the date it is granted and the option
is not exercisable five years after the date of grant. No ISO may be
exercisable after ten years from the date of grant. The option price may
not be less than 100% of the fair market value of the Common Stock covered
by the option at the date of grant.

     In general, no vested option may be exercised unless at the time of
such exercise the optionee is employed by or in the service of the Company
or any subsidiary thereof, within 12 months following termination of
employment by reason of death or disability, or within three months
following termination for any other reason except for cause. Options are
nonassignable and nontransferable by the optionee except by will or by the
laws of descent and distribution at the time of the optionee's death. No
shares may be issued pursuant to the exercise of an option until full
payment therefor has been made. Upon the exercise of an option, the number
of shares reserved for issuance under the Plan will be

                                     47
<PAGE>
reduced by the number of shares issued upon exercise of the option. As of
September 30, 1996, no options to purchase shares of Common Stock have been
granted under the Plan.

     Stock Appreciation Rights. The Option Committee may grant SARs under
the Plan. Each SAR entitles the holder, upon exercise, to receive from the
Company an amount equal to the excess of the fair market value on the date
of exercise of one share of Common Stock of the Company over its fair
market value on the date of grant (or, in the case of a SAR granted in
connection with an option, the excess of the fair market value of one share
of Common Stock of the Company over the option price per share under the
option to which the SAR relates), multiplied by the number of shares
covered by the SAR or the option. Payment by the Company upon exercise of a
SAR may be made in Common Stock, in cash, or by a combination of Common
Stock and cash.

     If a SAR is granted in connection with an option, the following rules
shall apply: (i) the SAR shall be exercisable only to the extent and on the
same conditions that the related option could be exercised; (ii) the SAR
shall be exercisable only when the fair market value of the stock exceeds
the option price of the related option; (iii) the SAR shall be for no more
than 100% of the excess of the fair market value of the stock at the time
of exercise over the option price; (iv) upon exercise of the SAR, the
option or portion thereof to which the SAR relates terminates; and (v) upon
exercise of the option, the related SAR or portion thereof terminates.

     Each SAR is nonassignable and nontransferable by the holder except by
will or by the laws of descent and distribution at the time of the holder's
death. Upon the exercise of a SAR for shares, the number of shares reserved
for issuance under the Plan will be reduced by the number of shares issued.
Cash payments of SARs will not reduce the number of shares of Common Stock
reserved for issuance under the Plan. No SARs have been granted under the
Plan.

     Restricted Stock. The Option Committee may issue shares of Common
Stock under the Plan subject to the terms, conditions, and restrictions
determined thereby. Upon the issuance of restricted stock, the number of
shares reserved for issuance under the Plan shall be reduced by the number
of shares issued. No restricted shares have been granted under the Plan.

     Stock Bonus Awards. The Option Committee may award shares of Common
Stock as a stock bonus under the Plan. The Option Committee may determine
the recipients of the awards, the number of shares to be awarded, and the
time of the award. Stock received as a stock bonus is subject to the terms,
conditions, and restrictions determined by the Option Committee at the time
the stock is awarded. No stock bonus awards have been granted under the
Plan.

     Cash Bonus Rights. The Option Committee may grant cash bonus rights
under the Plan in connection with (i) options granted or previously
granted, (ii) SARs granted or previously granted, (iii) stock bonuses
awarded or previously awarded, and (iv) shares issued under the Plan. Bonus
rights granted in connection with options entitle the optionee to a cash
bonus if and when the related option is exercised. The amount of the bonus
is

                                     48
<PAGE>
determined by multiplying the excess of the total fair market value of the
shares acquired upon the exercise over the total option price for the
shares by the applicable bonus percentage. The bonus rights granted in
connection with a SAR entitle the holder to a cash bonus when the SAR is
exercised. The amount of the bonus is determined by multiplying the total
fair market value of the shares or cash received pursuant to the exercise
of the SAR by the applicable percentage. The bonus percentage applicable to
any bonus right is determined by the Option Committee but may in no event
exceed 75%. Bonus rights granted in connection with stock bonuses entitle
the recipient to a cash bonus, in an amount determined by the Option
Committee, when the stock is awarded or purchased or any restrictions to
which the stock is subject lapse. No bonus rights have been granted under
the Plan.

     Performance Units. The Option Committee may grant performance units
consisting of monetary units which may be earned if the Company achieves
certain goals established by the Committee over a designated period of
time. The goals established by the Option Committee may include earnings
per share, return on shareholders' equity, return on invested capital, and
similar benchmarks. Payment of an award earned may be in cash or in Common
Stock or partly in both, and may be made when earned, or vested and
deferred, as the Option Committee determines. Each performance unit will be
nonassignable and nontransferable by the holder except by will or by the
laws of descent and distribution at the time of the holder's death. The
number of shares reserved for issuance under the Plan shall be reduced by
the number of shares issued upon payment of an award. No performance units
have been granted under the Plan.

     Changes in Capital Structure. The Plan provides that if the
outstanding Common Stock of the Company is increased or decreased or
changed into or exchanged for a different number or kind of shares or other
securities of the Company or of another corporation by reason of any
recapitalization, stock split or certain other transactions, appropriate
adjustment will be made by the Option Committee in the number and kind of
shares available for grants under the Plan. In addition, the Option
Committee will make appropriate adjustments in the number and kind of
shares as to which outstanding options will be exercisable. In the event of
a merger, consolidation or other fundamental corporate transformation, the
Board may, in its sole discretion, permit outstanding options to remain in
effect in accordance with their terms; to be converted into options to
purchase stock in the surviving or acquiring corporation in the
transaction; or to be exercised, to the extent then exercisable, during a
30-day period prior to the consummation of the transaction.

CERTAIN TAX CONSIDERATIONS RELATED TO EXECUTIVE COMPENSATION

     As a result of Section 162(m) of the Internal Revenue Code of 1986, as
amended, in the event that compensation paid by the Company to a "covered
employee" (the chief executive officer and the next four highest paid
employees) in a year were to exceed an aggregate of $1,000,000, the
Company's deduction for such compensation could be limited to $1,000,000.

                                     49
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table shows, to the best of the Company's knowledge
based on the records of the Company's transfer agent and the Company's
records on issuances of shares, as adjusted to reflect changes in ownership
documented in filings with the Securities and Exchange Commission made by
certain shareholders and provided to the Company pursuant to Section 16 of
the Exchange Act, and statements provided to the Company by certain
shareholders, Common Stock ownership as of October 11, 1996, by (i) each
person known by the Company to own beneficially more than 5% of the
Company's outstanding Common Stock ("Principal Shareholder"), (ii) each of
the Company's directors, (iii) Charles D. DeJong and Don C. Morrison, each
of whom served as the Company's Chief Executive Officer during the last
completed fiscal year, and (iv) all executive officers and directors of the
Company as a group.

<TABLE>
<CAPTION>
   NAME/ADDRESS OF               NUMBER OF SHARES                  PERCENTAGE OF
   BENEFICIAL OWNER             BENEFICIALLY OWNED(1)           SHARES OUTSTANDING(2)
   ----------------             ---------------------           ---------------------
<S>                                  <C>                               <C>  
Donald A. Wright
150 Manhattan Square                 2,575,000                         17.6%
East Wenatchee, WA

Charles D. DeJong
1934 Maiden Lane                     2,134,375                         14.6%
Wenatchee, WA

Mark D. Hamilton
933 College Street                   2,134,375                         14.6%
Wenatchee, WA

Philadep & Co.
1900 Market Street                   1,335,807                         9.1%
Philadelphia, PA

Nick A. Gerde (3)
1906 Rocklund Drive                  1,125,000                         7.7%
Wenatchee, WA

Jensen Services, Inc.
1787 E. Fort 106 Union #106           997,120                          6.8%
Salt Lake City, UT 84121

Robert A. Schwiesow
200 Airport Way                       950,000                          6.5%
East Wenatchee, WA

Allen Dahl
7300 Madrona Drive N.E.               718,325                          4.9%
Bainbridge Island, WA

Donald B. Cotton
538 Timber Ridge Drive                375,000                          2.6%
Trophy Club, TX
</TABLE>

                                     50
<PAGE>
<TABLE>
<CAPTION>
   NAME/ADDRESS OF               NUMBER OF SHARES                  PERCENTAGE OF
   BENEFICIAL OWNER             BENEFICIALLY OWNED(1)           SHARES OUTSTANDING(2)
   ----------------             ---------------------           ---------------------
<S>                                  <C>                               <C>  
Roger P. Vallo
12821 127th Avenue, SE               375,000                            2.6%
Snohomish, WA

Don C. Morrison
9352 Sterling Drive                       --                            N/A
Sandy, UT

Officers and Directors
as a group (6 persons)            11,384,195                           77.8%
<FN>
(1)  Beneficial ownership is determined in accordance with the rules of the
     Securities and Exchange Commission. To the Company's knowledge, each
     person or entity has sole voting and sole investment power with
     respect to the shares beneficially owned except as noted in Footnote
     (3) below, subject to community property laws, where applicable.

(2)  Rounded to the nearest 1/10th of one percent, based on 14,640,745
     shares of Common Stock outstanding on October 11, 1996.

(3)  Includes 900,000 shares owned in joint tenancy with Mr. Gerde's
     spouse, and an aggregate of 225,000 shares owned by Mr. Gerde's
     children residing therewith.
</FN>
</TABLE>

                                     51
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     On October 2, 1996, the Company loaned its President $12,000. The
unsecured loan bears interest at 10% per annum, payable in 26 equal
semi-monthly installments of $515, commencing October 15, 1996, until paid
in full. The payments will be withheld from the President's semi-monthly
payroll checks. There is no prepayment penalty.

     On September 25, 1996, the Chairman and the President provided
personal guaranties of the Company's obligations under a $500,000 bridge
loan. The loan bears interest at 18 % per annum and is secured by all
assets, tangible and intangible, including trade secrets, either now owned
or hereafter acquired, of the Company. The entire principal balance,
together with all outstanding accrued interest is due and payable on or
before the earlier of: 1) January 1, 1997 or 2) the closing of an offering
of common stock and/or warrants in an amount greater than $2,000,000.
However, the Company may, at its option, extend the due date up to April 1,
1997, if the Company is not in default under any of the terms or conditions
of the agreement, and the Company pays a third party, designated by the
lender, an extension fee of 1%, 1.5%, and 2% of the then outstanding
balance, respectively, on or before January 1, 1997, February 1, 1997,
March 1, 1997, along with the interest payment of $7,500.

                                     52
<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

     (A) EXHIBITS


EXHIBIT
 NUMBER     Description
 ------     -----------

   3.1    Articles of Incorporation of Jungle Street, Inc., as filed with
          the Secretary of State of the State of Utah on July 10, 1980.
   3.2    Articles of Amendment to the Articles of Incorporation of Jungle
          Street, Inc., filed with the Secretary of State of the State of
          Utah on July 20, 1995.
   3.3    Bylaws of Jungle Street, Inc.
   4.1    Subscription Agreement, dated May 10, 1996, between Televar
          Northwest, Inc. and Gary Arsenault.
   4.2    Registration Rights Agreement, dated September 25, 1996, between
          Jungle Street, Inc. and UTCO Associates, Ltd.
   4.3    Common Stock Purchase Warrant, dated September 25, 1996, issued
          to UTCO Associates, Ltd. by Jungle Street, Inc.
   4.4    Agreement and Plan of Merger, dated August 29, 1996, among Jungle
          Street, Inc., Televar Northwest, Inc., and Jungle Street, Inc., a
          Washington corporation.(1)
   4.5    Convertible Promissory Note from Televar Northwest, Inc., to Barb
          Jorgensen, dated April 25, 1996.
   10.1   Promissory Note from Jungle Street, Inc. to UTCO Associates,
          Ltd., dated September 25, 1996.
   10.2   Security Agreement, dated September 25, 1996, between Jungle
          Street, Inc., Televar Northwest, Inc., and UTCO Associates, Ltd.
   10.3   Guarantee of Loan, dated September 24, 1996, by Televar
          Northwest, Inc., Charles D. DeJong, and Mark D. Hamilton in favor
          of UTCO Associates, Ltd.
   10.4   1996 Stock Incentive Plan
   10.5   Customer Provided Access Request and Authorization, dated June 3,
          1996, between Televar Northwest, Inc., and Sprint Communications
          Company L.P.
   10.6   Dedicated Access Charges and Special Access Surcharge Application
          for Exemption, dated June 3, 1996, between Televar Northwest,
          Inc., and Sprint Communications Company, L.P.
   10.7   Lease Agreement and Guarantee, dated August 6, 1996, between
          Televar Northwest, Inc., and Financial Pacific Co.
   10.8   Lease Agreement, dated July 26, 1993, between Televar Northwest,
          Inc., and E. Gus Noyd and Laura Jean Noyd.
   10.9   Lease Agreement, dated June 28, 1995, between Televar Northwest,
          Inc., and Cascade Leasing Company, and Equipment Lease Guaranty
          made by Charles D. DeJong, Michael P. Schuyleman, and Mark D.
          Hamilton in favor of Cascade Leasing Company.
   10.10  Sublease Agreement, dated April 1, 1995, between Televar
          Northwest, Inc., and Telewaves, Inc.
   10.11  Lease Agreement, dated March 7, 1995, between Televar Northwest,
          Inc., and David A. Quick and Cirri A. Quick, d/b/a DCR
          Properties.
<PAGE>
   10.12  Lease Agreement, effective July 15, 1996, between Televar
          Northwest, Inc., and Summit Leasing, Inc.
   10.13  Promissory Note from Televar Northwest, Inc., to Michael P.
          Schuyleman and Janet L. Schuyleman, dated November 1, 1995.
   10.14  Escrow Account Instructions and Agreement, dated October 31,
          1995, between David M. Bohr, Michael P. Schuyleman and Janet L.
          Schuyleman, and Televar Northwest, Inc.
   10.15  Form of Televar Exclusive Sales Agency (VAR) Agreement
   10.16  Independent Distributor Agreement, dated November 16, 1994
          between Association Communications, Inc. and Televar Northwest,
          Inc.
   10.17  Promissory Note from Televar Northwest, Inc., to Robert Smith,
          dated September 1, 1996.
   21     List of Subsidiaries
   23     Consent of Mantyla, McReynolds and Associates
   27     Financial Data Schedule

-----------

(1)  Incorporated by reference to the Company's Current Report on Form 8-K
     filed on September 13, 1996.

     (B) REPORTS ON FORM 8-K.

     On September 13, 1996, the Company filed a current report on Form 8-K
to disclose the merger of Televar with a wholly-owned subsidiary of the
Company that occurred on August 29, 1996 (Item 1). As a result of that
merger, the Company acquired a significant amount of assets other than in
the ordinary course of business (Item 2). On November 12, 1996, the Company
filed an amendment to the Form 8-K to provide the audited financial
statements of Televar required by Items 7(a) and 7(b) of Form 8-K and to
disclose the fact that the Company has elected to adopt the fiscal year of
Televar, which is June 30, as the fiscal year of the Company (Item 8).
<PAGE>
                                 SIGNATURES

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

                                       JUNGLE STREET, INC.


Date: November 15, 1996                By /s/ MARK D. HAMILTON
                                          --------------------------------
                                          MARK D. HAMILTON
                                          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 following
capacities on November 15, 1996.


Signature                         Title
---------                         -----


/s/ CHARLES D. DEJONG             Chief Executive Officer, and Chairman of the
-----------------------------     Board (Principal Executive Officer)
    CHARLES D. DEJONG        


/s/ MARK D. HAMILTON              President (Principal Financial and Accounting
-----------------------------     Officer)
    MARK D. HAMILTON         


/s/ NICK A. GERDE                 Director
-----------------------------
    NICK A. GERDE


                                  Director
-----------------------------
     ROGER P. VALLO


                                  Director
-----------------------------
     DONALD B. COTTON
<PAGE>
                               EXHIBIT INDEX

The following documents are filed herewith or have been included as
exhibits to previous filings with the Securities and Exchange Commission
and are incorporated by reference as indicated below.


EXHIBIT
 NUMBER     Description
 ------     -----------

   3.1    Articles of Incorporation of Jungle Street, Inc., as filed with
          the Secretary of State of the State of Utah on July 10, 1980.
   3.2    Articles of Amendment to the Articles of Incorporation of Jungle
          Street, Inc., filed with the Secretary of State of the State of
          Utah on July 20, 1995.
   3.3    Bylaws of Jungle Street, Inc.
   4.1    Subscription Agreement, dated May 10, 1996, between Televar
          Northwest, Inc. and Gary Arsenault.
   4.2    Registration Rights Agreement, dated September 25, 1996, between
          Jungle Street, Inc. and UTCO Associates, Ltd.
   4.3    Common Stock Purchase Warrant, dated September 25, 1996, issued
          to UTCO Associates, Ltd. by Jungle Street, Inc.
   4.4    Agreement and Plan of Merger, dated August 29, 1996, among Jungle
          Street, Inc., Televar Northwest, Inc., and Jungle Street, Inc., a
          Washington corporation.(1)
   4.5    Convertible Promissory Note from Televar Northwest, Inc., to Barb
          Jorgensen, dated April 25, 1996.
   10.1   Promissory Note from Jungle Street, Inc. to UTCO Associates,
          Ltd., dated September 25, 1996.
   10.2   Security Agreement, dated September 25, 1996, between Jungle
          Street, Inc., Televar Northwest, Inc., and UTCO Associates, Ltd.
   10.3   Guarantee of Loan, dated September 24, 1996, by Televar
          Northwest, Inc., Charles D. DeJong, and Mark D. Hamilton in favor
          of UTCO Associates, Ltd.
   10.4   1996 Stock Incentive Plan
   10.5   Customer Provided Access Request and Authorization, dated June 3,
          1996, between Televar Northwest, Inc., and Sprint Communications
          Company L.P.
   10.6   Dedicated Access Charges and Special Access Surcharge Application
          for Exemption, dated June 3, 1996, between Televar Northwest,
          Inc., and Sprint Communications Company, L.P.
   10.7   Lease Agreement and Guarantee, dated August 6, 1996, between
          Televar Northwest, Inc., and Financial Pacific Co.
   10.8   Lease Agreement, dated July 26, 1993, between Televar Northwest,
          Inc., and E. Gus Noyd and Laura Jean Noyd.
   10.9   Lease Agreement, dated June 28, 1995, between Televar Northwest,
          Inc., and Cascade Leasing Company, and Equipment Lease Guaranty
          made by Charles D. DeJong, Michael P. Schuyleman, and Mark D.
          Hamilton in favor of Cascade Leasing Company.
   10.10  Sublease Agreement, dated April 1, 1995, between Televar
          Northwest, Inc., and Telewaves, Inc.
   10.11  Lease Agreement, dated March 7, 1995, between Televar Northwest,
          Inc., and David A. Quick and Cirri A. Quick, d/b/a DCR
          Properties.
<PAGE>
   10.12  Lease Agreement, effective July 15, 1996, between Televar
          Northwest, Inc., and Summit Leasing, Inc.
   10.13  Promissory Note from Televar Northwest, Inc., to Michael P.
          Schuyleman and Janet L. Schuyleman, dated November 1, 1995.
   10.14  Escrow Account Instructions and Agreement, dated October 31,
          1995, between David M. Bohr, Michael P. Schuyleman and Janet L.
          Schuyleman, and Televar Northwest, Inc.
   10.15  Form of Televar Exclusive Sales Agency (VAR) Agreement
   10.16  Independent Distributor Agreement, dated November 16, 1994
          between Association Communications, Inc. and Televar Northwest,
          Inc.
   10.17  Promissory Note from Televar Northwest, Inc., to Robert Smith,
          dated September 1, 1996.
   21     List of Subsidiaries
   23     Consent of Mantyla, McReynolds and Associates
   27     Financial Data Schedule

-----------

(1)  Incorporated by reference to the Company's Current Report on Form 8-K
     filed on September 13, 1996.