SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10K

[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934
         For the fiscal year ended December 31, 1996
                                       OR

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

         Commission File No. 33-55254-14

                           PACIFIC FOREST CORPORATION
                        (Formerly Zeus Enterprises, Inc.)
             (Exact name of Registrant as specified in its charter)

       NEVADA                                   87-0438451
(State or other jurisdiction of              (I.R.S. Employer
incorporation or organization)            Identification Number)

73 SOUTH PALM AVENUE, SUITE 223
SARASOTA, FLORIDA                                         34236
(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code (941) 957-1009

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

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

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained,  to the best of registrant's knowledge, in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]

As of April,  1997,  the  aggregate  market  value of the  voting  stock held by
non-affiliates of the registrant is approximately $37,500.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

              Class                          Outstanding as of April, 1997
$.001 PAR VALUE CLASS A COMMON STOCK                1,100,000 SHARES

                      DOCUMENTS INCORPORATED BY REFERENCE :
                                      None


<PAGE>



                                     PART I

ITEM 1.  Business.

         The Company was  incorporated  under the laws of Utah on April 16, 1986
as Zeus Enterprises,  Inc. and subsequently reorganized under the laws of Nevada
on December 30, 1993. The Company's  reorganization  plan was formulated for the
purpose of changing the state of domicile  and provided  that the Company form a
new  corporation  in Nevada which acquired all of the  contractual  obligations,
shareholder  rights  and  identity  of the Utah  corporation,  and then the Utah
corporation was dissolved.  The Company is in the  developmental  stage, and its
operations had been limited to the sale of shares to Capital General Corporation
and the gifts of shares to the  giftees.  The Company has been in the process of
investigating  potential  business ventures which, in the opinion of management,
would  provide a source of eventual  profit to the Company.  On May 31, 1996 the
name was changed to Pacific Forest Corporation.

         On September 12, 1995, the Company, in consideration of the issuance of
100,000  authorized but unissued  shares,  acquired $50,000 from Capital General
Corporation for $.50 per share. The price of the shares was arbitrarily  decided
upon by both  parties.  After  the  completion  of the stock  purchase,  Capital
General became the holder of  approximately  30.6% of the issued and outstanding
shares of the Company.  Krista Castleton Nielson,  former President and Director
of the  Company,  and David R.  Yeaman,  former  Secretary  and  Director of the
Company are both officers and directors of Capital General.

During June of 1996,  the Company  acquired a subsidiary in Fiji and intended to
operate in the timber processing industry.  However, the necessary capital could
not be raised and the  transactions  with the Fijian  subsidiary  were reversed,
effective December 31, 1996.

         The Company will continue to try to expand through future  acquisitions
and will be  extremely  limited in its  attempts  to locate  potential  business
situations for investigation.  The Company plans to continue on a limited basis,
the process of  investigating  possible merger and acquisition  candidates,  and
believes that the Company's  status as a publicly-held  corporation will enhance
its ability to locate such potential business ventures.

         Management  anticipates  that due to its lack of funds, and the limited
amount of its resources,  the Company may be restricted to participation in only
one  potential  business  venture.  This  lack  of  diversification   should  be
considered a  substantial  risk because it will not permit the Company to offset
potential losses from one venture against gains from another.

         The analysis of business  opportunities  will be undertaken by or under
the  supervision  of the Company's  management,  none of whom is a  professional
analyst and none of whom have significant general business experience. Among the
factors  which  management  will  consider  in  analyzing   potential   business
opportunities are the available technical,  financial and managerial  resources;
working capital and financial  requirements;  the history of operation,  if any;
future prospects; the nature of present and anticipated  competition;  potential
for  further  research,   development  or  exploration;   growth  and  expansion
potential;  profit potential;  the perceived public recognition or acceptance of
products or services; name identification, and other relevant factors.

         It is not  possible at present to predict the exact manner in which the
Company may  participate in future  business  opportunities.  Specific  business
opportunities  will be reviewed  and,  based upon such review,  the  appropriate
legal structure or method of  participation  will be decided upon by management.
Such structures and methods may include,  without limitation,  leases,  purchase
and  sale  agreements,   license,   joint  ventures;  and  may  involve  merger,
consolidation  or  reorganization.  The Company may act  directly or  indirectly
through an interest in a partnership, corporation or other form of organization.
However,  it is most likely that the Company will acquire a business  venture by
involving  the  issuance  of  the  Company's  restricted   securities.   Such  a
reorganization may involve a merger (or combination  pursuant to state corporate
statutes,  where one of the entities  dissolves or is absorbed by the other), or
it may occur as a  consolidation,  where a new entity is formed and the  Company
and such other entity combine  assets in the new entity.  A  reorganization  may
also  occur,  directly  or  indirectly,  through  subsidiaries,  and there is no
assurance   that  the  Company   would  be  the  surviving   entity.   Any  such
reorganization could result in

                                        2

<PAGE>



additional  dilution  to the book  value of the  shares and loss of control of a
majority of the  shares.  The  Company's  present  directors  may be required to
resign in connection with a reorganization.

         A  reorganization  may be structured in such a way as to take advantage
of certain beneficial tax consequences available in business reorganizations, in
accordance  with  provisions of the Internal  Revenue Code of 1986 (as amended).
Pursuant  to  such  a  structure,  the  number  of  shares  held  prior  to  the
reorganization  by all of the Company's  shareholders  might be less than 20% of
the  total  shares  to be  outstanding  upon  completion  of the  trans  action.
Substantial  dilution of percentage  equity ownership may result to the giftees,
in the discretion of management.

         Generally,  the issuance of securities in a reorganization  transaction
would  be  undertaken  in  reliance  upon  one  or  more   exemptions  from  the
registration  provisions of applicable  federal  securities laws,  including the
exemptions  provided  for  non-public  or limited  offerings,  distributions  to
persons resident in only one state and similar exemptions provided by state law.
Shares issued in a reorganization  transaction based upon these exemptions would
be  considered  "restricted"  securities  under the 1933  Act,  and would not be
available  for  resale for a period of two years,  in  accordance  with Rule 144
promulgated  under  the 1933 Act.  However,  the  Company  might  undertake,  in
connection  with  such  a  reorganization   transaction,   certain  registration
obligations in connection with such securities.

         The  Company  may  choose  to  enter  into  a  venture   involving  the
acquisition  of or  merger  with a  company  which  does  not  need  substantial
additional  capital but desires to establish a public  trading  market for their
securities.  Such a company may desire to consolidate  its  operations  with the
Company  through  a  merger,   reorganization,   asset  acquisition,   or  other
combination,  in order to avoid possible adverse consequences of undertaking its
own public offering.  (Such consequences might include expense,  time delays, or
loss of  voting  control.)  In the event of such a merger,  the  Company  may be
required to issue significant  additional shares, and it may be anticipated that
control over the Company's  affairs may be transferred to others. It should also
be noted that this type of business  venture  might have the effect of depriving
the  giftees of the  protection  of federal  and state  securities  laws,  which
normally affect the process of a company's becoming publicly held.

         It  is  likely  that  the   investigation  and  selection  of  business
opportunities  will be complex,  time-consuming  and extremely  risky.  However,
management believes that even though the Company will have limited capital,  the
fact that  their  securities  will be  publicly-held  will make it a  reasonably
attractive business prospect for other firms.

         As  part of  their  investigation  of  acquisition  possibilities,  the
Company's  management may meet with  executive  officers of the business and its
personnel;  inspect its facilities;  obtain independent analysis or verification
of the  information  provided,  and conduct other  reasonable  measures,  to the
extent permitted by the Company's  limited  resources and  management's  limited
expertise.  Generally,  the Company  intends to analyze and make a determination
based upon all available  information without reliance upon any single factor as
controlling.

<PAGE>
         In all likelihood,  the Company's  management will be  inexperienced in
the areas in which potential  businesses  will be investigated  and in which the
Company may make an acquisition or investment. Thus, it may become necessary for
the  Company  to retain  consultants  or  outside  professional  firms to assist
management in evaluating potential  investments,  and to hire managers to run or
oversee the operations of its acquisitions or investments.  The Company can give
no assurance that it will be able to find suitable consultants or managers.  The
Company  intends not to employ any of its  affiliates,  officers,  directors  or
principal  shareholders as consultants.  The Company has no policy regarding the
use of consultants,  however, if management, in its discretion,  determines that
it is in the best interests of the Company,  management may seek  consultants to
review  potential merger or acquisition  candidates.  It is anticipated that the
total  amount  of fees  paid to any  consultant  would  not  exceed  $5,000  per
transaction. The fee, it is anticipated,  would be paid by the Company or by the
potential target company. There are currently no contracts or agreements between
any  consultant and any companies that are searching for companies with which to
merge.

         It may be  anticipated  that the  investigation  of  specific  business
opportunities   and  the   negotiation,   drafting  and  execution  of  relevant
agreements,  disclosure documents and other instruments will require substantial
management time and attention, and substantial costs for accountants,  attorneys
and others. Should a decision thereafter be made

                                        3

<PAGE>



not to participate in a specific business  opportunity,  it is likely that costs
already  expended would not be  recoverable.  It is also likely,  in the event a
transaction should eventually fail to be consummated,  for any reason,  that the
costs incurred by the Company would not be recoverable.  The Company's  officers
and directors are entitled to reimbursement  for all expenses  incurred in their
investigation  of possible  business  ventures on behalf of the Company,  and no
assurance can be given that if the Company has available  funds they will not be
depleted in such expenses.

         In addition to the severe limitations placed upon the Company by virtue
of its  limited  funded  status,  the  Company  will  also  be  limited,  in its
investigation  of possible  acquisitions,  by the reporting  requirements of the
Securities  Exchange Act of 1934,  pursuant to which certain information must be
furnished in connection with any significant acquisitions.  The Company would be
required to furnish,  with  respect to any  significant  acquisition,  certified
financial statements for the acquired company,  covering one, two or three years
(depending upon the relative size of the acquisition). Consequently, acquisition
prospects which do not have the requisite certified financial statements, or are
unable to obtain them, may be  inappropriate  for acquisition  under the present
reporting requirements of the 1934 Act.

         The Company does not intend to take any action which would render it an
investment company under The Investment  Companies Act of 1940 (the "1940 Act").
The 1940 Act defines an investment  company as one which (1) invests,  reinvests
or  trades  in  securities  as its  primary  business,  (2)  issues  face-amount
certificates of the installment type or (3) invests,  reinvests,  owns, holds or
trades  securities  or owns or  acquires  investment  securities  having a value
exceeding 40 percent of the value of its total assets  (exclusive  of Government
securities  and cash  items) on an  unconsolidated  basis.  The above 40 percent
limitation may be exceeded so long as a company is primarily  engaged,  directly
or through  wholly-owned  subsidiaries,  in a business or businesses  other than
that of investing,  reinvesting,  owning,  holding or trading in  securities.  A
wholly-owned  subsidiary  is  defined  as one which is at least 95% owned by the
company.

         Neither the Company nor any of its officers or directors are registered
as investment  advisers under the Investment Advisers Act of 1940 (the "Advisers
Act"),  and so there is no  authority  to  pursue  any  course  of  business  or
activities  which  would  render  the  Company  or  its  management  "investment
advisers" as defined in the Advisers Act.  Management believes that registration
under  the  Advisers  Act  is not  required  and  that  certain  exemptions  are
available,  including  the  exemptions  for persons  who may render  advice to a
limited number of other persons and who may advise other persons  located in one
state only.

         The Company expects to encounter intense  competition in its efforts to
locate  suitable  business   opportunities  in  which  to  engage.  The  primary
competition  for  desirable  investments  may come from  other  small  companies
organized  and funded for  similar  purposes,  from small  business  development
corporations and from public and private venture capital  organizations.  As the
Company has limited funds and other resources, it can fairly be said that nearly
all of the  competing  entities  will  have  significantly  greater  experience,
resources,  facilities,  contacts and managerial  expertise than the Company and
will,  consequently,  be in a better  position than the Company to obtain access
to, and to engage in,  business  opportunities.  Due to its limited  funds,  the
Company  may not be in a position to compete  with  larger and more  experienced
entities for business  opportunities which are low-risk.  Business opportunities
in which the Company may  ultimately  participate  are likely to be highly risky
and extremely speculative.

ITEM 2.  Properties.

         The Company owns no properties and utilizes space on a rent-free  basis
in the office of its President.  This  arrangement is expected to continue until
such  time  as  the  Company  becomes  involved  in  a  business  venture  which
necessitates its relocation, as to which no assurances can be given. The Company
has no  agreements  with respect to the  maintenance  or future  acquisition  of
office facilities, however, if a successful merger/acquisition is negotiated, it
is  anticipated  that the  office  of the  Company  will be moved to that of the
acquired company.



                                        4

<PAGE>



ITEM 3.  Legal Proceedings.

         On January 7, 1994, the Bureau of Securities of the State of New Jersey
filed a complaint in the matter of Capital General Corporation,  David R. Yeaman
and 74 other  named  defendants,  Nevada  and Utah  corporations  including  the
Company,  which  complaint  proposes  that  civil  monetary  penalties  totaling
$30,000.00  be  assessed   against  Capital  General   Corporation  for  alleged
violations of the Uniform  Securities Law (1967),  N.J.S.A.  49:3-47 et. seq. by
(1)  selling  to 24 New  Jersey  residents  between  April  1986  and May  1991,
securities in 25 of the 74 above  referred to respondent  corporations  named in
the proceeding,  including the Company, which were neither registered nor exempt
from  registration,  and (2)  making  untrue  statements  of  material  fact and
omitting to state material  facts in connection  with said New Jersey sales in 6
of the 74 above  referred  to  resident  corporations  named in the  proceeding,
including the Company.  Also on January 7, 1994, the Bureau of Securities of the
State of New Jersey, based on substantially  similar allegations as in the above
referred complaint, issued its Order Denying Exemptions and to Cease and Desist.
This order  summarily  denied the exemptions  contained in N.J.S.A.  49:3-50(b),
(1),  (2),  (3),  (9),  (11)  and  (12) of the  securities  of  Capital  General
Corporation  and the other 74  respondent  corporations,  including the Company,
except that  excluded  from the summary  denial of the  exemption  contained  in
N.J.S.A.  49-3-  50(b)(12)  is  the  Offer  of  Rescission  by  Capital  General
Corporation to 24 New Jersey residents pursuant to the offer of rescission which
began about April 28, 1993. This order also ordered Capital General  Corporation
and David Yeaman to Cease and Desist from offering or selling any  securities in
blind pool corporations into, or from the State of New Jersey.

         Capital  General and David  Yeaman filed  answers  denying the material
allegations  of said  complaint  and  resisting  the  imposition  of said  civil
monetary  penalties,  and the said  Order  Denying  Exemptions  and to Cease and
Desist.  Subsequently the issues raised in said complaint and order were settled
by agreement  between the said Bureau of  Securities  and Mr. Yeaman and Capital
General  Corporation  in a consent  order dated July 11, 1994 and approved by an
administrative law judge of the State of New Jersey Office of Administrative Law
September  2, 1994.  Under the terms of said  consent  order,  all claims in the
complaint  against all named  respondents  were settled by the payment of $3,000
civil penalty,  and the order was modified so that it does not to apply to 27 of
the respondent companies; however said order does still apply to the Company.

         During 1986 and 1987,  Capital General gifted very small percentages of
stock  (usually 100 shares to each  giftee) in the  following  companies,  which
includes the Company, to approximately 1,000 persons or entities: Amenity, Inc.,
Dogmatic,  Inc., Mystic Industries,  Inc.,  Highland Mfg., Inc.,  Kowtow,  Inc.,
Noble  Industries,  Inc.,  Oryan Capital  Corporation,  Pegasus Star Enterprise,
Inc., Showstoppers,  Inc., Hightide, Inc., Grandeur, Inc., Fantastic Industries,
Inc.,  Jugglar,  Inc.,  Xebec Galleon,  Inc.,  Golden Home Health Care Equipment
Centers,  Inc., Nighthawk Capital,  Inc.,  Instrument  Development  Corporation,
Panther Industries,  Inc., Owl Enterprises,  Inc., Quail, Inc., GBS Technologies
Corporation, H & B Carriers, Inc., Florida Growth Industries, Inc., Macaw, Inc.,
Longhorn Enterprise, Inc., Koala Corporation,  Yahwe Corporation,  Star Dolphin,
Inc., Jackal, Inc., Hyena Capital,  Inc., Gopher, Inc., Flamingo Capital,  Inc.,
Egret,  Inc.,  Cetacean  Industries,  Inc.,  Bonito,  Inc.,  Alpaca,  Inc., Zeus
Enterprise,   Inc.,   Tamarind,   Inc.,  Saber,  Inc.,  Radar,  Inc.,  Quiescent
Corporation,  Vanadium,  Inc., Upsilon,  Inc., Why Not?, Inc.,  Bestmark,  Inc.,
Missouri Illinois Mining Co., Inc.

     Capital  General did not  register  the gifts of shares in these  companies
with  the  Securities  Division  of the  State  of Utah or with  the  Securities
Exchange  Commission  because it believed these gifts to be outside the scope of
the Utah Uniform  Securities  Act and the  Securities  Act of 1933 in as much as
such acts  require  registration  for sales and do not require  registration  of
gifts.  Nevertheless,  in  connection  with the  distribution  of  shares of its
subsidiaries,  Capital General was found by the Utah Securities  Advisory Board,
in two  decisions  affirmed  by the Utah  State  Courts,  to have  violated  the
registration  provisions of the Utah Uniform  Securities  Act. See In re Amenity
Inc.,  No.  SD-86-11  (Utah Sec. Adv. Bd.  February 18, 1987) aff'd C87-2625 (3d
Dist. Ct.  September 18, 1987) aff'd sub nom Capital General Corp. v. Utah Dep't
of Business Reg., 777 P.2d 494, 498 (Utah Ct. App.) cert.  denied,  781 P.2d 873
(Utah S. Ct. 1989);  In re H&B Carriers  Inc., No.  87-09-28-01  (Utah Sec. Adv.
Bd., Apr. 15, 1988) aff'd No.  88-5900053 (3d Dist. Ct. Sept 10, 1990) aff'd sub
nom Capital  General Corp. v. Utah Dep't of Business Reg.,  Case No 91-196 (Utah
Ct. App.  February 10, 1992.  All of the remaining  companies  listed above were
parties to the H&B Carriers order.


                                        5

<PAGE>



         Both of these actions  sought  suspension of  transactional  exemptions
respecting the shares of these companies  pursuant to Section 14 (3) of the Utah
Uniform  Securities Act.  Capital  General  defended both actions on the grounds
that the Utah Uniform Securities Act did not apply to gifts of securities,  that
the gifts were good faith gifts  specifically  exempted by the Act,  and that in
any event even if it had "sold"  shares in violation of the Act,  suspension  of
transactional  exemptions was not an authorized remedy under the statute.  These
defenses were  rejected at the  administrative  agency level,  and upon judicial
review at the District Court level and by the Utah Court of Appeals.

         See also Item 10 regarding  legal  proceedings  against former officers
and directors.

ITEM 4.  Submission of Matters to a Vote of Security Holders.

         No matter was  submitted to the Company's  security  holders for a vote
during the fiscal year ending December 31, 1996.

                                     PART II

ITEM 5.  Market for Registrant's Common Equity and Related Stockholders Matters.

         The  Company's  common  stock is traded  over the  counter  on the NASD
Bulletin Board.  There was no market value for the Company's  common stock until
the fourth  quarter of 1995, at which time the low bid and the high bid was $.50
per share.  During 1996,  the stock's price ranged from a low of $.375 to a high
of $6.375. The reported bids for the Company's common stock reflect inter-dealer
prices, without retail mark-up,  mark-down or commission,  and may not represent
actual transactions.  The latest price in April, 1997 was a bid of $.125 and ask
of $2.00.

         As of April,  1997,  there  were 759 record  holders  of the  Company's
common stock.  The Company has not previously  declared or paid any dividends on
its  common  stock  and does  not  anticipate  declaring  any  dividends  in the
foreseeable future.

ITEM 6.  Selected Financial Data.
<TABLE>
<CAPTION>
                           PACIFIC FOREST CORPORATION
                              SUMMARY OF OPERATIONS
                                  DECEMBER 1996

                            1996        1995        1994        1993         1992
                          ----------   ----------  ---------   ----------  ---------

<S>                       <C>          <C>         <C>          <C>         <C>
Total Assets..............        39       50,000          0            0           0
Revenues..................         0            0          0            0           0
Operating Expenses........    51,186            0          0            0           0
  Net Earnings (Loss).....   (51,186)           0          0            0           0

Per Share Data
  Earnings (Loss).........      (.05)           0          0            0           0

Average Common Shares
  Outstanding............. 1,100,000    1,029,167  1,000,000    1,000,000   1,000,000
</TABLE>

ITEM 7. Management's  Discussion and Analysis of Financial Condition and Results
        of Operation.

         Current assets at December 31, 1996 were $39 as compared to net current
assets at December 31, 1995 of $50,000.  The decrease in current  assets was due
to a  decrease  in cash of  $49,961  related  mainly  to paying  $40,000  for an
advertising program to raise capital for the Fijian operations.


                                        6

<PAGE>
         Net loss for the year was $51,186 which consisted mostly of advertising
expense of $40,000 and other general and administrative expenses of $11,186.

         The Company has not received  any income as of the year ended  December
31, 1996, and has had limited operational history. All risks inherent in new and
inexperienced enterprises are inherent in the Company's business.
The  Company  has not  made a  formal  study of the  economic  potential  of any
venture.

         The Company will  continue to try to expand  through  acquisitions  and
will  be  extremely  limited  in  its  attempts  to  locate  potential  business
situations for investigation.  The Company plans to continue on a limited basis,
the process of  investigating  possible merger and acquisition  candidates,  and
believes that the Company's  status as a publicly-held  corporation will enhance
its ability to locate such potential business ventures.

         Management anticipates that due to the limited amount of its resources,
the Company may be restricted to  participation  in only one potential  business
venture.  This lack of  diversification  should be considered a substantial risk
because it will not  permit the  Company  to offset  potential  losses  from one
venture against gains from another.

ITEM 8.  Financial Statements and Supplementary Data.

         See Item 14.

ITEM 9.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure.

         Not Applicable.

                                    PART III

ITEM 10.  Directors and Executive Officers of the Registrant.

         The following table shows the positions held by the Company's  officers
and  directors.  The directors  were appointed at inception and will serve until
the  next  annual  meeting  of  the  Company's  stockholders,  and  until  their
successors have been elected and have qualified.  The officers were appointed to
their  positions,  and  continue in such  positions,  at the  discretion  of the
directors.

        Name                  Age              Position
    Roger Tichenor             34         President, Director

         Roger  Tichenor has been the President and sole Director of the Company
since  February  24,  1997.  Mr.  Tichenor is  currently  President of a private
consulting company,  Phoenix Capital, Inc. He is engaged in providing advice and
counsel to small private  companies that are seeking to go public.  Mr. Tichenor
provides  consulting and strategy to public  companies  concerning  business and
financial plans,  negotiating  with potential merger and acquisition  candidates
and introductions into the financial community.

         Mr. Tichenor is 34 years of age and has been involved in the securities
business since 1987. He began in the business as a registered representative and
eventually became Branch Manager of a Chicago based stock and commodity firm. In
1993 he resigned his licenses to pursue his current endeavors.

         On February 8, 1996, David R. Yeaman,  former  Secretary/Treasurer  and
former Director, was charged in the United States District Court for the Eastern
District of  Pennsylvania  with  conspiracy,  wire fraud and fraud in the offer,
purchase and sale of securities,  in violation of 18 U.S.C.  Sections 2, 371 and
1343;  15  U.S.C.  Sections  77q(a),  77x,  78j(b),  and  78ff;  and Rule  10b-5
promulgated by the Securities and Exchange Commission, Title 17, Code of Federal
Regulations, Section 240.10b- 5 (1986).

         On February 22,  1996,  Mr.  Yeaman  entered his not guilty plea to all
charges. The allegations against Mr. Yeaman are based on the government's claims
that he and five of the other  defendants  named in the proceeding  violated the
aforesaid laws by inflating the apparent worth of certain reinsurance  companies
by leasing them alleged worthless securities.  Specifically,  it is alleged that
Mr. Yeaman, with other defendants,  engaged in practices which falsely increased
the quoted

                                        7

<PAGE>



prices  of the  securities  and  misrepresented  restricted  securities  as free
trading securities.  Based on these allegations,  the charges against Mr. Yeaman
include  one count of  conspiracy,  seven  counts of wire  fraud,  six counts of
securities fraud, and aiding and abetting with respect to each count.

         The U.S.  Securities  and Exchange  Commission,  Securities Act of 1933
Release No. 7008 and Securities Exchange Act of 1934 Release No. 32669 announced
that  on July  23,  1993,  it  ordered  David  R.  Yeaman  and  Capital  General
Corporation to permanently  cease and desist from  committing or causing further
violations of Section 5(a) and (c) and 17(a) of the  Securities  Act of 1933 and
Sections 10(b) and 13(g) of the Securities Exchange Act of 1934 and Rules 10b-5,
12b-20 and 13d-1(c) thereunder.

         Krista Castleton  Nielson , former  President and former Director,  was
ordered to  permanently  cease and desist  from  committing  or causing  further
violations  of Section  17(a) of the  Securities  Act and  Section  10(b) of the
Exchange Act and Rules 10b-5 and 12b-20 thereunder.  In addition, the Commission
ordered  the  revocation  of the  registration  of the  common  stock of  Altara
International,  Inc.,  Arrow  Management,  Inc.,  Atlas  Equity,  Inc.,  Dynamic
Associates,  Inc.,  Energy  Systems,  Inc.,  Four  Star  Ranch,  Inc.,  Panorama
Industries,  Inc., Partisan  Corporation,  Quiescent  Corporation,  Saber, Inc.,
Upsilon,  Inc., Vicuna,  Inc., Why Not?, Inc., Xebec Galleon,  Inc., Zebu, Inc.,
and Zeus  Enterprises,  Inc.  pursuant to Section 12(j) of the Exchange Act. The
Commission found that each of the issuers had filed a registration  statement on
Form 10 that contained  materially false and misleading  statements in violation
of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

         Each of the respondents had submitted an Offer of Settlement consenting
to the entry of the Order without  admitting or denying the  allegations  in the
Order. Prior to the submission of the Offers of Settlement,  Capital General, on
behalf of the above mentioned companies,  except for Panorama Industries,  Inc.,
filed a registration  statement on Form S-1 during  December of 1992 to register
the  common  stock  of  those  companies  under  the  Securities  Act  of  1933.
Concurrently  with the  signing of the Offers of  Settlement,  the  Registration
Statement was declared  effective on June 30, 1993. A Post  Effective  Amendment
was filed and declared effective September 2, 1993. Although the registration of
the common  stock  under  Section  12(g) of the 1934 Act was revoked on July 23,
1993, the companies are now registered and reporting under the Securities Act of
1933 by virtue of the filing of Form S-1 as  indicated  by  Commission  File No.
33-55254.

ITEM 11.  Executive Compensation.

         The  Company  has  made no  arrangements  for the  remuneration  of its
officers  and   directors,   except  that  they  will  be  entitled  to  receive
reimbursement for actual, demonstrable out-of-pocket expenses,  including travel
expenses if any, made on the Company's  behalf in the  investigation of business
opportunities.  No  remuneration  has been  paid to the  Company's  officers  or
directors  prior  to the  filing  of  this  form.  There  are no  agreements  or
understandings  with  respect to the amount or  remuneration  that  officers and
directors  are expected to receive in the future.  Management  takes no salaries
from  the  Company  and  does  not  anticipate  receiving  any  salaries  in the
foreseeable  future. No present  prediction or representation  can be made as to
the  compensation  or other  remuneration  which may  ultimately  be paid to the
Company's  management,  since  upon the  successful  consummation  of a business
opportunity,  substantial  changes may occur in the structure of the Company and
its  management.  At such time,  contracts may be negotiated with new management
requiring the payment of annual  salaries or other forms of  compensation  which
cannot  presently  be  anticipated.  Use of the  term  "new  management"  is not
intended  to  preclude  the  possibility  that any of the  present  officers  or
directors  of the  Company  might be  elected  to  serve in the same or  similar
capacities  upon the Company's  decision to  participate in one or more business
opportunities.

<PAGE>
ITEM 12.  Security Ownership of Certain Beneficial Owners and Management.

         The following  table sets forth,  as of December 31, 1996,  information
regarding the beneficial ownership of shares by each person known by the Company
to own five percent or more of the outstanding  shares, by each of the directors
and by the officers and directors as a group.
<TABLE>
<CAPTION>
                                           Name and address                        Amount of              Percent
           Title of class                 of beneficial owner                beneficial ownership         of class
         -----------------     ---------------------------------------     -----------------------      ------------
<S>                            <C>                                         <C>                          <C>   
         Common Stock          FYEO AVV                                                     250,000           22.73%
                               c/o Chancellor Group, Inc.
                               Level 2, 55 Hunter Street
                               Sydney, NSW 200 Australia

         Common Stock          Four Star Ranch1                                             180,800           16.44%
                               3098 So. Highland Drive, Suite 460
                               Salt Lake City, Utah  84106
</TABLE>



                                        8

<TABLE>
<CAPTION>
                                           Name and address                      Amount of                 Percent
           Title of class                 of beneficial owner                beneficial ownership          of class
         -----------------     ---------------------------------------     -----------------------      ------------
<S>                            <C>                                         <C>                          <C>   
         Common Stock          Roger Tichenor                                               100,000            9.09%
                               73 South Palm Avenue, Suite 223
                               Sarasota, Florida 34246

         Common Stock          Steve Guarino                                                100,000            9.09%
                               73 South Palm Avenue, Suite 223
                               Sarasota, Florida 34246

         Common Stock          All Officers and
                               Directors as a Group (1 person)                              100,000            9.09%
</TABLE>

          1    Four  Star  Ranch is  controlled  by David  R.  Yeaman,  a former
               officer and director.

<PAGE>
ITEM 13.  Certain Relationships and Related Transactions.

                  No officer,  director,  nominee for election as a director, or
associate  of such  officer,  director  or nominee is or has been in debt to the
Company during the last fiscal year. However, the Company's officers,  directors
and  major  shareholder,  have  made an oral  undertaking  to make  loans to the
Company in amounts sufficient to enable it to satisfy its reporting requirements
and other obligations incumbent on it as a public company, and to commence, on a
limited basis,  the process of  investigating  possible  merger and  acquisition
candidates.  The Company's status as a publicly-held corporation may enhance its
ability to locate potential business  ventures.  The loans will be interest free
and are  intended to be repaid at a future  date,  if or when the Company  shall
have received sufficient funds through any business  acquisition.  The loans are
intended to provide for the payment of filing fees,  professional fees, printing
and copying fees and other miscellaneous fees.

                                     PART IV

ITEM 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

         Financial Statements and Financial Statement Schedules.
         Financial Statements - December 31, 1996, 1995 and 1994

         Exhibit 27
         Financial Data Summary

         Reports on Form 8-K.
         None.

                                   SIGNATURES

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

                                    PACIFIC FOREST CORPORATION

Date:    April 28, 1997             By: s\   Roger Tichenor
      --------------------              --------------------
                                         Roger Tichenor, President and Director

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

Date:    April 28, 1997              By: s\   Roger Tichenor
       -------------------               --------------------
                                         Roger Tichenor, President and Director






                                        9

<PAGE>



     Supplemental Information to be Furnished With Reports Filed Pursuant to
  Section 15(d) of the Act by Registrants Which Have Not Registered Securities
                        Pursuant to Section 12 of the Act



                   No annual report or proxy  material has been sent to security
holders for the fiscal year ending  December 31, 1996, nor is any such report or
proxy material to be furnished to security  holders  subsequent to the filing of
the annual report of this Form.



                                       10

<PAGE>


                                 SMITH & COMPANY
                          CERTIFIED PUBLIC ACCOUNTANTS

MEMBERS OF:                                    CRANDALL BUILDING SUITE 700
AMERICAN INSTITUTE OF                          10 WEST 100 SOUTH
     CERTIFIED PUBLIC ACCOUNTANTS              SALT LAKE CITY, UTAH 84101
UTAH ASSOCIATION OF                            TELEPHONE:       (801) 575-8297
     CERTIFIED PUBLIC ACCOUNTANTS              FACSIMILE:       (801) 575-8306
------------------------------------------------------------------------------



                          INDEPENDENT AUDITOR'S REPORT


Board of Directors
Pacific Forest Corporation (A Development Stage Company)
(Formerly Zeus Enterprises, Inc.)

We have audited the  accompanying  balance sheets of Pacific Forest  Corporation
(formerly Zeus  Enterprises,  Inc.) (a development stage company) as of December
31,  1996 and  1995,  and the  related  statements  of  operations,  changes  in
stockholders' equity (deficit),  and cash flows for the years ended December 31,
1996,  1995 and 1994 and for the period of April 16, 1986 (date of inception) to
December 31, 1996.  These  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Pacific  Forest  Corporation
(formerly Zeus  Enterprises,  Inc.) (a development stage company) as of December
31, 1996 and 1995 and the results of its  operations,  changes in  stockholders'
equity  (deficit) and its cash flows for the years ended December 31, 1996, 1995
and 1994 and for the period of April 16,  1986 (date of  inception)  to December
31, 1996 in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern. As shown in the financial  statements,
the Company has a working capital  deficiency of $1,186 at December 31, 1996 and
an  accumulated  deficit of $53,186.  The Company has suffered  losses and has a
substantial need for working capital.  This raises  substantial  doubt about its
ability to continue as a going  concern.  Management's  plans in regard to these
matters are described in Note 5 to the financial  statements.  The  accompanying
financial  statements  do not include any  adjustments  that may result from the
outcome of this uncertainty.


                                                /s/ Smith & Company
                                             CERTIFIED PUBLIC ACCOUNTANTS


Salt Lake City, Utah
April 24, 1997

                                       F-1

<PAGE>



                           PACIFIC FOREST CORPORATION
                        (Formerly Zeus Enterprises, Inc.)
                          (A Development Stage Company)
                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                              December 31,
                                                                                      1996                    1995
                                                                                 -----------------     -----------------
             ASSETS
CURRENT ASSETS
<S>                                                                              <C>                   <C>              
         Cash in bank                                                            $              39     $          50,000
                                                                                 -----------------     -----------------

                      TOTAL CURRENT ASSETS                                                      39                50,000

OTHER ASSETS
         Organization costs (Note 1)                                                             0                     0
                                                                                 -----------------     -----------------
                                                                                                 0                     0
                                                                                 -----------------     -----------------

                                                                                 $              39               $50,000
                                                                                 =================     =================

             LIABILITIES & EQUITY (DEFICIT)
CURRENT LIABILITIES
         Accounts payable                                                        $           1,225     $               0
                                                                                 -----------------     -----------------

                      TOTAL CURRENT LIABILITIES                                              1,225                     0

STOCKHOLDERS' EQUITY (DEFICIT) Common Stock $.001 par value:
          Authorized - 100,000,000 shares
          Issued and outstanding
          1,100,000 shares                                                                   1,100                 1,100
         Additional paid-in capital                                                         50,900                50,900
         Deficit accumulated during
          the development stage                                                            (53,186)               (2,000)
                                                                                 -----------------     -----------------

                      TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                  (1,186)               50,000
                                                                                 -----------------     -----------------

                                                                                 $              39     $          50,000
                                                                                 =================     =================
</TABLE>

See Notes to Financial Statements.


                                       F-2

<PAGE>
                           PACIFIC FOREST CORPORATION
                        (Formerly Zeus Enterprises, Inc.)
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                                                       4/16/86
                                                                                                      (Date of
                                                             Year Ended December 31,                inception) to
                                                 1996               1995              1994            12/31/96
                                               ------------      -----------        -----------    --------------

<S>                                            <C>               <C>                <C>            <C>           
Net sales                                      $          0      $         0        $         0    $            0
Cost of sales                                             0                0                  0                 0
                                               ------------      -----------        -----------    --------------

                      GROSS PROFIT                        0                0                  0                 0


General & administrative
 expenses                                            51,186                0                  0            53,186
                                               ------------      -----------        -----------    --------------

                          NET LOSS             $    (51,186)      $        0        $         0    $      (53,186)
                                               ============       ==========        ===========    ==============


Net income (loss) per weighted
 average share                                 $       (.05)      $      .00        $       .00
                                               ============       ==========        ===========


Weighted average number of
 common shares used to compute
 net income (loss) per weighted
 average share                                    1,100,000        1,029,167          1,000,000
                                               ============       ==========        ===========
</TABLE>






See Notes to Financial Statements.


                                       F-3

<PAGE>
                           PACIFIC FOREST CORPORATION
                        (Formerly Zeus Enterprises, Inc.)
                          (A Development Stage Company)
             STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
                                                                                                                      Deficit
                                                                                                                    Accumulated
                                                                     Common Stock               Additional            During
                                                                   Par Value $0.001               Paid-in           Development
                                                               Shares            Amount           Capital              Stage
                                                            -------------    -------------   -----------------  ------------------

<S>                                                         <C>              <C>             <C>                <C>               
Balances at 4/16/86 (Date of inception)                                 0    $           0   $               0  $                0
   Issuance of common stock (restricted) at
     $.002 per share at 4/16/86                                 1,000,000            1,000               1,000
   Net loss for period                                                                                                      (1,950)
                                                            -------------    -------------   -----------------  ------------------
Balances at 12/31/86                                            1,000,000            1,000               1,000              (1,950)
   Net loss for year                                                                                                           (10)
                                                            -------------    -------------   -----------------  ------------------
Balances at 12/31/87                                            1,000,000            1,000               1,000              (1,960)
   Net loss for year                                                                                                           (10)
                                                            -------------    -------------   -----------------  ------------------
Balances at 12/31/88                                            1,000,000            1,000               1,000              (1,970)
   Net loss for year                                                                                                           (10)
                                                            -------------    -------------   -----------------  ------------------
Balances at 12/31/89                                            1,000,000            1,000               1,000              (1,980)
   Net loss for year                                                                                                           (10)
                                                            -------------    -------------   -----------------  ------------------
Balances at 12/31/90                                            1,000,000            1,000               1,000              (1,990)
   Net loss for year                                                                                                           (10)
                                                            -------------    -------------   -----------------  ------------------
Balances at 12/31/91                                            1,000,000            1,000               1,000              (2,000)
   Net income for year                                                                                                           0
                                                            -------------    -------------   -----------------  ------------------
Balances at 12/31/92                                            1,000,000            1,000               1,000              (2,000)
   Net income for year                                                                                                           0
                                                            -------------    -------------   -----------------  ------------------
Balances at 12/31/93                                            1,000,000            1,000               1,000              (2,000)
   Net income for year                                                                                                           0
                                                            -------------    -------------   -----------------  ------------------
Balances at 12/31/94                                            1,000,000            1,000               1,000              (2,000)
   Issuance of common stock (restricted)
     at $.50 per share at 9/12/95                                 100,000              100              49,900
   Net income for year                                                                                                           0
                                                            -------------    -------------   -----------------  ------------------
Balances at 12/31/95                                            1,100,000            1,100              50,900              (2,000)
   Issuance of common stock (Regulation S) at $.9796
     per share to acquire subsidiary at 6/28/96 (1)               100,000              100              97,860
   Issuance of common stock (Regulation S) at $8.73
     per share to retire debt of subsidiary at 6/28/96(2)          45,000               45             392,857
   Issuance of common stock (Regulation S) at $10.00
     per share to acquire subsidiary at 8/23/96 (3)               200,000              200           1,999,800
   Stock canceled (1) (Note 6)                                   (100,000)            (100)            (97,860)
   Stock canceled (2) (Note 6)                                    (45,000)             (45)           (392,857)
   Stock canceled (3) (Note 6)                                   (200,000)            (200)         (1,999,800)
   Net loss for year                                                                                                       (51,186)
                                                            -------------    -------------   -----------------  ------------------

Balances at 12/31/96                                            1,100,000    $       1,100   $          50,900  $          (53,186)
                                                            =============    =============   =================  ==================
</TABLE>


See Notes to Financial Statements.


                                       F-4

<PAGE>
                           PACIFIC FOREST CORPORATION
                        (Formerly Zeus Enterprises, Inc.)
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                                     4/16/86
                                                                                                    (Date of
                                                         Year Ended December 31,                  inception) to
                                                1996             1995               1994             12/31/96
                                           --------------    --------------    --------------    --------------
OPERATING ACTIVITIES
<S>                                        <C>               <C>               <C>               <C>            
     Net income (loss)                     $      (51,186)   $            0    $            0    $      (53,186)
     Adjustments to reconcile net
     income (loss) to cash used by
     cash used by operating  activities:
         Amortization                                   0                 0                 0                50
     Changes in liabilities:
         Accounts payable                           1,225                 0                 0             1,225
                                           --------------    --------------    --------------    --------------

                      NET CASH USED BY
                  OPERATING ACTIVITIES            (49,961)                0                 0           (51,911)

INVESTING ACTIVITIES
     Organization costs                                 0                 0                 0               (50)
                                           --------------    --------------    --------------    --------------

                      NET CASH USED BY
                  INVESTING ACTIVITIES                  0                 0                 0               (50)

FINANCING ACTIVITIES
     Proceeds from sale of
      common stock                                      0            50,000                 0            52,000
                                           --------------    --------------    --------------    --------------

                  NET CASH PROVIDED BY
                  FINANCING ACTIVITIES                  0            50,000                 0            52,000
                                           --------------    --------------    --------------    --------------

                 INCREASE (DECREASE) IN
                         CASH AND CASH
                  EQUIVALENTS                     (49,961)           50,000                 0                39

     Cash and cash equivalents
     at beginning of year                          50,000                 0                 0                 0
                                           --------------    --------------    --------------    --------------

                 CASH & CASH EQUIVALENTS
                        AT END OF YEAR     $           39    $       50,000    $            0    $           39
                                           ==============    ==============    ==============    ==============
</TABLE>




See Notes to Financial Statements.


                                       F-5

<PAGE>
                           PACIFIC FOREST CORPORATION
                        (Formerly Zeus Enterprises, Inc.)
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 1996


NOTE 1:       SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
              Accounting Methods
              The Company  recognizes  income and expenses  based on the accrual
              method of accounting.

              Dividend Policy:
              The Company has not yet  adopted any policy  regarding  payment of
              dividends.

              Organization Costs:
              The  Company  amortized  its  organization  costs over a five year
              period.

              Cash and Cash Equivalents
              For financial statement purposes, the Company considers all highly
              liquid  investments  with an original  maturity of three months or
              less when purchased to be cash equivalents.

              Estimates
              The  preparation  of  financial   statements  in  conformity  with
              generally accepted  accounting  principles  requires management to
              make estimates and assumptions that affect the reported amounts of
              assets and liabilities  and  disclosures of contingent  assets and
              liabilities  at the  date  of the  financial  statements  and  the
              reported  amount of revenue  and  expenses  during  the  reporting
              period. Actual results could differ from those estimates.

              Income Taxes:
              The Company  records the income tax effect of  transactions in the
              same year that the  transactions  enter into the  determination of
              income, regardless of when the transactions are recognized for tax
              purposes. Tax credits are recorded in the year realized. Since the
              Company has not yet realized income as of the date of this report,
              no provision for income taxes has been made.

              In  February,  1992,  the  Financial  Accounting  Standards  Board
              adopted  Statement  of  Financial  Accounting  Standards  No. 109,
              Accounting for Income Taxes,  which supersedes  substantially  all
              existing authoritative  literature for accounting for income taxes
              and  requires  deferred tax balances to be adjusted to reflect the
              tax rates in effect  when those  amounts  are  expected  to become
              payable or refundable.  The Statement was applied in the Company's
              financial  statements  for the fiscal year  commencing  January 1,
              1993.

              At December  31, 1996 a deferred  tax asset has not been  recorded
              due to the Company's  lack of operations to provide  income to use
              the net  operating  loss  carryover  of $53,186  which  expires as
              follows:

                  Year Ended                Expires             Amount
              -------------------     -------------------     ----------
               December 31, 1986       December 31, 2001      $    1,950
               December 31, 1987       December 31, 2002              10
               December 31, 1988       December 31, 2003              10
               December 31, 1989       December 31, 2004              10
               December 31, 1990       December 31, 2005              10
               December 31, 1991       December 31, 2006              10
               December 31, 1996       December 31, 2015          51,186
                                                              ----------
                                                              $   53,186
                                                              ==========

<PAGE>
              A change in control of the  Company  and a lack of  continuity  of
              operations  may  reduce or limit the  amount of the net  operating
              loss than can be used in future years.

NOTE 2:       DEVELOPMENT STAGE COMPANY
              The Company was  incorporated  under the laws of the State of Utah
              on April 16, 1986 as Zeus  Enterprises,  Inc.  and has been in the
              development stage since  incorporation.  On December 30, 1993, the
              Company was dissolved as a Utah corporation and  reincorporated as
              a Nevada  corporation.  On May 31,  1996,  the name was changed to
              Pacific Forest  Corporation.  The Company is currently looking for
              business opportunities.

                                       F-6

<PAGE>
                           PACIFIC FOREST CORPORATION
                        (Formerly Zeus Enterprises, Inc.)
                          (A Development Stage Company)
                    NOTES TO FINANCIAL STATEMENTS (Continued)
                                December 31, 1996


NOTE 3:       CAPITALIZATION
              On the date of incorporation, the Company sold 1,000,000 shares of
              its common stock to Capital  General  Corporation  for $2,000 cash
              for an average  consideration of $.002 per share. On September 12,
              1995, the Company sold an additional  100,000 shares of its common
              stock to  Capital  General  Corporation  for  $50,000  cash for an
              average  consideration of $.50 per share. The Company's authorized
              stock  includes  100,000,000  shares of common  stock at $.001 par
              value.

NOTE 4:       RELATED PARTY TRANSACTIONS
              The  Company  neither  owns or leases  any real  property.  Office
              services are provided, without charge, by current management. Such
              costs  are   immaterial   to  the   financial   statements,   and,
              accordingly,  have not been  reflected  therein.  The officers and
              directors of the Company are involved in other business activities
              and  may,  in  the  future,  become  involved  in  other  business
              opportunities.   If  a  specific  business   opportunity   becomes
              available,  such persons may face a conflict in selecting  between
              the Company and their other  business  interests.  The Company has
              not formulated a policy for the resolution of such conflicts.

NOTE 5:       GOING CONCERN
              The  financial  statements  are  presented  on the basis  that the
              Company is a going concern,  which contemplates the realization of
              assets and the satisfaction of liabilities in the normal course of
              business  over a reasonable  length of time. At December 31, 1996,
              the  Company  has a deficit in working  capital of $1,186,  a loss
              from operations for 1996 of $51,186 and an accumulated  deficit of
              $53,186.

              Management  feels that loans from  related  parties  will  provide
              sufficient  working  capital to allow the Company to continue as a
              going concern.

NOTE 6:       ACQUISITION AND DISPOSITION OF SUBSIDIARY
              On June 28, 1996,  the Company issued 100,000 shares of Regulation
              S common  stock to acquire 67% of Pacific  Forest  (Fiji)  Limited
              ("Fiji").  On August 23,  1996,  200,000  shares of  Regulation  S
              common stock were issued to acquire the remaining 33% of Fiji. The
              Company  intended to operate a timber  milling  operation  in Fiji
              through the subsidiary.  By December 31, 1996, it was evident that
              the Company would not succeed in obtaining  the necessary  capital
              to   properly   fund  the  Fiji   operations.   Accordingly,   all
              transactions  related to the subsidiary  were canceled,  effective
              December  31,  1996.  The  financial  statements  for  1996 do not
              reflect any activities of the former subsidiary. Audited financial
              information  for  the  former  subsidiary  is  not  available  and
              management  believes  the  activities  are not  meaningful  as the
              operations no longer relate to the Company.


                                       F-7