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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark one)

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

                     For the fiscal year ended June 30, 1997

                                       OR

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

              For the transition period from ________ to _________

                       Commission file number 33-37534-NY

                              WESTECH CAPITAL CORP.
             (Exact name of registrant as specified in its charter)

New York                                            13-3577716
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                      Identification No.)

180 West End Avenue, Apt. 23F
New York, New York                              10023
(Address of principal executive offices)        Zip Code

Issuer's telephone number (212) 873-1050

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

                                                    Name of each exchange on
Title of each class                                 which registered

       N/A                                                     N/A

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

                                      None
                                (Title of class)

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

Yes _X_     No ____


<PAGE>


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]

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

State the  aggregate  market  value of the voting  stock held by  non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days.  (See definition of an affiliate in Rule 12b-2 of the Exchange Act.) Zero.
(According  to the  National  Quotation  Bureau,  Inc.  there  are no  published
quotations for the issuer's Common Stock.)

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. 102,500 shares of Common Stock, $.001
par value, outstanding as of September 22, 1997.


                   DOCUMENTS INCORPORATED BY REFERENCE - None


                                        2


<PAGE>



                                     PART I

Item 1. Description of Business.


General

     Westech Capital Corp. (the "Company" or the  "Registrant") was organized as
a New York  corporation on July 18, 1990 for the purpose of investing in any and
all types of  assets,  properties  and  businesses.  It has not  engaged  in any
business operations.  The Company,  which is commonly known as a "blind pool" or
"blank  check",  will  attempt  to  acquire a  business  in an  industry  as yet
undetermined.   The  Company   presently  has  no  specified  type  of  business
contemplated to be acquired.

     In connection with its initial capitalization, the Registrant issued 12,500
shares of its Common Stock to its officers and  directors  for the aggregate sum
of $2,500.  In  furtherance  of its  corporate  purpose,  on May 26,  1992,  the
Registrant  closed its initial  public  offering  of 50,000  Units at a price of
$1.00 per Unit. Each Unit consisted of one share of Common Stock,  one Class "A"
Common Stock Purchase Warrant,  and one Class "B" Common Stock Purchase Warrant.
The Warrants,  which entitled the holders to purchase additional Common Stock at
$5.00 and $10.00,  respectively,  have expired. In July 1997, the Company raised
$10,000  from the sale of 40,000  shares of its Common  Stock in order to obtain
working capital.

     The  Registrant  is seeking the  acquisition  of or merger with an existing
company  ("Potential  Business  Acquisitions").  Given the limited assets of the
Registrant, it is likely to acquire or merge with a company which is not seeking
immediate  substantial  amounts  of cash but one which  desires to  establish  a
public  trading market for its shares.  However,  within the next six months the
Company intends to seek to raise  additional  funds to augment its cash on hand,
which also could be used for the benefit of any Business  Acquisition seeking an
immediate cash infusion.  There can be no assurance that the Company's financing
efforts will be successful.

     There are numerous  reasons why an existing  privately-held  company  would
seek to become a public  company  through a merger or  acquisition  rather  than
doing its own public  offering.  Such reasons  include  avoiding the time delays
involved in a public offering; retaining a larger share of voting control of the
publicly-held  company;  reducing the cost factors incurred in becoming a public
company; and avoiding any dilution  requirements set forth under various states'
blue sky laws.

     The  Registrant  does not  propose to  restrict  its  search for  Potential
Business Acquisitions to any particular industry or any


                                       3
<PAGE>


particular  geographic  area and  may,  therefore,  engage  in  essentially  any
business to the extent of its limited resources.

     It is anticipated that knowledge of Potential Business Acquisitions will be
made known to the  Registrant  by various  sources,  including  its officers and
directors,   shareholders,   professional   advisors   such  as  attorneys   and
accountants,  securities  broker-dealers,  venture  capitalists,  members of the
financial  community,  and  others who may  present  unsolicited  proposals.  In
certain  circumstances,  the  Registrant  may agree to pay a finder's  fee or to
otherwise  compensate  such  persons for services  rendered in bringing  about a
transaction.  However,  no cash  finder's  fee shall be paid to any  officer  or
director of the Registrant or their affiliates or associates.  The amount of any
such  finder's fee or other  compensation  which may be paid to such persons for
services  rendered  in  bringing  about  a  transaction  is  subject  to  future
negotiation between the Registrant, the entity to be acquired and the finder.

Selection of Opportunities

     The analysis of new business opportunities has and will be undertaken by or
under the supervision of the officers and directors of the  Registrant,  none of
whom  is a  professional  business  analyst  or has  any  previous  training  or
experience in business analysis or in selecting or hiring business analysts. The
Registrant has, since the date of the closing of its public offering, considered
potential  acquisition  transactions  with several companies but as of this date
has not entered into any definitive agreement with any party. The Registrant has
unrestricted  flexibility in seeking,  analyzing and  participating in Potential
Business Opportunities. In its efforts to analyze potential acquisition targets,
the Registrant will consider the following kinds of factors:

     (a) Potential for growth,  indicated by new technology,  anticipated market
expansion or new products;

     (b)  Competitive  position as  compared to other firms of similar  size and
experience  within the  industry  segment as well as within  the  industry  as a
whole;

     (c) Strength and diversity of management,  either in place or scheduled for
recruitment;

     (d) Capital requirements and anticipated availability of required funds, to
be provided by the Registrant or from operations, through the sale of additional
securities,  through  joint  ventures  or  similar  arrangements  or from  other
sources;

     (e)  The  cost  of  participation  by the  Registrant  as  compared  to the
perceived tangible and intangible values and potentials;


                                       4
<PAGE>


     (f) The extent to which the business opportunity can be advanced;

     (g) The  accessibility of required  management  expertise,  personnel,  raw
materials, services, professional assistance and other required items; and

     (h) other relevant factors.

     In applying the foregoing  criteria,  no one of which will be  controlling,
management will attempt to analyze all factors in the  circumstances  and make a
determination based upon reasonable  investigative  measures and available data.
Potentially  available  business  opportunities  may  occur  in  many  different
industries and at various stages of development, all of which will make the task
of  comparative  investigation  and  analysis  of  such  business  opportunities
extremely  difficult  and  complex.  Due to  the  Registrant's  limited  capital
available for  investigation  and  management's  limited  experience in business
analysis,  the Registrant may not discover or adequately  evaluate adverse facts
about the opportunity to be acquired.

Form of Acquisition

     The manner in which the  Registrant  participates  in an  opportunity  will
depend upon the nature of the  opportunity,  the respective needs and desires of
the  Registrant  and  the  promoters  of  the  opportunity,   and  the  relative
negotiating strength of the Registrant and such promoters.

     It is likely  that the  Registrant  will  acquire  its  participation  in a
business opportunity through the issuance of common stock or other securities of
the Registrant.  Although the terms of any such transaction cannot be predicted,
it should be noted that in certain  circumstances  the criteria for  determining
whether or not an  acquisition is a so-called  "tax free"  reorganization  under
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended, depends upon
the issuance to the  shareholders of the acquired company of at least 80 percent
of  the  common  stock  of  the  combined  entities  immediately  following  the
reorganization.  If a transaction  were  structured  to take  advantage of these
provisions  rather than other "tax free" provisions  provided under the Internal
Revenue Code, all prior shareholders would in such circumstances  retain 20%. or
less  of  the  total  issued  and  outstanding  shares.  This  could  result  in
substantial  additional dilution to the equity of those who were shareholders of
the Registrant prior to such reorganization.

     The present  shareholders of the Registrant will likely not have control of
a majority of the voting  shares of the  Registrant  following a  reorganization
transaction.  As  part  of  such  a  transaction,  all  or  a  majority  of  the
Registrant's directors may


                                       5
<PAGE>


resign and new directors may be appointed without any vote by shareholders.

     In the case of an acquisition, the transaction may be accomplished upon the
sole  determination of management  without any vote or approval by shareholders.
In the case of a statutory merger or consolidation,  it will likely be necessary
to call a  shareholders'  meeting  and obtain the  approval  of the holders of a
majority of the  outstanding  shares.  The necessity to obtain such  shareholder
approval may result in delay and additional  expense in the  consummation of any
proposed  transaction  and will also give rise to  certain  appraisal  rights to
dissenting shareholders. Most likely, management will seek to structure any such
transaction so as not to require shareholder approval.

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

Acquisition Restrictions

     The  Company  does  not  intend  to  pursue  any  business  opportunity  or
transaction which would render it an "investment company" as the term is defined
in the  Investment  Company  Act of 1940.  In this  regard,  the Company has not
engaged  and does  not  intend  to  engage  in the  business  of (1)  investing,
reinvesting,  or trading in securities as its primary business, (2) issuing face
amount  certificates  of the  installment  type or (3)  investing,  reinvesting,
owning, holding, or trading in securities.  Being deemed an "investment company"
under such Act, without  registration as such, could result in certain instances
in civil liability and criminal penalties to controlling  persons of, as well as
civil liabilities and unenforceability of contracts with regard to, the Company.

     The  Company  has not  engaged  and does not intend nor have  authority  to
engage  in  the  business  of  advising  others,   either  directly  or  through
publications  or  writings,  as  to  the  value  of  securities  or  as  to  the
advisability of investing in, purchasing, or selling securities for compensation
nor as a part of its regular business to issue or promulgate analyses or reports
concerning  securities.  The  Company  does  not  intend,  nor  does it have any
authority, to pursue any course of business which would render it an "investment
advisor" as that term is defined in the Investment Advisors Act of 1940.


                                       6
<PAGE>


Daily Operations and Employees

     To date, the Company has had no, and until an active  business is commenced
or acquired  the  Company  will have no,  employees  or  day-to-day  operations.
Management  is unable to make any estimate as to the future  number of employees
which may be necessary, if any, to work for the Company. If an existing business
is  acquired  it is  possible  that  its  existing  staff  would be hired by the
Company.  At the present time it is the intention of management to meet or be in
telephone contact as needed to review business opportunities, evaluate potential
acquisitions and otherwise  operate the affairs of the Company.  Management will
not be compensated for these services rendered on behalf of the Company.


Item 2. Description of Property.

     The  Company  has  entered  into  an  oral  arrangement  with  Neil  Ragin,
President, Treasurer and Chairman of the Board of the Company, providing for him
to furnish the use of a portion of his business office as a temporary office for
the Company until such time it needs additional facilities. The Company will not
pay rent for the use of such temporary facilities.


Item 3. Legal Proceedings.

     There are no material  pending legal  proceedings to which the Company is a
party or to which any of its  property  is subject and no such  proceedings  are
known to the Company to be threatened or contemplated by or against it.


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

     No matters were  submitted to a vote of security  holders during the fiscal
year covered by this Report.


                                       7
<PAGE>


                                     PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

Market Information

     There is no public market for the Company's securities.

Holders

     As of September  19, 1997,  there were 39 record  holders of the  Company's
Common Stock.

Common Stock

     The Company is authorized to issue  50,000,000  shares of Common Stock, par
value $.001 each. As of September 22, 1997 there were 102,500 such shares issued
and  outstanding,  all of which were fully paid and  non-assessable.  Holders of
shares of Common Stock are  entitled to one vote for each share held.  There are
no preemptive,  subscription,  conversion or redemption rights pertaining to the
shares.  Holders  of the shares of Common  Stock are  entitled  to receive  such
dividends  as may be declared by the Board of  Directors  out of assets  legally
available  therefor and to share ratably in the assets of the Company  available
upon liquidation.

     The  holders  of shares of Common  Stock do not have the right to  cumulate
their votes in the election of directors and,  accordingly,  the holders of more
than  50% of  all  such  shares  outstanding  can  elect  all of the  directors.
Remaining shareholders will not be able to elect any directors.

Dividends

     The  Company  has not paid cash  dividends  to date and  intends  to retain
earnings,  if any, for use in its  activities.  Payment of cash dividends in the
future  will be  wholly  dependent  upon  the  Board of  Directors  and upon the
Company's earnings,  financial condition, capital requirements and other factors
deemed  relevant by them. It is not likely that cash  dividends  will be paid in
the foreseeable future.

     In the  event  of the  acquisition  of or  merger  with a  business  by the
Company,  control of the Company and its Board of Directors  may pass to others.
In that event,  the payment of  dividends  would be wholly  dependent  upon such
persons.


                                       8
<PAGE>


Item 6. Management's Discussion and Analysis or Plan of Operation.

     (a) Plan of Operation

     The Registrant was formed July 18, 1990 for the purpose of investing in any
and all types of assets,  properties  and  businesses.  In  connection  with the
initial  capitalization  of the  Company a total of 12,500  shares of its common
stock were issued to its officers and directors for the aggregate sum of $2,500.
On November 12,  1991,  the United  States  Securities  and Exchange  Commission
granted  effectiveness to a Registration  Statement on Form S-18 for an offering
of 50,000 Units of Common Stock and Warrants to purchase  shares of Common Stock
at a price of $1.00 per Unit. The offering was closed in May 1992. In July 1997,
the Company raised $10,000 from the sale of 40,000 shares of its Common Stock in
order to obtain working capital.

     The Registrant is implementing its plan of operation by seeking to locate a
suitable company which desires to go public through a "reverse acquisition" with
it.  Although no assurance can be given,  the Company  believes its cash on hand
will  satisfy  its cash  requirements  until  it  effects  such an  acquisition.
However,  it may seek to raise  additional  funds  in the  next six  months  (in
addition to the $10,000 raised in July 1997) to augment its cash on hand,  which
also could be used for the  benefit of any  company it acquires or with which it
merges.  There can be no assurance that the Company's  financing efforts will be
successful.  The  Company's  Plan of  Operation  is further  described in Item 1
hereof.

     (b)  Management's  Discussion  and  Analysis  of  Financial  Condition  and
          Results of Operations

     Since  inception the  Registrant has not any business  operations,  and its
activities  have been limited to the sale of its securities and the search for a
company to acquire or with which to merge through a "reverse  acquisition".  The
Registrant will not have any business operations until, if ever, such time as it
effects an  acquisition  or merger.  Accordingly,  no operating  income has been
generated by the Registrant since its inception.

     For the years ended June 30,  1996 and 1997,  the Company had a net loss of
($7,743)  and  ($12,949),   respectively,   or  ($.12)  and  ($.21)  per  share,
respectively.  From  inception to June 30,  1997,  the Company had a net loss of
$45,242,  or ($.92) per share.  Such losses are attributable  primarily to costs
associated with the Company's attempts to identify and acquire a business.


                                       9
<PAGE>


Item 7. Financial Statements.

                          Index to Financial Statement

         Independent Accountants' Report

         Balance Sheets

                  June 30, 1997 and 1996

         Statement of Operations

                  Years ended June 30, 1997, 1996 and 1995

         Statement of Changes in Stockholders' Equity

                  Years ended June 30, 1997, 1996 and 1995

         Statement of Cash Flows
                  Years ended June 30, 1997, 1996 and 1995

         Notes to Financial Statements


                                       10
<PAGE>


                          INDEPENDENT AUDITOR'S REPORT



To the Board of Directors and Stockholders of
Westech Capital Corp.


We have audited the  accompanying  balance  sheets of Westech  Capital  Corp. (a
development  stage  company)  as of June 30,  1997  and  1996,  and the  related
statements  of  operations,  stockholders'  equity  and cash flows for the years
ended June 30, 1997, 1996 and 1995 and for the period July 18, 1990  (inception)
to June 30, 1997.  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 Westech  Capital  Corp.  (a
development  stage  company) as of June 30, 1997 and 1996 and the results of its
operations and its cash flows for the years ended June 30, 1997,  1996, 1995 and
for the period July 18, 1990  (inception)  to June 30, 1997 in  conformity  with
generally accepted accounting principles.



/s/ Scott & Guilfoyle


Lake Success, New York
August 11, 1997


                                       11
<PAGE>


                              WESTECH CAPITAL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                                  BALANCE SHEET
                                     JUNE 30



                                                             1997        1996

                                     ASSETS

CURRENT ASSETS
Cash                                                       $    164    $  7,060
                                                           ========    ========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
     Accrued expenses                                      $  8,324    $  2,271
                                                           --------    --------

         TOTAL LIABILITIES                                    8,324       2,271
                                                           --------    --------

STOCKHOLDERS' EQUITY
         Common stock, $.001 par value
          50,000,000 shares authorized,                      62,500
          shares issued and outstanding                          63          63
         Capital in excess of par value                      37,019      37,019
         Deficit accumulated during
          development stage                                 (45,242)    (32,293)
                                                           --------    --------

         TOTAL STOCKHOLDERS' EQUITY                          (8,160)      4,789
                                                           --------    --------

         TOTAL LIABILITIES AND
           STOCKHOLDERS' EQUITY                            $    164    $  7,060
                                                           ========    ========


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


                                       12
<PAGE>



                              WESTECH CAPITAL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                               FOR THE YEARS ENDED                    FROM INCEPTION
                                                                    JUNE 30                          JULY 18, 1997 TO
                                                1997                 1996               1995          JUNE 30, 1997
<S>                                             <C>                 <C>                 <C>                 <C>   
REVENUE
   Interest                                       NONE                NONE                NONE                NONE
                                              --------            --------            --------            --------
EXPENSES
        Miscellaneous                                9                   0                                   0 199
        Office                                       0                   0                 165               2,415
        Professional                             8,364               6,220               5,503              30,127
        Filing and transfer fees                 3,905                 802                 719               7,346
                                              --------            --------            --------            --------

        TOTAL                                   12,278               7,022               6,387              40,087
                                              --------            --------            --------            --------

LOSS BEFORE INCOME TAXES                       (12,278)             (7,022)             (6,387)            (40,087)

INCOME TAXES                                       671                 721                 721               5,155
                                              --------            --------            --------            --------

NET LOSS                                      $(12,949)           $ (7,743)           $ (7,108)           $(45,242)
                                              ========            ========            ========            ========

LOSS PER SHARE
        Net loss per share                    $   (.21)           $   (.12)           $   (.11)           $   (.92)
                                              ========            ========            ========            ========

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING                       62,500              62,500              62,500              49,272
                                              ========            ========            ========            ========
</TABLE>



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


                                       13
<PAGE>


                              WESTECH CAPITAL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                        STATEMENT OF STOCKHOLDERS' EQUITY



<TABLE>
<CAPTION>
                                                                                                   Deficit                Total
                                               Common Stock               Capital in Excess    Accumulated During      Stockholders'
                                        Shares              Amount           of Par Value       Development Stage         Equity
<S>                                       <C>             <C>               <C>                    <C>                   <C>     
Balance, July 18, 1990 (inception)             0          $     0                    0             $        0            $       0

Issuance of shares to Officer and
  Directors of the Company for cash
  July 23, 1990                           12,500               13                2,487                                       2,500

Net loss from inception to
  June 30, 1991                                                                                          (962)                (962)

Proceeds of initial public offering       50,000               50               49,950                                      50,000

Offering costs                                                                 (14,627)                                    (14,627)

Net loss for the year ended
  June 30, 1992                                                                                        (5,123)              (5,123)

Offering costs                                                                    (791)                                       (791)

Net loss for the year ended
  June 30, 1993                                                                                        (5,428)              (5,428)

Net loss for the year ended
  June 30, 1994                                                                                        (5,929)              (5,929)

Net loss for the year ended
  June 30, 1995                                                                                        (7,108)              (7,108)
                                          ------          -------           ----------             ----------            --------- 

Balance, June 30, 1995                    62,500               63               37,019                (24,550)              12,532

Net loss for the year ended
  June 30, 1996                                                                                        (7,743)              (7,743)
                                          ------          -------           ----------             ----------            --------- 

Balance, June 30, 1996                    62,500               63               37,019                (32,293)               4,789

Net loss for the year ended
  June 30, 1997                                0                0                    0                (12,949)             (12,949)
                                          ------          -------           ----------             ----------            --------- 

Balance, June 30, 1997                    62,500          $    63           $   37,019             $  (45,242)           $  (8,160)
                                          ======          =======           ==========             ==========            ========= 
</TABLE>


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

                                       14

<PAGE>


                              WESTECH CAPITAL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                             STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                           FOR THE YEARS ENDED            FROM INCEPTION
                                                 JUNE 30                 JULY 18, 1997 TO
                                      1997        1996        1995        JUNE 30, 1997
<S>                                <C>         <C>         <C>             <C>      
CASH FLOWS FROM OPERATING                                                
 ACTIVITIES                                                              
        Net loss                   $(12,949)   $ (7,743)   $ (7,108)       $(45,242)
        Increase (decrease) in                                           
         accrued expenses             6,053        (352)        544           8,324
                                   --------    --------    --------        --------
                                                                         
NET CASH USED BY OPERATING                                               
 ACTIVITIES                          (6,896)     (8,095)     (6,564)        (36,918)
                                   --------    --------    --------        --------
                                                                         
CASH FLOWS FROM FINANCING                                                
 ACTIVITIES                                                              
        Issuance of common stock          0           0           0              63
        Paid in capital                   0           0           0          52,437
        Offering costs                    0           0           0         (15,418)
                                   --------    --------    --------        --------
                                                                         
NET CASH PROVIDED BY                                                     
 FINANCING ACTIVITIES                     0           0           0          37,082
                                   --------    --------    --------        --------
                                                                         
NET INCREASE (DECREASE) IN CASH      (6,896)     (8,095)     (6,564)            164
                                                                         
BEGINNING CASH BALANCE                7,060      15,155      21,719               0
                                   --------    --------    --------        --------
                                                                         
ENDING CASH BALANCE                $    164    $  7,060    $ 15,155        $    164
                                   ========    ========    ========        ========
                                                                      
</TABLE>




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


                                       15
<PAGE>


                              WESTECH CAPITAL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                            JUNE 30, 1997, 1996, 1995

NOTE 1:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION BUSINESS ACTIVITY AND DIVIDEND POLICY

The Company was incorporated under the laws of the State of New York on July 18,
1990.  The Company is in the  development  stage and has not  commenced  planned
principal operations.  The Company is seeking the acquisition of, or merger with
an existing Company.  The fiscal year of the corporation is June 30. The Company
has, at the present time,  not paid any dividends and any dividends  that may be
paid in the future will depend upon the  financial  requirements  of the Company
and other relevant factors.

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 and  disclosures.  Actual results could differ from
those estimates and
assumptions.

General and related party

The Company entered into an oral arrangement  with Mr. Neil Ragin,  President of
the  Company,  providing  for the use of a portion of his  business  office as a
temporary office until such time as the Company needs additional facilities. The
Company does not pay rent for the use of such facilities.

SUPPLEMENTAL CASH FLOWS INFORMATION

The following were paid during the year ended June 30, 1997:

     Income taxes                                         $704

INCOME TAXES

As of June 30, 1997, the Company had a $42,742 net operating  loss  carryforward
available to offset future taxable income through 2006.


NOTE 2:  SUBSEQUENT EVENTS

During July 1997 the Company issued 40,000 common shares for a total of $10,000.
This sale was completed to enable the Company to meet its cash  requirements for
at least the next year.


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<PAGE>



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

         N/A


                                    PART III

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

     The following table sets forth certain  information  concerning the current
directors  and  executive  officers of the  Company,  who have served  since the
inception  of the Company and will serve for one year or until their  respective
successors are elected and have qualified:

NAME                              AGE                     POSITION
----                              ---                     --------

Neil Ragin                        55                Chairman of the Board,
                                                    President and Treasurer

Michael J. Tannenholtz            40                Secretary and Director

Dr. William Esh                   47                Director

     Neil Ragin has been  Chairman of the Board,  President and Treasurer of the
Company since July 1990. Mr. Ragin is, and has been since 1974, the President of
Gartner's Hardware, Inc., a retail hardware store located in New York City. From
1988  to June  1995,  Mr.  Ragin  was  the  President  of  Ragar  Corp.,  then a
publicly-held blind pool company which acquired Carpet Barn.

     Michael J. Tannenholtz has been the Secretary and a Director of the Company
since July 1990.  Mr.  Tannenholtz  is,  and has been since  1979,  the owner of
Michael J. Tannenholtz Consulting Corp., a New York city based accounting firm.

     Dr. William Esh was appointed a director of the Company in August 1991. Dr.
Esh has been actively  engaged in the private  practice of dentistry since 1975.
From  1988 to  June  1995,  Dr.  Esh  was a  director  of  Ragar  Corp.,  then a
publicly-held blind pool company which acquired Carpet Barn.

     The Company has no significant  employees and no family relationships exist
between any of the executive officers and directors.

Item 10.  Executive Compensation.

     No officer or director of the Company has  received  remuneration  from the
Company  in  fiscal  1996  or  prior  years,  and  it is  not  anticipated  that
remuneration will be paid prior to the Company's acquisition of a business.  The
Company has no current

 
                                       17
<PAGE>


intent to issue shares of its common stock to management  in  connection  with a
Business Acquisition. However, the Company may subsequently deem the issuance of
shares  to  management  for  services   rendered  in  connection  with  such  an
Acquisition to be fair and reasonable to the Company and its public shareholders
in light of the  services  rendered.  In the event any  shares  are  issued  for
services  rendered by  management  they shall be issued in such an amount as the
Board of  Directors  deems fair and  reasonable  to the  Company  and its public
shareholders  and in compliance with  management's  fiduciary duties under state
law. Officers and directors will be reimbursed for actual out-of-pocket expenses
incurred on behalf of the Company as approved by the Board of Directors.


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

     The  following  table sets forth  certain  information  as to the number of
shares of the  Company's  Common Stock deemed to be owned  beneficially  by each
person known by the Registrant to be deemed to be the  beneficial  owner of more
than 5% of the  outstanding  Common Stock,  each of its  executive  officers and
directors,  and all of its  executive  officers  and  directors  as a group,  at
September  22, 1997.  Except as  indicated  in the  footnote to this table,  the
Company  believes that the named persons have sole voting and  investment  power
with respect to the shares indicated:

<TABLE>
<CAPTION>

Name and Address of                           Position With                   Number of             Percentage
Beneficial Owner                              Company                         Shares                of Class
-------------------                           ----------------                -----------           --------------
<S>                                           <C>                              <C>                      <C>
Neil Ragin(1)                                 President,                       11,500                    11%
180 West End Avenue                           Treasurer,
New York, NY  10023                           Director

Michael J. Tannenholtz(1)                     Secretary,                        1,000                     1
250 West 54th Street                          Director
Suite 703
New York, NY  11706

Dr. William Esh(1)                            Director                           -0-                    -0-
243 West End Avenue
New York, NY  10023

Lawrence E. Kaplan(1)                           N/A                            40,000                   39

150 Vanderbilt Motor
  Parkway
Hauppauge, NY  11788

Executive Officers and
Directors as a Group                                                           12,500                   12
(3 persons)
</TABLE>

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

(1)  These  individuals  may  be  deemed  "parents"  and  the  promoters  of the
     Registrant  as  those  terms  are  defined  in the  Rules  and  Regulations
     promulgated under the Securities Act of 1933, as amended.



                                       18
<PAGE>


Item 12.  Certain Relationships and Related Transactions

     No  member  of  management  nor   controlling   shareholder   has  had  any
transactions with the Company during its past fiscal year, nor proposes any such
transactions, in which the amount involved exceeds $60,000.

     In  connection  with its initial  capitalization,  the Company  sold 12,500
shares  of its  Common  Stock  to its  founding  shareholders  for an  aggregate
consideration of $2,500 in cash.

     Agreement  for  Clerical  Services -  Promoter.  In fiscal 1994 the Company
retained  Stanley  Kaplan  Management  Consultants,  Inc.  ("SKMC")  to  provide
clerical  and  bookkeeping  services to the  Registrant  for a fee of $50.00 per
month.  The  agreement  between  Mr.  Kaplan  and the  Company  was oral and was
terminable at will by either party.  SKMC  terminated  such agreement  effective
November 23, 1994.  Stanley A. Kaplan,  the  president and sole  shareholder  of
SKMC, referred the Company to its legal counsel and auditor. Mr. Kaplan is not a
parent or control party of the Company.  Inasmuch as Mr. Kaplan offered  certain
advice to management in connection with the formation of the Company,  he may be
deemed a  "promoter"  of the  Company  as that  term is  defined  in Rule 405 of
Regulation C as promulgated by the Securities and Exchange Commission.

     Mr.  Kaplan  has  been  the  president  and sole  shareholder  of SKMC,  an
accounting firm, for at least the past ten years. Since January 1987, Mr. Kaplan
has also been an officer and director of Gro-Vest, Inc., a management consulting
firm.

     On August 12, 1994, Mr. Kaplan  settled,  without  admitting or denying any
allegations,  a civil action brought  against him by the Securities and Exchange
Commission relating to Atratech, Inc. The action charged Mr. Kaplan with certain
violations of the Securities Act of 1933 and the Securities Exchange Act of 1934
(the "Exchange  Act").  As part of the  settlement,  Mr. Kaplan was  permanently
restrained and enjoined from future  violations of the  securities  laws and was
permanently  barred from acting as an officer or director of any issuer that has
a class of securities registered under Section 12 of the Exchange Act or that is
required to file reports pursuant to Section 15(d) of the Exchange Act.

     The  Company  neither  has  nor  had  any  written  or  oral  agreement  or
understanding with Mr. Kaplan or SKMC regarding his services or participation in
connection  with future  mergers or  acquisitions.  Mr.  Kaplan's  firm had been
retained  solely to provide  clerical and  bookkeeping  services.  If Mr. Kaplan
becomes  aware of a merger or  acquisition  possibility  he may or may not refer
such possibility to the Company's  management for  consideration.  If Mr. Kaplan
becomes  aware of a merger  or  acquisition  possibility  and  refers  it to the
Company, the Company's management will review such merger or


                                       19
<PAGE>


acquisition  possibility  in the same  manner  and with the same  efforts  as it
reviews merger and  acquisition  possibilities  referred to it by other persons.
The  Company  may agree to pay a finder's  fee to any  non-management  "finder",
including Mr. Kaplan,  in connection  with an  acquisition  or merger.  Although
there is no current intent,  agreement,  understanding  or expectation to do so,
there exists the  possibility  that the Company may ultimately  acquire or merge
with a business or property in which Mr. Kaplan or his  affiliates or associates
have a beneficial interest. There is no business or property in which Mr. Kaplan
or his  affiliates  or  associates  have a  beneficial  interest  which is under
consideration by the Company as a potential acquisition or merger candidate.

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

         (a)      Exhibits.

                  3(i)         Certificate of Incorporation -
                               incorporated by referenced to
                               Exhibit 3.1 of Registrant's
                               Registration Statement on
                               Form S-18
                               (SEC File No. 33-37534-NY)

                  3(ii)        By-Laws - incorporated by
                               reference to Exhibit 3.2
                               of Registrant's Registration
                               Statement  on Form S-18
                               (SEC File No. 33-37534-NY)

                  27           Financial Data Schedule

         (b) No reports on Form 8-K were  filed  during the last  quarter of the
period covered by this report.



 
                                       20
<PAGE>



                                   SIGNATURES

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


                                                  WESTECH CAPITAL CORP.
                                            ----------------------------------
                                                      (Registrant)


                                        By  /s/ Neil Ragin
                                            ----------------------------------
                                            Neil Ragin
                                            Principal Executive Officer and
                                            Principal Financial Officer

                                            Date:  September 22, 1997



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



                                            /s/ Neil Ragin
                                            ----------------------------------
                                            Neil Ragin
                                            Director

                                            Date:  September 22, 1997



                                            /s/ Michael J. Tannenholtz
                                            ----------------------------------
                                            Michael J. Tannenholtz
                                            Director

                                            Date:  September 22, 1997



                                            /s/ William Esh
                                            ----------------------------------
                                            William Esh
                                            Director

                                            Date:  September 22, 1997



                                       21
<PAGE>


     Supplemental  Information  to be Furnished  With Reports Filed  Pursuant to
Section 15(d) of the Exchange Act By Non-reporting Issuers

     (1) No annual report to security  holders  covering the  registrant's  last
fiscal year; and

     (2) No proxy statement,  form of proxy or other proxy soliciting,  material
has been sent to more than ten of the registrant's security holders with respect
to any annual or other meeting of security holders.




                                       22