SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             -----------------------

                                   FORM 10-KSB

                  ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the Fiscal Year Ended December 31, 1996

                        Commission file number 33-19196-A
                                   ----------

                            STRATEGIC VENTURES, INC.
             (Exact name of registrant as specified in its charter)

               Florida                             59-2919648
 (State or other jurisdiction                      (I.R.S. Employer
 of incorporation or organization)                 Identification No.)

  3816 West Linebaugh Avenue, Ste. 408, Tampa, Florida  33624
  -------------------------------------------------------------
 (Address  of  principal   executive offices)      (Zip Code)

Registrant's telephone number, including area code:(813) 960-0557

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 the  filing
requirements for at least the past 90 days.   Yes    No X
                                                ---    ---

Indicate by check mark if disclosure  of  delinquent  filers in Response to Item
405 of Regulation S-B is not contained in this form,  and no disclosure  will be
contained  to  the  best  of  Registrant's  knowledge  in  definitive  proxy  or
information  statements incorporate by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.      Yes    No X
                                             ---    ---

As of December 31, 1996, 4,000,000 shares of common stock were outstanding.  The
aggregate  market  value  of the  Stock  held  by  non-affiliates  of  Strategic
Ventures, Inc. was approximately $0 at December 31, 1996.

Transitional Small Business Disclosure Format:  Yes      No  X
                                                    ---      ---

Documents incorporated by reference: None.

                     This form 10-KSB consists of 12 pages.


<PAGE>

                                     Part I


Item 1.  Business.

        Strategic  Ventures,  Inc.,  ("the  Company") a Florida  corporation was
organized in March, 1987, as Sci Tech Ventures, Inc., and successfully completed
its initial public  offering in August,  1989.  The term "Company"  includes the
registrant and its  subsidiaries,  unless the context indicates  otherwise.  The
Company raised $109,000 through the sale of 109 units consisting of Ten Thousand
shares of par value $.0001 Common Stock,  and Ten Thousand Common Stock Purchase
Warrants to purchase an  additional  Ten  Thousand  shares of Common  Stock at a
price of $.50 and One Zero Coupon U.S. Treasury-Backed Obligation ("USTBO") with
a maturity value of $1,000. The warrants expired in October 1992.


        The Company changed its name to Strategic Ventures, Inc. in May, 1991.

        The Company was formed to engage in the  identification,  evaluation and
investigation of prospective  business acquisition  candidates,  and if believed
warranted,  the  acquisition  of one or more  selected  businesses,  ventures or
enterprises.

Activities
----------

        During 1996, the Company's business  activities  involved the search for
investment   opportunities   in   diverse   industries   such   as   specialized
pharmaceutical products manufacturer,  entertainment and recreational businesses
among others.

        The Company  investigated  several acquisition  candidates during fiscal
1996, but did not pursue a merger  agreement  after  completion of due diligence
reviews by the Company's  management team. The Company  continues to investigate
potential  acquisitions  on an ongoing  basis with a view  towards  meeting  the
listing requirements for NASDAQ.

                                       2

<PAGE>


Regulation and Taxation
-----------------------

        Any securities which the Company issues in exchange for the Common Stock
of a target  acquisitions will be "restricted  securities" within the meaning of
the Securities Act of 1933 (the "1933 Act"). If the target stockholders  elected
to resell such  securities,  such sale could not proceed  unless a  registration
statement had been declared effective by the Securities and Exchange  Commission
or an exemption from registration was available. As a condition to any merger or
acquisition,  it is  possible  that  target  company's  management  may  request
registration  of the Company's  Common  Shares to be received by target  company
shareholders.  In such  event,  the  Company  could  incur  significant  related
expenses  however,  management  would likely  require the target company to bear
most, if not all, of the cost of any such registration.

        The  Company  intends to  structure  a merger or  acquisition  in such a
manner as to minimize federal and state tax consequences for the Company and any
target company.

Competition
-----------

        The Company  continues  to view itself as an  insignificant  participant
among  the  other  firms   which   engage  in  mergers   and   acquisitions   of
privately-financed  concerns. Other competitive firms may have greater financial
and personnel resources and technical expertise than the Company.

Employees and Consultants
-------------------------

        The    Company    presently    has   no    employees,    although    its
President/Treasurer,  Thomas L. McCrimmon and Vice President/Secretary,  Bertram
E. Cutler  continue to serve on an as needed basis.  These officers  devote such
time as necessary to the business  affairs of the Company.  The Company may also
engage,  from time to time, the services of outside  consultants to assist it in
the evaluation of prospective target companies and other management matters.

        Neither Mr. McCrimmon nor Mr. Cutler receive salaries, however, they are
reimbursed for their expenses  incurred in their services as officers.  There is
no provision for any  additional  bonuses or benefits.  The Company  anticipates
that in the  near  future  it may  enter  into  employment  agreements  with its
officers. Although Directors do not receive compensation for their services they
may be reimbursed for expenses incurred in attending Board meetings.

        The  Company  has  authorized  100,000,000  shares of common  stock at
$0.0001  par  value.  There are  4,000,000  shares of common  stock  issued  and
outstanding as of December 31, 1996.

                                       3

<PAGE>

Item 2. Properties

        The  Company  maintains  it's  corporate  office at 3816 West  Linebaugh
Avenue,  Suite 408, Tampa,  Florida 33624 under an informal arrangement with the
Company's President. This space is deemed adequate for the foreseeable future.

Item 3. Legal Proceedings

        The Company is not a party to any pending legal proceedings.

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

        No matters have been submitted to a vote of security holders.

                                     PART II

Item 5. Market Common Equity and Related Stockholder Matters.

        The  outstanding  registered  securities of Strategic  Ventures,  Inc.
were not traded in any  quotation  medium  maintained by members of the National
Association of Securities Dealers, Inc. during the year 1996.

                                    Common Stock                 Common Stock
1996                                Bid High                     Bid Low
--------------------------------------------------------------------------------

1st Quarter                         $       0                    $      0
2nd Quarter                         $       0                    $      0
3rd Quarter                         $       0                    $      0
4th Quarter                         $       0                    $      0


                                    Common Stock                 Common Stock
1995                                Bid High                     Bid Low
--------------------------------------------------------------------------------

1st Quarter                         $       0                    $      0
2nd Quarter                         $       0                    $      0
3rd Quarter                         $       0                    $      0
4th Quarter                         $       0                    $      0

        Since the closing of the Company's Initial Public Offering the Company's
shares traded over the counter by market makers for a period in 1989 - 90. Share
prices have not been quoted since then.  Quotations,  when made,  represent only
prices  between  dealers  and  do  not  include  retail  markups,  markdowns  or
commissions and accordingly, may not represent actual transactions.  The Company
estimates that as of December 31, 1996, there are approximately 402 stockholders
holding shares in their name and an unknown number of shares held in the name of
securities broker/dealers.

                                       4

<PAGE>

        No  dividends  have been  declared or paid by the Company and  presently
intends to retain all future  earnings,  if any,  to finance the  expansion  and
development of its business.

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

Financial Condition
-------------------

        During fiscal year 1996, the Company continued to be a development stage
entity and had no sales or revenues.

Liquidity and Capital Assets.
-----------------------------

        The Company's  primary source of liquidity since inception has been from
funds raised from its initial public stock offering which were fully expended in
1991. During fiscal 1996, cash requirements have been minimal due to the minimal
present level of operations.  The Company anticipates it will rely in part, upon
the operating  profits of its  principal  subsidiary  activities,  to contribute
toward its day to day working capital needs.

        The  Company's  cash  and cash on  deposit  position  remained  at $0 at
December 31, 1995 and as of December 31, 1996.  The Company  anticipates  it may
obtain  additional  equity  capital  through the  placement of shares of capital
stock on a private  basis to suitable  and  sophisticated  investors to fund any
further  operations.  No assurance can be given that further  resources  will be
accessible to the Company on favorable terms or at all.

Results of Operations - 1996 as Compared to 1995
------------------------------------------------

        Expenses during 1996 consisted of accounting expenses and miscellaneous.
The Company  anticipates  operating  costs will continue  during the next fiscal
year due to acquisition investigation costs and company maintenance expenses. As
of December  31,  1996,  the Company  has no  material  commitments  for capital
expenditures.

        The Company has no ongoing operations, no assets, and no income.

        In 1996 the company  incurred a total of $1,874 in operating  expenses
and in 1995 had  incurred  $1,360 in  operating  expenses.  The  company  had no
revenue in 1996 and no revenue in 1995.

        The Company lost  ($1,874) on operations in 1996 as opposed to a loss of
($1,360) on operations in 1995.

                                       5

<PAGE>

Results of Operations - 1995 as Compared to 1994
------------------------------------------------

        In 1995 the company  incurred a total of $1,360 in operating  expenses
and in 1994 had  incurred  $1,910 in  operating  expenses.  The  company  had no
revenue in 1995 and no revenue in 1994.

        The Company lost  ($1,360) on operations in 1995 as opposed to a loss of
($1,910) on operations in 1994.

Item 7.  Financial Statements and Supplemental Data.

         See attached Financial Statements F-1 through F-11


Item 8.  Disagreements on Accounting and Financial Disclosure.

        In  connection  with  audits  of two most  recent  fiscal  years and any
interim period preceding  resignation,  no  disagreements  exist with any former
accountant  on any  matter of  accounting  principles  or  practices,  financial
statement disclosure, or auditing scope of procedure, which disagreements if not
resolved to the  satisfaction of the former  accountant would have caused him to
make  reference  in  connection  with his  report to the  subject  matter of the
disagreement(s).

        The principal  accountants'  reports on the financial statements for any
of the past two years  contained no adverse  opinion or a disclaimer  of opinion
nor was  qualified as to  uncertainty,  audit scope,  or  accounting  principles
except for the "going concern" qualification.



                                    PART III

Item 9.  Directors and Executive Officers of the Registrant.

Name                              Age                   Position Held
----                              ---                   -------------

Thomas L. McCrimmon               53                    President/Treasurer
                                                        Director

Bertram E. Cutler                 70                    Vice President/Secretary
                                                        Director

Thomas L. McCrimmon (age 53) President,  Treasurer and Director.  Mr.  McCrimmon
-------------------
has served the Company since its  inception in march,  1987.  Mr.  McCrimmon has
been involved in merger and acquisition work,  S.E.C. and management  consulting
to private and public  companies from 1976 through 1983 as the founder and owner
of Bay Business  Consultants  a business  brokerage  and  consulting  firm.  Mr.

                                       6

<PAGE>

McCrimmon has been the President and founder of Florida Hi-Tech  Capital,  Inc.,
Tampa Florida a privately held financial  management  consulting firm since 1984
to present.  From 1988 - April 2, 1990 Mr.  McCrimmon  was  President of Paragon
Acquisitions Group, Inc. a public company which acquired 100% interest in Sun Up
Foods, Inc., Benton, Kentucky a processor of citrus juice concentrate for resale
to dairies  nationwide.  Mr.  McCrimmon  was President  (1988 - March,  1991) of
Baystar Capital, Inc. a public shell company which merged with American Clinical
Laboratories, Tampa, FL.


Bertram E. Cutler (age 70) Vice  President,  Secretary and Director.  Mr. Cutler
-----------------
has served the  Company  since March 1987.  Mr.  Cutler  devotes as much time as
necessary to the business of the Company and assists Mr. McCrimmon in the day to
day  operations  of the Company,  ongoing  negotiations  with regard to proposed
mergers and other management  matters.  Mr. Cutler is a licensed insurance agent
and from 1985 to  present  has  served as  President  of  C.D.R.I.,  Inc. a firm
specializing in marketing  programs of the securities and insurance  industries.
Previously,  Mr. Cutler was  co-founder  and a consultant to Career  Development
Corporation,  an executive  search firm with offices in Atlanta and  Washington,
D.C. (1972-1985).

Directors  of the  Company  hold  office  until the next  annual  meeting of the
shareholders and until their successors have been elected and qualified.

Officers  of the  Company  are  elected by the Board of  Directors  at the first
meeting after each annual  meeting of the Company  shareholders  and hold office
until their death, or until they shall resign or have been removed from office.

Item 10.  Executive Compensation.

        No officer  receives any salary,  however,  they may be  reimbursed  for
their expenses  incurred in their service to the Company.  There is no provision
for any  additional  benefits or  additional  bonuses,  however,  bonuses may be
granted to any or all  officers  at the  discretion  of the Board of  Directors.
Although  Directors do not receive  compensation for their services as Directors
as such,  Directors may be reimbursed for expenses  incurred in attending  Board
meetings.

                                       7

<PAGE>


                           SUMMARY COMPENSATION TABLE OF EXECUTIVES

                        Annual Compensation              Awards

Name and    Year    Salary    Bonus     Other Annual  Restricted  Securities
Principal             ($)      ($)      Compensation  Stock       Underlying
Position                                   ($)        Award(s)    Options/SARS
                                                      ($)         (#)

Thomas     1994     0         0          0             0           0
McCrimmon,
President
           ---------------------------------------------------------------------
           1995     0         0          0             0           0
           ---------------------------------------------------------------------
           1996     0         0          0             0           0
================================================================================
Bart       1994     0         0          0             0           0
Cutler,
Secretary
           ---------------------------------------------------------------------
           1995     0         0          0             0           0
           ---------------------------------------------------------------------
           1996     0         0          0             0           0

           Option/SAR Grants Table (None)

           Aggregated Option/SAR Exercises in Last Fiscal Year an FY-End Option/
SAR value (None)

           Long Term Incentive Plans - Awards in Last Fiscal Year (None)

                   DIRECTOR COMPENSATION FOR LAST FISCAL YEAR
                   ------------------------------------------


(Except for  compensation of officers who are also Directors which  Compensation
is listed in Summary Compensation Table of Executives)

                         Cash Compensation                    Security Grants

Name                   Annual     Meeting    Consulting  Number of  Number of
                       Retainer   Fees ($)   Fees/Other  Shares (#) Securities
                       Fees ($)              Fees  ($)              Underlying
                                                                    Options/SARS
                                                                    (#)

A.  Director           0          0          0           0          0
Thomas McCrimmon

B.  Director           0          0          0           0          0
Bert Cutler

                                       8

<PAGE>

Item 11. Security Ownership of Management and Others.

        The  following  tabulates  holdings  of Common  Shares of the  Strategic
Ventures,  Inc. as of the date of this Report,  held of record by all Directors,
Officers  and  Shareholders  holding  5%  or  more  of  the  outstanding  shares
individually and as a group.

Name and Address             Amount of Beneficial      Percent of Class
of Beneficial owner          Ownership
-----------------------------------------------------------------------

Thomas L. McCrimmon               1,660,000               41.5%
3816 West Linebaugh #408
Tampa, FL  33624

Bertram Cutler (1)                  485,000               12.1%
3816 West Linebaugh #408
Tampa, FL  33624

Lucille Kluzinski                   250,000                6.6%
c/o 6520 Government Dr.
Suite One
New Port Richey, FL  34654

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

All Officers and Directors        2,395,000               59.8%
as a Group (2 Persons)

(1) Includes 40,000 shares held by Mr.  Cutler's  children over which Mr. Cutler
has sole voting and investment power.

        Family Relationships
        --------------------

        There are no family  relationships  among any of the company's  officers
and directors.

        Involvement in Certain Legal Proceedings
        ----------------------------------------

        During the past five years there have been no filing of petitions  under
the federal  bankruptcy  laws, or any state  insolvency  laws, by or against any
partnership  in which any  director or  executive  officer of  Registrant  was a
general partner or executive  officer at the time or within two years before the
time of such a filing.

        No director or executive officer of Registrant has, during the past five
years,  been  convicted in a criminal  proceeding  or is the named  subject of a
pending  criminal  proceeding  (excluding  traffic  violations  and other  minor
offenses).

                                       9

<PAGE>

        During  the  past  five  years  no  director  or  executive  officer  of
Registrant  has  been  the  subject  of  any  order,  judgment  or  decree,  not
subsequently   reversed,   suspended  or  vacated  by  any  court  of  competent
jurisdiction  permanently or temporarily enjoining him from or otherwise limited
in his involvement in any type of business, securities or banking activities.

        During  the  past  five  years  no  director  or  executive  officer  of
Registrant  has  been  found  by a court of  competent  jurisdiction  in a civil
action, nor by the Securities and Exchange  Commission nor the Commodity Futures
Trading  Commission  to  have  violated  any  federal  or  state  securities  or
commodities law, which judgment or finding has not been  subsequently  reversed,
suspended or vacated.

        Compliance with Section 16(a) of the Exchange Act.
        --------------------------------------------------

        Section  16(a) of the  Securities  Exchange  Act of 1934 (the  "Exchange
Act") requires the Company's directors and officers and any persons who own more
than  ten  percent  of the  Company's  equity  securities,  to file  reports  of
ownership and changes in ownership with the  Securities and Exchange  Commission
(the "SEC").  Directors,  officers and greater than ten-percent shareholders are
required by SEC  regulation  to furnish  the Company  with copies of all Section
16(a) report files.

The  company  believes  that during the period from  December  31, 1995  through
December 31, 1996, there were no filing requirements applicable to its officers,
directors  and  greater-than-ten-percent   shareholders  due  to  the  Company's
non-reporting status.

Item 12.  Certain Relationships and Related Transactions.

        In December of 1993, the Company canceled 500,000 shares of common stock
issued to a former director for services. The Company canceled the shares due to
the fact that the  director  did not fulfill the duties and render the  services
for  which  the  Company  had  compensated  that  director.  The  Company  is in
possession  of the shares and has issued a stop  transfer  order.  However,  the
shares  have not been  duly  endorsed.  The  Company  does not  expect to have a
problem in completing the  cancellation of the shares.  For financial  statement
purposes, the shares have been treated as being canceled.

        Notes Payable
        -------------

        The Company's  president  personally  assumed virtually all of the notes
payable of the Company.  These notes amounted to $147,552.  The remaining  notes
payable of $20,000 and $5,000 were  converted to common shares which were issued
to the note holders.

                                       10

<PAGE>


                                     PART IV

Item 13.       Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) The  following  exhibits  and  financial  statement  schedules  are filed as
exhibits to this Report:

1. Financial Statements of the Registrant are included under Item 8 hereof.

2. Financial Statement Schedules - None

3. Exhibits:

Exhibit #             Description                  Location
-----------------------------------------------------------

3(a)           Articles of Incorporation    *Exhibits to Registration
                                                  Statement filed by
                                                  Registrant on Form S-18

3(b)           Bylaws of Registrant         *Exhibits to Registration
                                                  Statement filed by
                                                  Registrant on Form S-18

4(a)           Form of Stock Certificate    *Exhibits filed as part of
                                                  Registration  Statement of
                                                  Registrant filed on Form S-18

4(b)           Form of Warrant Certificate  *Exhibits filed as part of
                                                  Registration Statement
                                                  of Registrant filed on
                                                  Form S-18

10             None                                None

22             Subsidiary Companies                None

*  Incorporated by reference to Registration Statement #33-19196A.

(b) Reports of Form 8-K.  There were no reports on Form 8-K for the twelve month
period ended December, 1996.

(c) Proxy  Statements.  There were no proxy statements or annual reports sent to
stockholders during the period covered herein.

                                       11

<PAGE>


                                   SIGNATURES


               Pursuant  to the  requirements  of  Section  13 or  15(d)  of the
Securities  Exchange Act of 1934,  the Registrant has duly caused this report to
be signed on its behalf by the undersigned,  thereunto duly  authorized,  in the
city   of   Tampa,    State   of   Florida   on   this    15th    day   of
January, 1999.


                                    Strategic Ventures, Inc.


                                    by:/S/Thomas L. McCrimmon, President
                                          Thomas L. McCrimmon, President


               Pursuant  to the  requirements  of  Section  13 or  15(d)  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.


Signature                                   Title                Date
---------                                   -----                ----


/s/Thomas L. McCrimmon                      President
   Thomas L. McCrimmon                      Treasurer
                                            Chief Financial
                                            Officer, Director



/s/Bertram E Cutler                         Vice President
   Bertram E. Cutler                        Secretary, Director

                                       12

<PAGE>

                           STRATEGIC VENTURES, INC.
                         (a development stage company)

                              FINANCIAL STATEMENTS
                           December 31, 1997 and 1996

<PAGE>

 ALESSANDRI & ALESSANDRI, PA

 INDEPENDENT AUDITORS'REPORT

 Strategic Ventures, Inc.
 Tampa, Florida

        We have audited the accompanying balance sheets of Strategic Ventures,
Inc. (a  development  stage  company) as of December 31, 1997 and 1996,  and the
related statements of operations,  stockholders'  equity, and cash flows for the
three  years  ended  December  31,  1997,  and for the  cumulative  period  from
inception (March 19, 1987) to December 31, 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 Strategic Ventures,
 Inc. as of December 31, 1997 and 1996,  and the results of its  operations  and
 its  cash  flows  for the  three  years  ended  December  31,  1997 and for the
 cumulative  period from  inception (March 19,1987) to December  31,  1997  in
 conformity  with generally accepted accounting principles.

        During the aforementioned periods Strategic Ventures,  Inc., ("Company")
 has not conducted  operations,  nor does it have any products or services.  The
 notes (Note 1) to the  financial  statements  of the Company  describe that the
 Company was formed for the purpose of making an offering of securities  (common
 stock and warrants) to the public. Management used the proceeds from the public
 offering to seek interests in one or more businesses which management  believed
 would result in a profit to the Company.  As of November  1998, a business had
 not been acquired, and additional external financing may be required.


          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  incurred a net loss of $ 2 ,742 during the year ended
 December 31, 1997, and as of that date had a negative net worth of $2,220.  The
 Company  is not  aware  of any  alternate  sources  of  capital  to  meet  its'
 obligations.  These  conditions  raise  substantial  doubt about the  Company's
 ability to acquire an interest in a business, and its' ability to continue as a
 going concern.  The financial  statements do not include any  adjustments  that
 might result from the outcome of this uncertainty.

 November 30, 1998

                            ACCOUNTANTS & CONSULTANTS
              5121 EHRLICH ROAD Suite 106 - B Tampa, Florida 33624
                       (813) 969-1995 - FAX (813) 960-2740
           Member: American Institute of Certified Public Accountants
               /Division of CPA Firms - Member Ronda Institute of
                          Certified Public Accountants

<PAGE>


                            STRATEGIC VENTURES, INC.
                          (a development stage company)
                                 BALANCE SHEETS

                                     ASSETS



                                                  December 31,      December 31,
                                                    1997               1996
                                                    -----------------------
  Total Assets                                      None               None
                                                    =======================



                       LIABILITIES & STOCKHOLDERS' EQUITY


 Current Liabilities
  Accounts payable                                $   2,220           $   2,504
                                                   -----------------------------
   Total liabilities                                  2,220               2,504
                                                   -----------------------------

 Stockholders' Equity

Preferred Stock - 25,000,000 shares
                   authorized; $.Ol par
                    value; non-designated;
                     none issued

Stockholders' Equity:
 Common stock - $.0001 par value;
                 100,000,000 shares
                  authorized; shares
                   issued and outstanding
                    4,000,000 in 1997 and 1996          400                 400

  Paid-in capital                                   310,920             307,894
  Retained Earnings (Deficit)                      (313,540)           (310,798)
                                                   -----------------------------
   Total Stockholders' Equity                        (2,220)             (2,504)
                                                   -----------------------------
Total Liabilities & Stockholder's Equity          $0                  $0
                                                   =============================


                       See Notes to Financial Statements


<PAGE>
<TABLE>
<CAPTION>

                            STRATEGIC VENTURES, INC.
                          (a development stage company)
                             STATEMENT OF OPERATIONS
               For the period from inception ( March 19, 1987) to
                     December 31, 1997, and the years ended
                        December 31, 1997, 1996, and 1995
<S>                           <C>         <C>          <C>            <C>
                                                               Cumulative from
                                             Year Ended        Date of inception
                                             December 31,      to December 31
                                    1997        1996       1995      1997
                              --------------------------------------------------
 REVENUES:                          None        None       None      None
                              --------------------------------------------------
 OPERATING EXPENSES:

 Acquisition Investigation                                            $ 200,779
 Office Rent & Telephone                                                 15,197
 Legal  & Accounting          $     950   $       750  $       880       14,431
 Licenses & Filing Fees                                                   3,513
 Office Supplies                                                          6,437
 Advertising                                                                278
 Consulting                                                              16,750
 Travel & Entertainment                                                   8,198
 Depreciation                                                               542
 Transfer Agent                    1,792        1,054          330        5,366
 Miscellaneous                                                 150        7,593
                              --------------------------------------------------
 Total Operating Expenses          2,742        1,804        1,360      279,084
                              --------------------------------------------------

OTHER (INCOME) EXPENSE:
Interest Income                                                          (4,813)
Interest Expense                                   70                    39,169
                              --------------------------------------------------
 Total Other (Income) Expense          0           70            0       34,356
                              --------------------------------------------------
NET LOSS & DEFICIT
ACCUMULATED DURING
THE DEVELOPMENT STAGE
BEFORE OTHER ITEMS                (2,742)      (1,874)      (1,360)    (313,440)

EQUITY IN EARNINGS (LOSS)
OF INVESTMENT .                                               (250)

GAIN ON SALE OF INVESTMENT                                                  150
                              --------------------------------------------------
NET LOSS & DEFICIT ACCUMULATED
DURING THE
DEVELOPMENT STAGE             $   (2,742) $    (1,874) $    (1,360)   $(313,540)
                             ===================================================
 NET LOSS PER SHARE           $    0.000  $     0.000  $     0.000
                             ======================================
 WEIGHTED AVERAGE NUMBER
OF SHARES                      4,000,000    4,000,000    4,000,000
                             ======================================
</TABLE>


                       See Notes to Financial Statements.


<PAGE>
<TABLE>
<CAPTION>
                            STRATEGIC VENTURES, INC.
                          (a development stage company)
                        STATEMENTS OF STOCKHOLDERS'EQUITY
                 For the period since inception (March 19, 1987)
                              to December 31, 1997


<S>                              <C>            <C>      <C>          <C>

                                    Common stock          Paid- in
                                 Shares         $         Capital        Deficit
                                 -----------------------------------------------

Proceeds from
 Issuance of Stock                 250,000      $ 25     $  4,900

Issuance of
 Common Shares                     750,000        75
                                 -----------------------------------------------
Balance, December
 31, 1987                        1,000,000       100        4,900

Net Income (Loss)                                                     $  (2,020)
                                 -----------------------------------------------
Balance, December
 31, 1988                        1,000,000       100        4,900        (2,020)

Proceeds from
 Issuance of Stock               1,090,000       109       59,420

Net Income (Loss)                                                       (13,582)
                                 -----------------------------------------------
Balance, December
 31, 1989                        2,090,000       209       64,320       (15,602)

Issuance of Common
 Stock for Services                 70,000         7          243

Net Income (Loss)                                                       (20,891)
                                 -----------------------------------------------
Balance, December
 31, 1990                        2,160,000       216       64,563       (36,493)

Issuance of Common
 Stock for Services                700,000        70        7,850

Cancellation of
 Common Shares                    (100,000)      (10)         (10)

Net Income (Loss)                                                      (222,513)
                                 -----------------------------------------------
Balance, December
 31, 1991                        2,760,000       276       72,403      (259,006)

Issuance of Common
 Stock for Services                750,000        75        2,750

Net Income (Loss)                                                       (27,194)
                                 -----------------------------------------------
Balance, December
 31, 1992                        3,510,000       351       75,153      (286,200)

Issuance of Common
 Stock for Services                700,000        70        2,590

Issuance of Common
 Stock for Note Payments            70,000         7       24,993

Cancellation of
 Common Shares                    (500,000)      (50)

Assumption of Notes
 Payable by Related Party                                 201,826

Net Income (Loss)                                                       (19,454)
                                 -----------------------------------------------
Balance, December
 31, 1993                        3,780,000       378      304,562      (305,654)

Income from Common
 Shares for Services               220,000        22          803

Contribution to Capital                                       769

Net Income (Loss)                                                        (1,910)
                                 -----------------------------------------------
Balance, December
 31, 1994                        4,000,000       400      306,134      (307,564)

Net Income (Loss)                                                        (1,360)
                                 -----------------------------------------------
Balance, December
 31, 1995                        4,000,000       400      306,134

Contribution to Capital                                     1,760

Net Income (Loss)                                                        (1,874)
                                 -----------------------------------------------
Balance, December
 31, 1996                        4,000,000       400      307,894      (310,798)

Contribution to Capital                                     3,026

Net Income (Loss)                                                        (2,742)
                                 -----------------------------------------------
Balance, December
 31, 1997                        4,000,000      $400     $310,920     $(313,540)
                                 ===============================================

                       See Notes to Financial Statements.

</TABLE>



<PAGE>
<TABLE>
<CAPTION>




                            STRATEGIC VENTURES, INC.
                          (a development stage company)
                             STATEMENT OF CASH FLOWS
                For the period from inception (March 19, 1987) to
                     December 31, 1997, and the years ended
                        December 31, 1997, 1996, and 1995



                                              Cumulative from
  Years Ended                                  date of inception
  December 31,                                to December 31,
 1997     1996       1995                          1997



<S>                                     <C>       <C>       <C>       <C>



 Cash Flows from (to) Operations:

 Net loss                               $(2,742)  $(1,874)  $(1,360)  $(313,540)

 Adjustments to Reconcile Net
  Income to Net Cash
 Provided by Operating
  Activities - Depreciation                                                 541

 Increase (Decrease) In:
 Investment                                                                 250
 Accounts Receivable                                                      1,732
 Accounts Payable & Accruals               (284)      114     1,360     (12,283)
                                        ----------------------------------------
 Net Cash From (To)
  Operating Activities                   (3,026)   (1,760)        0    (323,300)
                                        ----------------------------------------
 CASH FLOWS FROM (TO)
 INVESTING ACTIVITIES:

 Purchase of Equipment                                                     (541)
 Loans to Affiliates                                                     (1,732)
 Purchase of Stock                                                         (250)
 Assumption of Notes Payable                                           (147,552)
                                        ----------------------------------------
 Net Cash From (To)
  Investing Activities                        0         0         0    (150,075)
                                        ----------------------------------------

 CASH FLOWS FROM (TO)
 FINANCING ACTIVITIES:

Proceeds from Issuance of
 Common Stock (net of
  offering costs)                                                        75,504
Proceeds from Stockholder &
 Related Party Notes Payable                                            174,055
Principal Payments on Stockholder & Related
  Party Notes                                                           (12,000)
Conversion & Assumption of
 Notes Payable to Common Stock                                          229,436
Contribution to Capital                   3,026     1,760                 6,380
                                        ----------------------------------------
 Net Cash From (To)
  Financing Activities:                   3,026     1,760         0     473,375
                                        ----------------------------------------
 INCREASE (DECREASE): CASH &
 CASH EQUIVALENTS                             0         0         0           0

 CASH & CASH EQUIVALENTS,
  December 31,1996                            0         0         0           0
                                        ----------------------------------------
 CASH & CASH EQUIVALENTS,
  December 31,1997                      $     0   $     0   $     0   $       0


 Supplemental Disclosures of
  Cash Flow Information:

 Interest Expense for 1996                      $    70



</TABLE>
 Supplemental Schedule of NonCash Investing & Financing Activities:

 During 1993, a major  shareholder  assumed all of the  outstanding  debt of the
 Company, totaling approximately $202,000. Other shareholders accepted shares of
 the Company's  common stock in payment of amounts owed to diem,  which amounted
 to approximately  $25,000.  Although these items represent noncash items, their
 affect is reflected in the cumulative column above for analysis purposes.

                       See Notes to Financial Statements.


<PAGE>


                            STRATEGIC VENTURES, INC.
                          (a development stage company)
                          NOTES TO FINANCIAL STATEMENTS

 NOTE I ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

 ORGANIZATION - Strategic Ventures,  Inc. ("Company") was organized as a Florida
 corporation on March 19, 1987. A statement of income (loss) is presented.
 However,  the Company has had no operating  revenues and expenses, except
 expenses for acquisition investigation administration.

 Presently,  the Company is in the development stage, and activities include the
 arranging of an offering of common stock and warrants to the public,  which was
 accomplished  in 1989.  The  Company  intends to acquire  interests  in various
 business  opportunities,  which in the  opinion of  management  will  provide a
 profit to the Company.  Presently,  the Company has had no operations,  planned
 products,  or services,  and additional  external  financing may be required to
 acquire the business interests.

 DEFERRED  SECURITIES  OFFERING  EXPENSES - The Company incurred $5,709 of costs
 directly related to its public offering. Such amount was offset in 1989 against
 the proceeds from the public offering.

 CASH FLOWS - For the purposes of cash flows,  the Company  considers all highly
 liquid debt instruments purchased with a maturity of three months or less to be
 cash equivalents.

 EARNINGS (LOSS) PER SHARE - Earnings (loss) per share are based on the weighted
 average number of common shares outstanding during the period starting from the
 date of  inception.  All insider  stock issued is deemed to have been issued on
 that date for all periods presented.

 INCOME TAXES - The provision  (benefit)  for income taxes,  if any, is based on
 the pre-tax earnings (loss) reported in the financial statements,  adjusted for
 transactions that may never enter into the computation of income taxes payable.
 A deferred tax  liability or asset is recognized  for the estimated  future tax
 effect  attributable to temporary  differences in the recognition of income and
 expenses for financial statement and income tax purposes.

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

 NOTE 2 PUBLIC OFFERING

 The Company  offered 250 units to the public at an offering price of $1,000 per
 unit. Each unit consisted of 10,000 shares of the Company's  common stock,  and
 10,000 warrants, each entitling the warrant holder to purchase one share of the
 Company's  common stock at $0.50 each, and a U.S.  Treasury-backed  Zero Coupon
 Obligation.  Each U.S. Treasury-backed Zero Coupon Obligation will be purchased
 from the


<PAGE>


 offering  proceeds  at an  estimated  cost of $200  by the  underwriter  of the
 proposed public offering, in the name of the unit holder. The offering was on a
 best efforts basis and resulted in the issuance of 1,090,000 common shares.

 NOTE 3 INCOME TAXES

 The Company has incurred losses to date and as a result no provision for income
 taxes has been made.

 On  December  31,  1997 the Company  had  $313,540  of  accumulated  loss carry
 forwards.  In addition,  the Company had  deferred tax assets of  approximately
 $111,000  as a result  of the loss  carryforwards,  against  which a  valuation
 allowance of $111,000 has been recognized due to the  uncertainty  with respect
 to  recoverability of the deferred tax asset. Due to the absence of operations,
 certain  portions of the  accumulated net operating loss may not be immediately
 deductible.

 The net operating losses expire as shown below.

 2003   $ 2,020              2008   $19,454
 2004   $ 13,582             2009   $ 1,910
 2005   $ 20,891             2010   $ 1,360
 2006   $222,516             2011   $ 1,871
 2007   $ 27,194             2012   $ 2,742

 NOTE 4 RELATED PARTY TRANSACTIONS:

 The Company uses certain office space,  telephones,  and related  facilities of
 its president under an informal arrangement.

 NOTE 5 PREFERRED AND COMMON STOCK

 PREFERRED STOCK

 The Company has authorized  25,000,000  shares of preferred  stock at $0.01 par
 value. The stock is non-designated and none of the shares has been issued.

 COMMONSTOCK

 The Company has  authorized  100,000,000  shares of common stock at $0.0001 par
 value.  There are 4,000,000 shares of common stock issued and outstanding as of
 December 31, 1997.