<PAGE>


                   U. S. Securities and Exchange Commission
                             Washington, DC 20549

                                 Form 10-K SB/A

[X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
         EXCHANGE ACT OF 1934 (FEE REQUIRED)
                    For the fiscal year ended June 30, 1997

                        Commission file number 0-17293

                               DSSI Corporation
      -------------------------------------------------------------------
                (Name of small business issuer in its charter)

       Pennsylvania                                            22-2795073
-------------------------------                           -------------------
(State or other jurisdiction of                            (I.R.S. Employer   
incorporation or organization)                            Identification No.)

                     P. O. Box 1570 West Chester, PA 19380
         ------------------------------------------------------------
              (Address of principal executive offices) (Zip Code)

                   Issuer's telephone number (610) 696-3479
                                             --------------

Securities registered under Section 12(b) of the Exchange Act:         None

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

                         Common Stock, $0.01 par value
                    --------------------------------------
                               (Title of class)

         Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes   X   No      .
    -----    -----
         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.  [  ]

The issuer's revenues for the fiscal year ended June 30, 1997 were $1,907,687.

         The aggregate market value at September 5, 1997 of shares of the
Common Stock held by non-affiliates was $1,966,168 based upon the bid price of
the Issuer's Common Stock as reported by the National Association of
Securities Dealers in the OTC Bulletin Board. Solely for the purpose of this
calculation, shares held by certain principal shareholders named in Item 11
hereof, as well as shares held by directors and officers of the Issuer, have
been excluded. Such exclusion should not be deemed a determination or an
admission by the issuer that such shareholders or individuals are, in fact,
affiliates of the issuer.

         On September 5, 1997, there were 4,446,017 shares of the issuer's
Common Stock, $0.01 par value, outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                     None

<PAGE>

                               DSSI Corporation
                                  FORM 10-KSB
                        Fiscal Year Ended June 30, 1997

                               TABLE OF CONTENTS

                                                                          Page
                                    PART I

Item 1       Description of Business                                           3
                                                                             
Item 2       Description of Property                                           5
                                                                             
Item 3       Legal Proceedings                                                 5
                                                                             
Item 4       Submission of Matters to a Vote of Security Holders               5
                                                                             
                                    PART II                                  
                                                                             
Item 5       Market for Common Equity and Related Stockholder Matters          6
                                                                             
Item 6       Management's Discussion and Analysis or Plan of Operations        7
                                                                             
Item 7       Financial Statements                                              9
                                                                             
Item 8       Changes in and Disagreements with Accountants on Accounting      22
             and Financial Disclosures                                       
                                                                             
                                   PART III                                  
                                                                             
Item 9       Directors, Executive Officers, Promoters and Control Persons;    22
             Compliance with Section 16(a) of the Exchange Act               
                                                                             
Item 10      Executive Compensation                                           24
                                                                             
Item 11      Security Ownership of Certain Beneficial Owners and Management   26
                                                                             
Item 12      Certain Relationships and Related Transactions                   28
                                                                             
                                    PART IV                                  
                                                                             
Item 13      Exhibits, List and Reports on Form 8-K                           29
                                                                             
Signatures                                                                    33



                                      2

<PAGE>


                                    PART 1

ITEM 1   Description of Business

General

         DSSI Corporation (the "Company"), which was named Drug Screening
Systems, Inc. until the sale of its business effective June 16, 1997 (see
below), was organized under the laws of the Commonwealth of Pennsylvania on
March 17, 1987 under the name of Analytical Innovations, Inc. On December 29,
1987, the Company adopted the name of Drug Screening Systems, Inc. The
Company's principal executive offices are at P. O. Box 1570, West Chester, Pa
and its telephone number is (610) 696-4314.

         The Company began the development of its former product line in
August 1989. To the date of sale hereinafter described, the Company had
developed and marketed tests for cocaine, opiates (heroin, morphine and
codeine), methamphetamines, THC (marijuana), barbiturates, PCP
(phencyclidine), amphetamines and benzodiazepines. The Company marketed its
tests under the names MACH IV(R) Screen and microLINE(R) Screen (collectively,
the "Products").

         The Products were sold for "Medical Uses" (e.g., in vitro diagnostic
use by physicians and hospitals) and "Non-Medical Uses" (e.g., pre-employment
screening and screening by correctional and criminal justice agencies). The
Company's major distributor was Borg Warner Information Systems ("BWIS") which
accounted for approximately one half of the Company's revenues.

         As a result of the net losses aggregating $15,070,555 from inception
through March 31, 1997, the Company's cash flows from operating activities had
been negative. Accordingly, the Company had been required to finance its
operations and research and development program primarily through proceeds
received from its initial public offering in May 1988, the exercise of
warrants thereafter and subsequent securities offerings, including the sale of
shares of the Company's Common Stock, $0.01 par value (the "Common Stock"),
through a rights offering in June and July, 1993. The directors and other
beneficial owners have financed the Company's cash requirements since November
1994 through two private placements which resulted in aggregate gross proceeds
of $825,000 and subsequent secured loans in principal amounts totaling
$245,000 at March 31, 1997. Total equity raised by the Company since inception
is $15,113,015.

         The Board had been seeking a potential sale or merger of the Company
for the past several years. In the summer and early fall of 1994 the Board
replaced the then existing management with two officers who were tasked to
find a suitable strategic partner or purchaser. In November of 1994, the
directors and certain other individuals invested $375,000 in the first of two
private placements to fund the Company during the search. The Company offered
750,000 shares at $0.50 per share. By February of 1995, after discussions with
a number of candidates who were found by networking activities of the officers
and directors, two offers were received. The Board authorized the officers to
permit a privately held bioscience company to conduct its due diligence review
of the Company and for the officers to conduct a due diligence review of the
prospective purchaser. Due diligence reviews were in their final phases in
August of 1995 when business conditions unrelated to the Company forced the
potential buyer to withdraw from the discussions. The offer which was pursued
offered approximately 17% of the outstanding shares of the privately held
bioscience company to the Company and the second offer was for a payout of a
percentage of future profits which the Board rejected upon receipt. The search
reverted to the initial stage of networking discussions and blind advertising
for potential acquirers. The search was suspended and a second private
placement of $450,000 was raised from the directors and certain other
individuals in the first quarter of 1996 when talks with Allegiance Healthcare
Corporation ("Allegiance") formerly named Baxter Healthcare Corporation for a
possible distribution agreement looked favorable. The Company offered
1,800,000 shares at $0.25 per share in such private placement.

The Company entered into a distribution agreement with Allegiance in 1996, a
copy of which agreement is filed (by incorporation by reference) as an exhibit
to this Report and is incorporated herein by this reference, for Allegiance to
distribute the Company's Products in the hospital and clinical market
throughout the United States. Despite the Company's efforts, the sales
relating to the Allegiance agreement ran significantly behind forecast. The
sales to Allegiance totaled only $185,000 from inception of the contract
through March 31, 1997. Accordingly, during the fall of 1996, the Board of
Directors resumed its efforts to find a buyer for the Company via networking
with industry contacts and blind advertising.


                                      3
<PAGE>

         During February 1997, the Company received four offers to acquire the
Company's business. The Board reviewed the offers, considering such factors as
the amount of the consideration to be received by the Company, the form of the
payment (i.e., cash or securities), the timing of the payment and the
purchaser's apparent ability to pay. Based on this review the Board
unanimously approved the sale of substantially all of the assets to Casco
Standards, Inc. ("Casco"). Effective June 16, 1997, Casco acquired the
Company's inventory, capital equipment (except for leasehold improvements) and
intellectual property. Casco also acquired the right to do business as Drug
Screening Systems, Inc. Casco agreed to pay $1,950,000 (to be adjusted for net
asset fluctuation from December 31, 1996) plus a payment of $ 174,454 for an
agreed-upon inventory build-up of the products. Sybron International
Corporation ("Sybron"), Casco's ultimate parent, reported revenues of $674.5
million and net income of $57.6 million for its fiscal year ended September
30, 1996. Casco did not purchase the accounts receivable of the Company. As
part of the agreement, Casco agreed to use its best efforts at collecting cash
receipts for the Company and will treat the history of paying the Company as
part of the customer's credit history. Management believed that the Company's
accounts receivables were adequately reserved, but reviewed the question as
part of its year-end close. As a condition of the Purchase & Sale Agreement
dated as of March 14, 1997 (the "Casco Agreement"), a copy of which agreement
is filed (by incorporation by reference) as an exhibit to this Report and is
incorporated herein by this reference, the Company manufactured specific
quantities of finished goods to have a six-month supply on hand for Casco.
Casco compensated the Company at the Company's standard costs for the
inventory build-up.


         In April 1994, the Company, under the previous management, entered
into an exclusive license and distributorship agreement with AccuScreen Labs,
Inc. ("AccuScreen"), a copy of which agreement is filed (by incorporation by
reference) as an exhibit to this Report and is incorporated herein by this
reference). The Company granted AccuScreen the license to sell or distribute
the Company's drug screening panel to direct marketing purchasers or to
retailers in the United States. The license was for a term of five years and
six months from the date permission from the Food and Drug Administration (the
"FDA") to market the tests to direct marketing purchasers or to retailers was
obtained. AccuScreen had invested funds in the efforts to prepare for the
appropriate filings with the FDA, but, as of June 16, 1997, had not submitted
a filing. Casco determined that it did not want to accept the assignment of
the AccuScreen agreement and discussions among Casco, AccuScreen and the
Company resulted in a termination agreement whereby the Company paid
AccuScreen the sum of $600,000 upon closing of the Casco purchase. In the
financial statements for the fiscal year ended June 30, 1997 ("Fiscal 1997"),
the termination fee paid to AccuScreen is reflected as a charge to earnings
and is reflected in the Company's accumulated deficit. Casco increased its
original offer price by $350,000 to partially offset the effect of this
payment.

         At June 30, 1997, after the AccuScreen payment, settlement of some of
the then existing liabilities and closing costs, the Company had $305,559 in
liabilities, cash of $801,979, plus the collection of accounts receivable
(which, as indicated above, were not part of the assets sold to Casco and
which were $53,073 as of June 30, 1997), the collection of the holdback of
$160,000 as part of the Casco purchase and the incurrence of expenses relating
to a company registered under Section12(g) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), including completion of the audit for
Fiscal 1997. From July 1, 1997 to August 31, 1997, the Company had collected
$51,629 of accounts receivable with $1,414 still to be collected.

         As indicated in the Proxy Statement relating to the shareholders'
meeting on June 16, 1997, the Board has continued the Company subsequent to
the closing with Casco as a shell corporation, while seeking a potential
business to enhance shareholder value. On August 18, 1997, the Company entered
into an agreement to sell a controlling interest to Michael J. Blumenfeld who
intends to have the Company enter into the business of manufacturing and
distributing sports equipment to the institutional markets. The transaction
with Mr. Blumenfeld is subject to shareholder approval, which will be sought
by proxy material filed pursuant to Registration 14A under the Exchange Act.


                                      4


<PAGE>

Employees

         As of September 13, 1997, the Company employed an officer on a part
time basis to maintain its federal securities, tax and other required
regulatory filings.


ITEM 2    Description of Property

         The Company leased 12,000 square feet at Units 603, 604 and 605 VPR
Commerce Center, 1001 Lower Landing Road, Blackwood, New Jersey 08012, which
it utilized as administrative, research and development, manufacturing,
quality control, warehousing and shipping facilities. The space allocated for
research and development included a laboratory with analytical
instrumentation. The leases, with an unaffiliated landlord, were extended for
60 days and expired on June 30, 1997. The aggregate base monthly rental was
$4,712. The Company currently conducts its business from the residence of its
Chief Financial Officer and its address is P.O. Box 1570, West Chester, PA
19380


ITEM 3    Legal Proceedings

None

ITEM 4   Submission of Matters to a Vote of Security Holders

         (a) The Company held its Annual Meeting of Shareholders on June 16,
1997.

         (b) Jeff Davidowitz, John Pappajohn and Stephen C. Turner, all of
whom were directors, were elected at the Annual Meeting. There were no other
directors whose term of office continued after the meeting.

         (c) At the Annual meeting, the other matter submitted to a vote and
the vote therefor were:

         On the proposal to ratify the appointment by the Board of Directors
of the Company of Deloitte & Touche LLP as auditors of the Company for the
fiscal year which commenced on July 1, 1996, FOR: 3,754,793, AGAINST: 3,037
ABSTAINED: 490.

         On the proposal to sell the business of the Company and the majority
of the assets to Casco, FOR: 2,860,720, AGAINST: 6,260, ABSTAINED: 4,610

         On the proposal to authorize the name change of the Company from Drug
Screening Systems, Inc. to DSSI Corporation, FOR: 3,716,754, AGAINST: 3,381,
ABSTAINED: 880.

The vote on the directors was:

        Director                  FOR                        WITHHELD
        --------                  ---                        --------

        Jeff Davidowitz           3,752,665                   5,655
        John Poppajohn            3,752,665                   5,655
        Stephen C. Turner         3,702,635                  55,685

         (d) There was no contested solicitation and, accordingly, no
settlement with any participant.

                                      5
<PAGE>



                                    PART II

ITEM 5   Market for the Common Stock and Related Stockholder Matters

Market

         The following table sets forth, for the periods indicated, the
quarterly range of the high and low bid prices of the Common Stock as reported
by the National Association of Securities Dealers, Inc. (the "NASD") in the
OTC Bulletin Board:

                                                          Bid Prices(1)
                                                          -------------
Fiscal 1997 Quarter Ended                            Low                High
-------------------------                            ---                ----

September 30, 1996                                   $ 0.25              $0.75
December 31, 1996                                      0.125              0.50
March 31, 1997                                         0.063              0.328
June 30, 1997                                          0.094              0.172

Fiscal 1996 Quarter Ended                            Low                High
-------------------------                            ---                ----

September 30, 1995                                    $ 0.37             $ 0.81
December 31, 1995                                       0.14                .37
March 31, 1996                                          0.19               1.50
June 30, 1996                                            .69               1.56


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

(1) The foregoing quotations reflect inter-dealer prices, without mark-up,
    mark-down or commissions, and may not represent actual transactions.

         The high bid and low asked prices of the Common Stock as reported by
the NASD in the OTC Bulletin Board on September 5, 1997 were $ 1.266 and
$1.141 per share, respectively.


Holders

         The number of holders of record of the Common Stock at September 5,
1997 was 281. Management of the Company is of the opinion that, based on the
number of copies of proxy statements requested by brokers, banks and other
record holders for beneficial owners in connection with the June 16, 1997
Special Meeting of Shareholders, there are over 2,300 beneficial owners.

Dividends

         The Company did not declare or pay cash or stock dividends on the
Common Stock during Fiscal 1997 or the fiscal year ended June 30, 1996
("Fiscal 1996"). Due to current and anticipated cash requirements as a result
of the Stock Purchase Agreement and the subsequent entrance into the business
of manufacturing and distributing sports equipment (more fully explained in
Item 1 to this report) the Board of Directors does not anticipate the payment
of cash dividends in the near future.

                                      6
<PAGE>


ITEM 6   Management's Discussion and Analysis or Plan of Operations

          The following management's discussion and analysis for Fiscal 1997
and Fiscal 1996 should be read in conjunction with the Financial Statements
included in Item 7 to this Report. In the opinion of management, the following
discussion and analysis of operations is no longer relevant due to the
cessation of operations as a result of the sale to Casco of the Company's
business and a majority of its assets (See Item 1 to this Report). The
information is presented for historical purposes and compliance with reporting
requirements.


Results of Operations
---------------------

Fiscal 1996 versus Fiscal 1997
------------------------------

Revenues - The Company's sales for Fiscal 1997 decreased $264,623 (12.2%) to
$1,907,687 from $2,172,310 in Fiscal 1996. The Company's sales for Fiscal 1997
were in the range of management's expectations. The major reason for the
decrease in sales was because the Company resupplied the maximum amount under
its arrangement with BWIS during Fiscal 1996. During fiscal 1997, the Company,
according to the Casco Agreement could no longer resupply the BWIS inventory
from the time of the agreement to the closing. In addition, sales were only
for eleven and one half months rather than a full year because the closing
date for the sale to Casco was June 16,1997.

The Company's gross profit of $963,660 for Fiscal 1997 amounted to 60.9%
($1,100,348 and 70.7%, respectively, in Fiscal 1996) of its operating
expenses. At the gross profit percentage for Fiscal 1997, the Company would
have had to generate approximately $3,130,000 in sales to cover such operating
expenses ($3,064,000 in Fiscal 1996).

Cost of sales and gross profits - The Company's cost of sales for Fiscal 1997
was $944,027 and its gross profit percentage was 50.5% ($1,071,962 and 50.7%,
respectively, for Fiscal 1996). The slight decrease in the gross profit as a
percent of sales was insignificant.

Research and Development - The Company decreased expenditures for research and
development. In Fiscal 1997, the Company expended $345,410 on research and
development as compared to $392,698 in Fiscal 1996. The decrease of $47,288
resulted principally from reductions in headcount in anticipation of the sale
of the business.

Selling, General and Administrative Expenses - Selling, general and
administrative expenses increased $76,434 (6.6%) to $1,235,872 in Fiscal 1997
from $1,159,438 in Fiscal 1996. This increase resulted primarily because of
cost relating to the professional services required to complete the sale to
Casco.

Net Income (Loss) - The Fiscal 1997 net income of $41,821 was $493,609
(109.3%) more than the net loss of $451,788 in Fiscal 1996. This increase is
attributable to the profit on the sale to Casco of the business and a majority
of the assets, offset by the AccuScreen settlement and the reasons cited
above.

Fiscal 1995 versus Fiscal 1996

Revenues - The Company's sales for Fiscal 1996 decreased $532,741 (19.7%) to
$2,172,310 from $2,705,051 in the fiscal year ended June 30, 1995 ("Fiscal
1995"). The Company's sales for Fiscal 1996 were in the range of management's
expectations. The major reason for the decrease in sales was because the
Company had manufactured the maximum amount under its arrangement with BWIS
during Fiscal 1995. During Fiscal 1996, the Company could no longer build for
stock owned by BWIS, but was limited to replacing Product as it was used. This
difference accounted for the vast majority of the decline in sales.


                                      7



<PAGE>

The Company's gross profit of $1,100,348 for Fiscal 1996 amounted to 70.7%
($1,387,502 and 82.2%, respectively, in Fiscal 1995) of its operating
expenses. At the gross profit percentage for Fiscal 1996, the Company would
have had to generate approximately $2,283,000 in sales to cover such operating
expenses ($3,291,000 in Fiscal 1995).

Cost of sales and gross profits - The Company's cost of sales for Fiscal 1996
was $1,071,962 and its gross profit percentage was 50.7% ($1,317,549 and
51.3%, respectively, for Fiscal 1995). The slight increase in the gross profit
as a percent of sales resulted from more corporate sales and less government
bid sales.

Research and Development - The Company increased expenditures in the research
and development. In Fiscal 1996, the Company expended $392,698 on research and
development as compared to $361,978 in Fiscal 1995. The increase of $30,720
resulted principally from the development efforts on the eight-panel plate
designed for Allegiance's fourth quarter launch of the Products in the
hospital market.

Selling, General and Administrative Expenses - Selling, general and
administrative expenses declined $162,572 (12.3%) to $1,163,737 in Fiscal 1996
from $1,326,309 in Fiscal 1995. This decrease resulted primarily because
Fiscal 1995 cost reductions were realized for the entire year of Fiscal 1996.

Net Loss - The Fiscal 1996 net loss of $451,788 was $156,432 (53.0%) more than
the net loss of $295,356 in Fiscal 1995. This decrease is attributable to the
reasons cited above.



Inflation
---------

Inflation has not had a material impact on the Company's operations during
Fiscal 1997 and 1996.


New Accounting Pronouncements
-----------------------------

In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long Lived Assets and for Long-Lived
Assets to be Disposed Of" (SFAS 121). This statement established accounting
standards for the impairment of long-lived assets, certain identifiable
intangibles and goodwill related to those assets to be held and used and for
long-lived assets and certain identifiable intangibles to be disposed of. SFAS
No. 121 requires that long-lived assets to be held and used by the Company be
reviewed for impairment whenever events or circumstances indicate that the
carrying amount of an asset may not be recoverable. An impairment is
recognized to the extent that the sum of undiscounted estimated future cash
flows expected to result from the assets used is less than the carrying value.
The Company adopted this standard during the first quarter of Fiscal 1997. The
adoption of this standard did not have a material effect on the Company's
financial position or results of operations as then conducted. The recognition
and measurement of impairment losses for long-lived assets under the new
standard was consistent with the Company's past practices.
   
Effective July 1, 1996, the Company adopted Statement of Financial Accounting
Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation,"
which requires expanded disclosures of stock-based compensation arrangements
with employees. SFAS 123 encourages, but does not require, compensation costs
to be measured based on the fair value of the equity instrument awarded. It
allows the Company to continue to measure compensation cost for these plans
using the intrinsic value based method of accounting prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25"). The Company has elected to continue to recognize compensation cost
based on the intrinsic value of the equity instrument awarded as promulgated
in APB 25. The effect on pro forma net income and pro forma earnings per share
would be immaterial if compensation costs were measured based on the fair
value of the equity instrument awarded and therefore the disclosure of these
amounts has been omitted. The fair value of the options granted during the
year ended June 30, 1997 was estimated on the date of grant using the
Black-Scholes option-pricing model with the following assumptions used:
risk-free interest rate of 6.38%, expected volatility of 300% and expected
life of 5 years.
    


                                      8
<PAGE>


Liquidity and Capital Resources
-------------------------------

 The Company had working capital at June 30, 1997 of $751,537 and a cash
balance of $801,979 due to the sale of the majority of its assets and business
to Casco. The Company feels it will collect its net receivables and recoup the
other smaller assets on the Balance Sheet, i.e., deposits and prepaids.

Commitments
-----------

There were no material commitments for capital expenditures at June 30, 1997.




ITEM 7   Financial Statements

Index to Financial Statements                                         Page
-----------------------------                                         ----

Independent Auditors' Report                                            10

Balance Sheets as of June 30, 1997 and 1996                             11

Statements of Operations for the years ended June 30, 1997 and 1996     12

Statements of Changes in Stockholders' Equity for the
         years ended June 30, 1997 and1996                              13

Statements of Cash Flows for the years ended June 30, 1997 and 1996     14

Notes to Financial Statements                                           15







                                      9
<PAGE>


Independent Auditors' Report

To the Stockholders and Board of Directors
DSSI Corporation
Blackwood, New Jersey

         We have audited the accompanying balance sheets of DSSI Corporation
(formerly Drug Screening Systems, Inc.) as of June 30, 1997 and 1996, and the
related statements of operations, changes in stockholders' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on the 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, such financial statements present fairly, in all
material respects, the financial position of DSSI Corporation as of June 30,
1997 and 1996, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.

         As described in Note A to the Financial Statements, on June 16, 1997,
the Company sold its business and the majority of its assets to Casco
Standards, Inc.


/s/ DELOITTE & TOUCHE LLP
---------------------------
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
September 23, 1997


<PAGE>



DRUG SCREENING SYSTEMS, INC.
 Balance Sheets, June 30, 1997 and 1996
<TABLE>
<CAPTION>


                                                                           1997             1996
                                                                           ----             ----
<S>                                                                   <C>             <C>
Assets
Current Assets:
  Cash  and cash equivalents                                           $    801,979    $     91,807

  Accounts receivable, net of allowance of $60,000 at June  30, 1997
   and $50,000 at June 30, 1996                                              53,073         222,262
 Receivable from purchase holdback                                          160,000            --
  Inventory                                                                                 445,229
  Prepaid expenses and other                                                 42,044          63,120
                                                                       ------------    ------------
Total Current Assets                                                      1,057,096         822,418

Equipment and improvements, net                                               1,506         283,726

Other Assets:
  Deposits                                                                    8,585          12,104
  Patents                                                                      --            25,792
                                                                       ------------    ------------
Total Assets                                                           $  1,067,187    $  1,144,040
                                                                       ============    ============



Liabilities and Stockholders' Equity
Current Liabilities:
  Current maturities of long-term debt and capital leases              $    233,213    $    109,117
  Accounts payable and accrued expenses                                      72,346         348,116
  Customer advances and prepayments                                                          17,000
                                                                       ------------    ------------
     Total Current  Liabilities                                             305,559         474,233

Commitments and contingencies                                                  --              --

Stockholders' Equity
  Class "A" preferred stock, $0.01 par value; 2,000
     shares authorized; none issued                                            --              --

  Common stock, $0.01 par value; 20,000,000
     shares authorized; 4,446,017 shares at June 30,1997 and
      4,246,017 shares at June 30, 1996 issued and outstanding               44,460          42,460
  Additional paid-in-capital                                             15,118,555      15,070,555
  Accumulated deficit                                                   (14,401,387)    (14,443,208)
                                                                       ------------    ------------
     Total Stockholders' Equity                                             761,628         669,807
                                                                       ------------    ------------

Total Liabilities and Stockholders' Equity                             $  1,067,187    $  1,144,040
                                                                       ============    ============

</TABLE>





 See notes to financial statements

                                      11
<PAGE>

 DSSI Corporation
 Statements of Operations for the Years Ended June 30, 1997 and 1996




                                             1997          1996
                                             ----          ----

Revenues                                  1,907,687    $ 2,172,310
Cost of sales                               944,027      1,071,962
                                        -----------    -----------
Gross profit                                963,660      1,100,348

Operating expenses:
  Research and development                  345,410        392,698
  Selling, general and administrative     1,235,872      1,159,438
                                        -----------    -----------
                                          1,581,282      1,552,136
                                        -----------    -----------
Loss from operations                       (617,622)      (451,788)

Gain on sale of assets                    1,259,443             --
Settlement fee                             (600,000)            --
                                        -----------    -----------

Net income (loss)                       $    41,821    $  (451,788)
                                        ===========    ===========

Net income (loss) per share             $      0.01    $     (0.15)
                                        ===========    ===========

Weighted average number of shares
  outstanding                             4,246,000      3,096,000
                                        ===========    ===========














 See notes to financial statements



                                      12
<PAGE>



DSSI Corporation
Statements of Changes in Stockholders' Equity
For the Years Ended June 30, 1997 and 1996



<TABLE>
<CAPTION>



                                          Common Stock           Additional
                                        ------------------        Paid-in       Accumulated
                                    Shares           Amount       Capital         Deficit         Total
                                    ------           ------       -------         -------         -----

<S>                              <C>             <C>            <C>            <C>             <C>         
Balance, June 30, 1995           $  2,446,017    $     24,460   $ 14,638,555   $(13,991,420)   $    671,595

Sale of common stock through a
  private offering                  1,800,000          18,000        432,000                        450,000


Net loss                                                                           (451,788)       (451,788)
                                 --------------------------------------------------------------------------

 Balance, June 30, 1996             4,246,017          42,460     15,070,555    (14,443,208)        669,807

Sale of common stock through a
  private offering                    200,000           2,000         48,000                         50,000

Net income
                                                                                     41,821          41,821
                                 --------------------------------------------------------------------------

Balance, June 30, 1997           $  4,446,017    $     44,460   $ 15,118,555   $(14,401,387)   $    761,628
                                 ==========================================================================


</TABLE>






See notes to financial statements











                                      13



<PAGE>


DSSI Corporation
Statements of Cash Flows for the Years Ended June 30, 1997 and 1996
<TABLE>
<CAPTION>


                                                                         1997           1996
                                                                         ----           ----
<S>                                                                  <C>            <C>       
Cash flows from operating activities:
      Net income (loss)                                              $    41,821    $  (451,788)
      Adjustments to reconcile net income (loss) to net cash  used
           Depreciation and amortization                                  56,733         89,620
           Impairment of capital equipment                                  --          212,050
           Net gain on sale of assets                                 (1,259,443)        (2,800)
           Decrease (increase) in assets net of effects from
            sale of assets to  Casco:
                Accounts receivable                                      169,189        (97,287)
                Inventory                                                (76,754)       (65,893)
                Prepaid expenses and other                                 4,201            192
           Decrease in liabilities:
                Accounts payable and accrued expenses                   (275,770)      (197,709)
                Customer prepayments and advances                        (17,000)       (46,523)
                                                                     -----------    -----------
Net cash used in operating activities                                 (1,357,023)      (560,138)

Cash flows from investing activities:
      Proceeds from sale of assets to Casco                            1,908,635           --
      Proceeds from sale of equipment net of expenses                       --            2,800
      Expenditures for equipment and improvements                        (19,055)       (21,696)
      Decrease in (recovery of) deposits                                   3,519         (2,707)
                                                                     -----------    -----------
Net cash provided (used) in investing activities                       1,893,099        (21,603)

Cash flows from financing activities:
      Net proceeds from issuance of common stock                          50,000        450,000
      Proceeds from non-bank financing                                   515,073         95,150
      Principal payments on debt and capital leases                     (390,977)      (176,710)
                                                                     -----------    -----------
Net cash provided by financing activities                                174,096        368,440
                                                                     -----------    -----------
Net increase (decrease) in cash and cash equivalents                     710,172       (213,301)

Cash and cash equivalents:
      Beginning of period                                                 91,807        305,108
                                                                     -----------    -----------
      End of period                                                  $   801,979    $    91,807
                                                                     ===========    ===========


Supplemental disclosure of cash flow information:
      Cash paid during the period for interest                       $     2,066    $     2,058
                                                                     ===========    ===========

</TABLE>



See notes to financial statements



                                      14
<PAGE>

DSSI Corporation
Notes to Financial Statements
Years Ended June 30, 1997 and 1996


A        Business, Financing and Basis of Financial Statement Preparation

         DSSI Corporation (the "Company"), which was named Drug Screening
Systems, Inc. until the sale of its business effective June 16, 1997 (see
below) was organized under the laws of the Commonwealth of Pennsylvania on
March 17, 1987 under the name of Analytical Innovations, Inc. On December 29,
1987, the Company adopted the name of Drug Screening Systems, Inc

         The Company began the development of its former product line in
August 1989. To the date of sale hereinafter described, the Company had
developed and marketed tests for cocaine, opiates (heroin, morphine and
codeine), methamphetamines, THC (marijuana), barbiturates, PCP
(phencyclidine), amphetamines and benzodiazepines. The Company marketed its
tests under the names MACH IV(R) Screen and microLINE(R) Screen (collectively,
the "Products").

         The Products were sold for "Medical Uses" (e.g., in vitro diagnostic
use by physicians and hospitals) and "Non-Medical Uses" (e.g., pre-employment
screening and screening by correctional and criminal justice agencies). The
Company's major distributor was Borg Warner Information Systems ("BWIS") which
accounted for approximately one half of the Company's revenues.

         As a result of the net losses aggregating $15,070,555 from inception
through March 31, 1997, the Company's cash flows from operating activities had
been negative. Accordingly, the Company has been required to finance its
operations and research and development program primarily through proceeds
received from its initial public offering in May 1988, the exercise of
warrants thereafter and subsequent securities offerings, including the sale of
shares of the Common Stock through a rights offering in June and July, 1993.
The directors and other beneficial owners have financed the Company since
November 1994 with two private placements which resulted in aggregate gross
proceeds of $825,000 and subsequent secured loans in principal amounts
totaling $245,000 at March 31, 1997. Total equity raised by the Company since
inception is $15,113,015.

         The Board had been seeking a potential sale or merger for the past
several years. In the summer and early fall of 1994 the Board replaced the
then existing management with two officers who were tasked to find a suitable
strategic partner or purchaser. In November of 1994, the directors and certain
other individuals invested $375,000 in the first of two private placements to
fund the Company during the search. The Company offered 750,000 shares at
$0.50 per share. By February of 1995, after discussions with a number of
candidates who were found by networking activities of the officers and
directors, two offers were received. The Board authorized the officers to
permit a privately held bioscience company to conduct its due diligence review
of the Company and for the officers to conduct a due diligence review of the
prospective purchaser. Due diligence reviews were in their final phases in
August of 1995 when business conditions unrelated to the Company forced the
potential buyer to withdraw from the discussions. The offer which was pursued
offered approximately 17% of the outstanding shares of the privately held
bioscience company to the Company and the second offer was for a payout of a
percentage of future profits which the Board rejected upon receipt. The search
reverted to the initial stage of networking discussions and blind advertising
for potential acquirers. The search was suspended and a second private
placement of $450,000 was raised from the directors and certain other
individuals in the first quarter of 1996 when talks with Allegiance Healthcare
Corporation ("Allegiance"), formerly named Baxter Healthcare Corporation for a
possible distribution agreement looked favorable. The Company offered
1,800,000 shares at $0.25 per share in such private placement.

         The Company entered into a distribution agreement with Allegiance in
March 1996 for Allegiance to distribute the Products in the hospital and
clinical market throughout the United States. Despite the Company's efforts,
the sales relating to the Allegiance agreement ran significantly behind
forecast. The sales to Allegiance totaled only $185,000 from inception of the
contract through March 31, 1997. Accordingly, during the fall of 1996, the
Board of Directors resumed its efforts to find a buyer for the Company via
networking with industry contacts and blind advertising.

                                      15


<PAGE>

         During February 1997, the Company received four offers to acquire the
Company's business. The Board reviewed the offers, considering such factors as
the amount of the consideration to be received by the Company, the form of the
payment (i.e., cash or securities), the timing of the payment and the
purchaser's apparent ability to pay. Based on this review the Board
unanimously approved the sale of substantially all of the assets to Casco
Standards, Inc. ("Casco"). Effective June 16, 1997, Casco acquired the
Company's inventory, capital equipment (except for leasehold improvements) and
intellectual property. Casco also acquired the right to do business as Drug
Screening Systems, Inc. Casco paid $1,908,635 plus a payment for an
agreed-upon inventory build-up of the products. Sybron International
Corporation ("Sybron"), Casco's ultimate parent, reported revenues of $674.5
million and net income of $57.6 million for its fiscal year ended September
30, 1996. Casco did not purchase the accounts receivable of the Company. As
part of the agreement, Casco agreed to use its best efforts at collecting cash
receipts for the Company and will treat the history of paying the Company as
part of the customer's credit history. As a condition of the agreement, the
Company manufactured specific quantities of finished goods to have a six-month
supply on hand for Casco. Casco compensated the Company at the Company's
standard costs for the inventory build-up.


         In April 1994, the Company, under the previous management, entered
into an exclusive license and distributorship agreement with AccuScreen Labs,
Inc. ("AccuScreen"). The Company granted AccuScreen the license to sell or
distribute the Company's drug screening panel to direct marketing purchasers
or to retailers in the United States. The license was for a term of five years
and six months from the date permission from the Food and Drug Administration
(the "FDA") to market the tests to direct marketing purchasers or to retailers
was obtained. AccuScreen has invested funds in the efforts to prepare for the
appropriate filings with the FDA, but, as of June 16, 1997, had not submitted
a filing. Casco determined that it did not want to accept the assignment of
the AccuScreen agreement and discussions among Casco, AccuScreen and the
Company resulted in a termination agreement whereby the Company paid
AccuScreen the sum of $600,000 upon closing of the Casco purchase. The
termination fee paid to AccuScreen is reflected as a charge to earnings and is
reflected in the Company's accumulated deficit. Casco increased its offer
price from the originally accepted amount of $1,600,000 by $350,000 to
partially offset the effect of this payment.

         The Board has continued the Company subsequent to the closing with
Casco as a shell corporation, while seeking a potential business to enhance
shareholder value. On August 18, 1997, the Company entered into an agreement
to sell a controlling interest to Michael J. Blumenfeld who intends to have
the Company enter into the business of manufacturing and distributing sports
equipment to the institutional markets. The transaction with Mr. Blumenfeld is
subject to shareholder approval, which will be sought by proxy material filed
pursuant to Registration 14A under the Exchange Act.

B        Summary of Significant Accounting Policies

Cash and Cash Equivalents - All highly liquid debt instruments purchased with
a maturity of three months or less are classified as cash equivalents.

Inventory - Inventories are stated at the lower of cost (first-in, first-out
method) or market.

Revenue Recognition - The Company recognizes revenues at the time Product was
shipped. The Company had an arrangement with a customer (Borg Warner
Information Systems ("BWIS")) whereby title and risk of loss transferred to
the customer upon the transfer of Product from the Company's finished goods
inventory into a segregated refrigeration unit on the Company's premises and,
accordingly, the Company recognized revenue at the time such Product was
transferred. Sales under this arrangement totaled $751,775 during Fiscal 1997
and $1,041,245 during the fiscal year ended June 30, 1996 (`Fiscal 1996"), of
which $0 and $660,000 was in the refrigerated storage unit at June 30, 1997
and 1996, respectively.

                                      16
<PAGE>


Depreciation and Amortization - Depreciation and amortization were computed by
the straight-line method over the estimated useful lives of the respective
assets or the term of the related lease. Estimated useful lives and lease
terms ranged from two to seven years. Depreciation and amortization of
property was $ 56,733 and $89,620 in Fiscal 1997 and 1996, respectively.

Income taxes - Deferred income taxes reflect the net tax effects of (a)
temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax purposes
and (b) operating loss and tax credit carryforwards.

Patents - Patents are amortized over the life of the patent beginning at the
time the patent was obtained. Amortization of patents for Fiscal 1997 and 1996
was $1,438 and $1,500, respectively.

Research and Development Costs - Research and development costs consisted
mainly of salaries and related employee benefits, purchased materials and
services. These costs are charged to operations as incurred.

Restricted Stock Incentive Plan - Shares issued to employees under the plan
are recorded at fair market value at the date of the grant and are amortized
to compensation expense over a two-year vesting period.

Net Income (Loss) Per Share - Net income (loss) per share has been computed
based on the weighted average number of shares outstanding during the year.
Stock options and warrants are considered anti-dilutive and have not been
considered in the computation.

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 at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results may differ from those
estimates and assumptions.

Fair Value of Financial Instruments - The amounts reported in the balance
sheets for cash and accounts receivables and accounts payable approximated
fair value.

Concentration of Credit Risk - The Company was subject to credit risk through
receivables. Credit risk with respect to receivables was minimized due to the
credit worthiness of its then major customer and the large number of smaller
customers, which spread the risk.
   
Asset Impairment - Assets are reviewed for impairment when a specific event
indicats that the carrying value of an asset may not be recoverable and on an
annual basis in conjunction with the preparation of the annual report.
Recoverability is assessed based on estimates of future cash flows expected to
result from the use and eventual disposition of the asset. If the sum of
expected undiscounted cash flows is less than the carrying value of the asset,
an impairment loss is recognized. The impairment loss is measured as the
amount by which the carrying amount of the asset exceeds its estimated fair
value. No impairment loss was required for Fiscal 1997 or 1996.
    


                                      17

<PAGE>









C        Inventory

Inventory at June 30, 1997 and 1996 consisted of the following:

                                            1997                 1996
                                            ----                 ----

Raw Materials                                -                $ 262,858
Work-in-process                              -                  134,911
Finished Goods                               -                   47,460
                                        ------------- ------------------
Total                                        -                $ 445,229
                                        ============= ==================






D        Equipment and Improvements

Equipment and improvements at June 30, 1997 and 1996, which were recorded at
cost, consisted of the following:
                                                  1997                1996
                                                  ----                ----

Furniture and fixtures                               $1,506        $    59,746
Leasehold improvements                                  -              176,299
Machinery and equipment                                 -              666,259
                                              --------------      -------------
                                                                       902,304
Less accumulated depreciation
     and amortization                                   -              618,578
                                              --------------      -------------
                                                    $ 1,506        $   283,726
                                              ==============      =============

E        Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses at June 30, 1997 and 1996 consisted of
the following:

                                                      1997              1996
                                                      ----              ----

Accounts payable - trade                           $ 22,346          $ 257,878
Accrued payroll and related expenses                 50,000             46,728
Other                                               -                   43,510
                                              ==============     ==============
                                                   $ 72,346          $ 348,116
                                              ==============     ==============


F        Related Party Transactions

In February 1993, the Company obtained a non-revolving, multiple drawdown line
of credit from a bank in the amount of $500,000. To enable the Company to
obtain such line of credit, John Pappajohn became a guarantor of the Company's
borrowings under the demand note and pledged a money market account owned by
him in the amount of $500,000, as collateral security for his performance
under the guaranty. The Company had granted to Mr. Pappajohn a security
interest in its tangible and intangible assets (excluding certain equipment
which it is attempting to lease) as collateral in the event the bank called
his guarantee. In consideration of his action as such guarantor and pledging
his money; market account as foresaid, the Company granted Mr. Pappajohn a
warrant expiring February 17, 1998 to purchase 10,000 shares of the Common
|Stock at $10.00 per share. The Company also agreed to grant him a warrant to
purchase up to 8,000 shares of the Common Stock for each $100,000 as and when
drawn by the Company under the line of credit. Each of these warrants would be
exercisable for a period of five years from its respective date of grant at
$10.00 a share. Mr. Pappajohn was also granted registration rights with
respect to the shares of the Common Stock issuable upon exercise of these
warrants. Subsequently, the Company borrowed the $500,000. As a result of this
borrowing, the Company issued to Mr. Pappajohn additional warrants to purchase
40,000 shares of the Common Stock. After giving effect to the anti-dilution
provisions of these warrants, Mr. Pappajohn had received, as consideration for
his guaranty and pledge, warrants to purchase as of June 30, 1997 an aggregate
of 144,681 shares of the Common stock at an exercise price of $3.46 a share.
Such warrants expire in February and March 1998.


                                      18

<PAGE>

Sales to Tepnel Diagnostics, PLC, a United Kingdom company which owns 62,500
shares of the Company's Common Stock was $54,249 and $56,175 in Fiscal years
ended June 30, 1997 and 1996 respectively.

 G       Stockholders' Equity

During Fiscal 1993, the Company granted to the holders of record on May 13,
1993 (the "Record Date") of all of its outstanding shares of the Common Stock
the nontransferable right (the "Rights") to subscribe for Units at $5.00 per
Unit (the "Subscription Price") on the basis of one Unit for every 1.36 shares
of the Common Stock owned on the Record Date. Each Unit consisted of one share
of the Common Stock and a Redeemable Common Stock Purchase Warrant expiring
June 30, 1996 (subsequently extended to December 31, 1996) to purchase one
share of the Common Stock at $5.50 per share. These warrants subsequently
expired on December 31, 1996, except for the related underwriters' warrants
which expire on June 30, 1998. There are 182, 808 of such warrants with an
exercise price of $2.28.

The Company has issued options and warrants to directors, officers, employees
and others as additional incentives for prior and future services.

On September 22, 1994, the Board of Directors ratified the adoption of the
Drug Screening Systems, Inc. Stock Option Plan of 1994 (the "1994 Option
Plan") which provides for the granting of non-qualified stock options to
purchase up to 500,000 shares of the Common Stock, subject to possible
adjustment in the event of stock dividends, stock splits and similar
transactions. Pursuant to the 1994 Option Plan, options may be granted to key
employees, officers, directors, consultants and advisers of the Company and,
if later incorporated, subsidiaries; the options may become exercisable in
installments; the exercise price of an option may not necessarily be at the
fair market value of the Common Stock at its date of grant; the expiration
date of an option may be five to ten years after its date of grant; and there
is a provision permitting exercise if there is a "change in control" (which
definition does not include a transaction approved by the then current
directors). Pursuant to this Plan, options to purchase an aggregate of 270,000
shares of the Common Stock at $0.625 a share were granted on July 29, 1994 and
an option to purchase 25,000 shares at $1.375 a share was granted on September
22, 1994 (the prices per share were the fair market values at the dates of
respective grants). The exercise price of the option issued on September 22,
1994 was subsequently reduced to $0.625 to reflect a drop in the market price.
During its December 1995 meeting, the Board further reduced the exercise price
for options granted to active officers and its consultant to $0.25 to reflect
an additional drop in the market price. These options are exercisable
immediately on the respective date of grant and expire five years from the
respective date of grant regardless of the current status with the Company.
Options to purchase an aggregate of 50,000 shares of Common Stock at $0.25
were granted on June 16,1997

All options and warrants have been issued with exercise prices equivalent to
the market value of




                                      19



<PAGE>
   
the Common Stock at the date of grant except for options granted on June 16,
1997 which were issued at $0.25 and the fair market value at date of grant was
$0.17. There were no options granted during the year ended June 30, 1996. As
of June 30, 1997, options and warrants to purchase 761,029 shares of the
Common Stock were currently exercisable. A summary of the Company's option and
warrant activity for the years ended June 30, 1997 and 1996 follows. The
following table reflects the anti-dilutive provisions of the options and
warrants through August 31, 1997.
    
<TABLE>
<CAPTION>


                          Warrants Issued     Warrants Issued                                              Options
                            in connection        to Directors         Warrants      Key Employees        issued to
                                     with        Officers and        issued to              Stock     Officers and
                          Rights Offering           Employees    Other Parties        Option Plan        Employees
                          ---------------           ---------    -------------        -----------        ---------

<S>                             <C>                 <C>               <C>                <C>              <C>      
Outstanding June 30, 1995       1,929,024           320,563           387,568            10,346           495,781  
                                                                                                      
Options granted                                                                                       
Options and warrants expired                                         (123,357)                           (189,008)
                               ----------        ----------        ----------        ----------        ----------
                                                                                                      
Outstanding June 30, 1996       1,929,024           320,563           267,376            10,346           306,773
                                                                                                      
                                                                                                      
Options granted                                                                                            50,000
Options and warrants expired   (1,746,216)         (175,882)         (178,836)          (10,346)          (11,773)
                               ----------        ----------        ----------        ----------        ----------
                                                                                                      
Outstanding June 30, 1997         182,808           144,681            88,540              --             345,000
                               ==========        ==========        ==========        ==========        ==========
                                                                                                      
                                                                                                      
Exercise price of                                                                                     
outstanding                                                                                           
options and warrants           $     2.28        $     3.46        $     2.46                         $0.25-$0.62
                                                                                                      
</TABLE>
   
Effective July 1, 1996, the Company adopted Statement of Financial Accounting
Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation,"
which requires expanded disclosures of stock-based compensation arrangements
with employees. SFAS 123 encourages, but does not require compensation costs
to be measured based on the fair value of the equity instrument awarded. It
allows the Company to continue to measure compensation cost for these plans
using the intrinsic value based method of accounting prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25"). The Company has elected to continue to recognize compensation cost
based on the intrinsic value of the equity instrument awarded as promulgated
in APB 25. The effect on pro forma net income and pro forma earnings per share
would be immaterial if compensation costs were measured based on the fair
value of the equity instrument awarded and therefore the disclosure of these
amounts has been omitted. The fair value of the options granted during the
year ended June 30, 1997 was estimated on the date of grant using the
Black-Scholes option-pricing model with the following assumptions used:
risk-free interest rate of 6.38%, expected volatility of 300% and expected
life of 5 years.
    
The Company's Board of Directors is expressly authorized, without shareholder
approval, to determine with respect to the Preferred Stock, the preferences,
privileges, voting rights and other characteristics set forth in the articles
of incorporation. There are no shares of Preferred Stock issued and
outstanding.

H        Commitments and Contingencies

The Company leased facilities, which it utilized as its administrative,
research and development manufacturing, quality control, warehousing and
shipping facilities. The leases, as amended, with an unaffiliated landlord,
expired on June 30, 1997. The monthly base rental was $4,712. Rental expenses
under these leases was $75,993 and $78,963 in Fiscal 1997 and 1996,
respectively.






                                      20


<PAGE>



I        Income Taxes and Net Operating Loss Carryforwards

The tax effects of significant items comprising the Company's net deferred
taxes as of June 30, 1997 and 1996 were as follows:

                                                 1997               1996
                                                 ----               ----
Deferred tax assets:
  Property                                   $        -          $     44,000
  Allowance for doubtful accounts                 24,000               20,000
  Vacation  accrual                                   -                 4,000
Operating loss carryforwards                   6,100,000            6,100,000
Valuation allowance                           (6,124,000)          (6,168,000)
                                            =============      ============== 
                                                      -                    -
                                            =============      ============== 




The change in the valuation allowance for Fiscal 1997 was a decrease of
approximately $44,000 as a result of the increase in doubtful accounts for
Fiscal 1997, offset by deductions in the property accounts and the vacation
accrual.

There was no provision for current income taxes for either Fiscal 1997 or
1996.

The federal and state net operating loss carryforwards of approximately
$14,200,000 expire in varying amounts through 2011.

The Company has had numerous transactions in its Common Stock. Such
transactions may have resulted in a change in the Company's ownership as
defined in the Internal Revenue Code Section 382. Such change may result in an
annual limitation on the amount of the Company's taxable income which may be
offset with its net operating loss carryforwards. The Company has not
evaluated the impact of Section 382, if any, on its ability to utilize its net
operation loss carryforwards in future years.

J        Major Customers, Etc.

During Fiscal 1997, sales to BWIS were $751,775 (39% of the gross revenues of
the Company), During Fiscal 1996, sales to BWIS accounted for $1,041,245 (49%
of the gross revenues of the Company). No other customer accounted for 10% or
more of the Company's gross revenues

K        Restrictive Stock Incentive Plan

In February 1990, the Company adopted a Restrictive Stock Incentive Plan,
which allows for issuance of up to 75,000 shares of the Common Stock to
certain key employees. Provisions of the plan require continued employment and
prohibit the sale or transfer of shares issued for two years from the date of
the allocation.

As of June 30, 1997, the Company had issued an aggregate of 41,800 shares of
the Common Stock under such plan; none were issued in Fiscal 1997 or 1996.
These shares were recorded at the fair market value at the date of the stock
allocation. The Company records compensation expense for a period of 24 months
from the date of the stock allocation.
No compensation expense was recognized in Fiscal 1997 or Fiscal 1996.

As of June 30, 1997, 33,200 shares of the Common Stock were reserved for
future issuances under the Restrictive Stock Incentive Plan.


                                      21


<PAGE>

N        Litigation

These is no current litigation involving the Company .

ITEM 8          Changes in and Disagreements with Accountants on Accounting and
                Financial Disclosure

There were none.


                                   PART III

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

Directors

         As of September 1, 1997, the directors of the Company were:
<TABLE>
<CAPTION>

                                                                                   Year First
                                                                                   Became an
Name                        Age     Position with the Company                      Officer
----                        ---     --------------------                           ----------
<S>                         <C>     <C>                                            <C>  
John Pappajohn              69      President of Equity Dynamics, Inc., a          1991
                                    financial consulting and venture capital     
                                    firm                                         
                                                                                 
Stephen C. Turner           52      Chief Executive Officer of Oncor, Inc.,        1991
                                    a manufacturer of genetic medical            
                                    diagnostics                                  
                                                                                 
Jeff  Davidowitz            41      President of Penn Footwear, a company          1994
                                    that manufactures shoes                      
             
</TABLE>
                                                                 
All directors hold office until the next Annual Meeting of Shareholders of the
Company or until their successors have been duly elected and qualified. Each
of the current directors was elected at the Annual Meeting of Shareholders on
June 16, 1997.

Executive Officers

         As of September 1, 1997, the sole executive officer of the Company
was:

<TABLE>
<CAPTION>

                                                                                   Year First
                                                                                   Became an  
Name                        Age     Position with the Company                      Officer
----                        ---     -------------------------                      ----------

<S>                         <C>     <C>                                            <C>                               
Patrick J. Brennan, CPA     52      Vice President, Chief Financial                1994
                                    & Accounting Officer and Secretary             
</TABLE>

         Joseph R. Shaya was hired by the Board on June 1, 1994 as a
consultant to the Company to fulfill the duties of Acting President and Chief
Executive Officer, reporting directly to the Board, until an officer was
engaged to perform such duties as an employee. Mr. Shaya's services were ended
on June 27, 1997 after the successful sale to Casco.


                                      22


<PAGE>

         Each executive officer of the Company will serve until the first
meeting of the Board of Directors following the next Annual Meeting of
Shareholders or until the Board otherwise directs.

Family Relationships

         There are no family relationships among any of the directors or the
sole executive officer of the Company.

Business History

         John Pappajohn, a director of the Company since December 1991, has
been the President of Equity Dynamics, Inc., a financial consulting and
venture capital firm, and the sole owner of Pappajohn Capital Resources, a
venture capital firm, since 1969. Mr. Pappajohn is a member of the Board of
Directors of the following public companies: Pace Health Systems, Inc., a
medical software company; Core Management, Inc. a worker's compensation
software company; United Systems Technology, Inc., a municipal software
company; BioCryst Pharmaceuticals, Inc., a pharmaceutical company; and,
OncorMed, Inc., which is a genetic based cancer screening service.

         Stephen C. Turner, a director of the Company since December 1991, has
been, since August 1983, the Chairman of the Board and Chief Executive Officer
of Oncor, Inc., a public company which manufactures genetic medical
diagnostics, and OncorMed, Inc., a public company which is a genetic based
cancer screening service.

         Jeff Davidowitz, a director of the Company since June 22, 1994, has
been President of Penn Footwear, a private company that manufactures shoes,
since January 1, 1991. Prior to that, he was Vice President of Penn Footwear.

         Patrick J. Brennan, CPA joined the Company on September 27, 1994 as
Vice President, Chief Financial Officer, Chief Accounting Officer and
Secretary. Prior to that, Mr. Brennan was Chief Financial Officer of
Enzymatics, Inc., a Biotech company, from June 1993 until March 1994. Prior to
that, he served as Chief Financial Officer for American Film Technologies,
Inc. ("AFT"), a film coloring and animation company, from August 1988 until
December 1992. In February 1991, Mr. Brennan was elected to the Board of
Directors of AFT. Mr. Brennan continued to serve on the Board after his
resignation as Chief Financial Officer. In October 1993, AFT filed for
bankruptcy under Chapter 11 of the Federal Bankruptcy Code. Mr. Brennan, as
well as most directors, resigned upon the acquisition by a new investor. From
December 1992 to June 1993 and from March 1994 to September 1994, Mr. Brennan
was an independent consultant.

         Messrs. Pappajohn and Turner (as indicated above) are the only
directors to serve as a director of another company which has a security
registered under Section 12(b) or (g) of the Exchange Act. No director serves
as a director of another company which is registered as an investment company
under the Investment Company Act of 1940, as amended.

Compliance with Section 16(a) of the Exchange Act

         Based solely on a review of Forms 3 and 4 furnished to the Company
under Rule 16a-3(e) promulgated under the Exchange Act with respect to Fiscal
1997, the Company is not aware of any director or officer of the Company who
failed to file on a timely basis, as disclosed in such forms, reports required
by Section 16(a) of the Exchange Act during Fiscal 1997 or prior years. The
Company is not aware of any beneficial owner of 10% or more of the outstanding
shares of the Common Stock, which is the only security of the Company
registered under Section 12 of the Exchange Act, other than John Pappajohn who
is a director of the Company. See Item 11 to this Report.

                                      23

<PAGE>

ITEM 10  Executive Compensation

Summary Compensation Table

         The following table sets forth summary compensation information
during Fiscal 1997, Fiscal 1996 and the fiscal year ended June 30, 1995
awarded to, earned by or paid to the Acting Chief Executive Officer during
Fiscal 1997 (until June 27, 1997) and the other executive officer as of June
30, 1997 whose total annual salary and bonuses exceeded $100,000.

<TABLE>
<CAPTION>


                                                Annual Compensation              Long-term
                         Year              ------------------------------       Compensation
      Name and                                                  Other          Awards/Options        All Other
      Principal                                                 Annual             SARS(1)         Compensation
      Position           Year              Salary            Compensation                               $
         (a)             (b)                 (c)                  (d)                (e)             
      ---------          ----              ------            ------------      --------------      -------------
<S>                      <C>               <C>              <C>                <C>                 <C>
Joseph R. Shaya,         1997              180,000               none             25,000               none
Acting President
& CEO                    1996              180,000               none               none               none

                         1995              180,000               none            125,000               none
------------------------------------------------------------------------------------------------------------
Patrick J. Brennan       1997              109,000               none             25,000               None
Vice President,
Chief Financial &        1996              106,917               none               none               None
Accounting Officer,
Secretary                1995               77,600               none             25,000               none

</TABLE>

 (1)     Amounts reflect anti-dilution provisions of options.

         The Company has never granted any stock appreciation rights (SARS).
There were no long-term incentive plan awards granted in Fiscal 1997. There
are no other plans pursuant to which cash or non-cash compensation was paid or
distributed during Fiscal 1996 or 1997 or pursuant to which cash or non-cash
compensation is proposed to be paid or distributed in the future to the
executive officers of the Company in respect to Fiscal 1996 or 1997.

Option/SARS Grants in the Last Fiscal Year.

         There were stock options to purchase an aggregate of 50,000 shares of
the Common Stock granted in Fiscal 1997 as indicated in the following table.
<TABLE>
<CAPTION>


                            Number of         Percent of Total
                           Securities        Options Granted to
                       Underlying Options       Employees in         Exercise Price         Expiration
        Name                 Granted            Fiscal Year             $/Share                Date
---------------------- -------------------- --------------------- --------------------- --------------------
<S>                      <C>                 <C>                  <C>                   <C>
Joseph R. Shaya            25,000                   N/A                 $0.25                6/5/02

Patrick J. Brennan         25,000                  100%                 $0.25                6/5/02

</TABLE>



                                      24

<PAGE>



Aggregated Option/SAR Exercises during Fiscal 1997 and
Option/SAR Values at June 30, 1997

<TABLE>
<CAPTION>

                                                                                           Value ($) of
                                                                    Number (#) of          Unexercised
                                                                     Unexercised           in-the-Money
                               Shares                                Options/SARs          Options/SARs
                              Acquired              Value          at June 30,1997       at June 30,1997
                                 on               Realized           Exercisable/          Exercisable/
         Name                 Exercise               ($)          Unexerciseable (3)      Unexerciseable
          (a)                    (b)                 (c)                 (d)                   (e)
------------------------ -------------------- ------------------ --------------------- ---------------------
<S>                      <C>                  <C>                <C>                   <C>                  
Joseph R. Shaya                 None                None              150,000/0                None
Acting President
& CEO (1)

Patrick J. Brennan,             None                None               50,000/0                None
VP, CFO &
Secretary (2)

</TABLE>


(1)   Mr. Shaya joined the Company as a consultant on June 1, 1994 and resigned
      on June 27, 1997.

(2)   Mr. Brennan joined the Company on September 27, 1994.

(3)   These amounts reflect anti-dilution provisions of the options.

 .

Compensation of Directors

         Directors of the Company receive no compensation for their services
as directors.

Stock Option Plan of 1994

         On September 22, 1994, the Board of Directors ratified the adoption
of the Drug Screening Systems, Inc. Stock Option Plan of 1994 (the "1994
Option Plan") which provides for the granting of non-qualified stock options
to purchase up to 500,000 shares of the Common Stock, subject to possible
adjustment in the event of stock dividends, stock splits and similar
transactions. Pursuant to the 1994 Option Plan, options may be granted to key
employees, officers, directors, consultants and advisers of the Company and,
if later incorporated, subsidiaries; the options may become exercisable in
installments; the exercise price of an option may not necessarily be at the
fair market value of the Common Stock at its date of grant; the expiration
date of an option may be five to ten years after its date of grant; and there
is a provision permitting exercise if there is a "change of control" (which
definition does not include a transaction approved by the then current
directors).

         Pursuant to the 1994 Option Plan, options to purchase an aggregate of
270,000 shares of the Common Stock at $0.625 a share (the fair market value at
the date of grant) were granted on July 29, 1994 and an option to purchase
25,000 shares at $1.375 a share (the fair market value at the date of grant)
was granted on September 22, 1994 (subsequently reduced to $.0625 to reflect
current market). During its December 1995 meeting, the Board further reduced
the exercise price for options granted to active officers and its consultant
to $0.25 to reflect an additional drop in the market price. Options to
purchase an aggregate of 50,000 shares of the Common Stock at $0.25 a share
(the fair market value at the date of grant) were granted on June 16, 1997.
These options are exercisable on the respective date of grant and expire five
years from the respective date of grant.

                                      25

<PAGE>
<TABLE>
<CAPTION>

  Name of Optionee                  Position with Company                       Number of Shares
  ----------------                  ---------------------                       ----------------
<S>                                 <C>                                         <C>   

Granted July 29, 1994
Joseph Shaya                        Consultant (resigned 6/27/97)                       125,000
Robert G. Wallace                   Sales Consultant                                     50,000
Stephen C. Turner                   Director                                             25,000
Anthony Ian Newman                  Director                                             25,000
Jeff Davidowitz                     Director                                             25,000
Kenneth S. Carpenter                Vice President (resigned 7/26/96)                    10,000
Jeffrey M. Bachrach                 Consultant                                           10,000

Granted September 22, 1994
Patrick J. Brennan                  Vice President,Chief Financial
                                           Officer and Secretary                         25,000
Granted June 16, 1997
Joseph Shaya                        Consultant (resigned 6/27/97)                        25,000
Patrick J. Brennan                  Vice President,Chief Financial
                                           Officer and Secretary                         25,000
</TABLE>


ITEM 11  Security Ownership of Certain Beneficial Owners

(a)      Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information at August 31, 1997, based upon
information obtained from the persons named below or, in the case of James A.
Gordon and William Davidowitz, based on their filings under the Exchange Act,
with respect to the beneficial ownership of shares of the Common Stock, which
is the sole voting security of the Company, by each person known by the
Company to be the owner of more than 5% of the outstanding shares of the
Common Stock:

<TABLE>
<CAPTION>

                                    Number of Shares of
Name and Address of                    Common Stock                 Percent of
Beneficial Owner                    Beneficially Owned              Class(1)
----------------                    ------------------              --------

<S>                                  <C>                            <C>  
John Pappajohn (2)                         1,436,408(3)                 31.3%
c/o Pappajohn Capital Resources
2116 Financial Center
Des Moines, Iowa 50309

James A. Gordon                             785,093                    17.7
Edgewater Private Equity Fund L.P.
666 Grand Avenue, Suite 200
Des Moines, Iowa 50309

Jeff Davidowitz(2)                          410,000(4)                  9.2%
c/o JIBS Equities
Line and Grove Streets
PO Box 87
Nanticoke, PA  18634

William Davidowitz                          260,000                     5.8%
PO Box 87
Nanticoke, PA  18634
</TABLE>


                                      26


<PAGE>

(1)  The percentages are based upon 4,446,017 shares of the Common Stock being
     outstanding on September 1, 1997 and, where appropriate, effect is given
     to the exercise of warrants or options as required by Rule 13d-3(d)(1)(i)
     under the Exchange Act.

(2)  A director of the Company.

(3)  Includes an aggregate of 144,681 shares, after giving effect to
     anti-dilution provisions, subject to warrants expiring February 17, 1998,
     February 18, 1998. March 11, 1998 and March 30, 1998 granted to Mr.
     Pappajohn in connection with a loan guaranty and pledge

(4)  Reflects 25,000 shares issuable upon exercise of an option expiring
     August 9, 1999.


(b)      Security Ownership of Management

Set forth below is information with respect to shares of the Common Stock
beneficially owned as of August 31, 1997, based upon information obtained from
the persons named below, by each director of the Company, by the Acting Chief
Executive Officer through June 27, 1997, by the sole executive officer as of 
June 30, 1997, whose compensation exceeded $100,000 in Fiscal 1997 and by all
current directors and executive officers as a group:

Name and Address of                    Amount of Beneficial       Percent of
Beneficial Owner                            Ownership             Class(1)
----------------                            ---------             --------

John Pappajohn(2)                             1,436,408(3)          31.3%
c/o Pappajohn Capital Resources
2116 Financial Center
Des Moines, Iowa  50309

Stephen C. Turner(2)                             26,000(4)           0.6%
c/o Oncor, Inc.
 209 Perry Parkway
Gaithersburg, MD  20877

Jeff Davidowitz(2)                              410,000(4)           9.2%
c/o JIBS Equities
Line and Grove Streets
PO Box 87
Nanticoke, PA  18634

Joseph R. Shaya (5)                             150,000(6)           3.3%
1951 Sage Drive
Golden, CO 80401

Patrick J. Brennan, CPA                          50,000(7)           1.1%
c/o Drug Screening Systems, Inc.
P. O. Box 579
Blackwood, NJ 08012

All Executive Officers and
Directors as a Group (4 persons)              1,922,408             41.2%
---------------

(1)  See Note (1) to the first table in this Item 11 to this Report.

                                      27
<PAGE>

(2)  See Note (2) to the first table in this Item 11 to this Report.

(3)  See Note (3) to the first table in this Item 11 to this Report.

(4)  Reflects 25,000 shares issuable upon exercise of an option expiring
     August 9, 1999.

(5)  Mr. Shaya served as a consultant to the Company from June 1, 1994 to June
     27, 1997, during which period he served as the Acting President and Chief
     Executive Officer of the Company.

(6)  Reflects 125,000 shares issuable upon exercise of an option expiring
     August 9, 1999 and 25,000 shares issuable upon exercise of an option
     expiring June 16, 2002.

(7)  Reflects 25,000 shares issuable upon exercise of an option expiring
     August 9, 1999 and 25,000 shares issuable upon exercise of an option
     expiring June 16, 2002.



ITEM 12  Certain Relationships and Related Transactions

         Mr. John Pappajohn is the major shareholder and a member of the Board
of DSSI Corporation. Mr. Pappajohn has purchased shares of the Common Stock in
the private placements and has recently loaned funds to the Company to keep
the Company solvent. Mr. Pappajohn has no other transactions of a reportable
nature with the Company during Fiscal 1996 and Fiscal 1997.

         Mr. Joseph R. Shaya was hired as a consultant to the Company to
perform the duties of Acting President and Chief Executive Officer. Mr.
Shaya's compensation for these services are described elsewhere in this
Report. Mr. Shaya had no other transactions of a reportable nature with the
Company during Fiscal 1996 and Fiscal 1997. Mr. Shaya resigned June 27, 1997.





                                      28
<PAGE>





                                    PART IV

ITEM 13  Exhibits, List and Reports on Form 8-K

(a)      Exhibits

The exhibits listed below which are marked with a footnote reference were
filed with a prior registration statement filed under the Securities Act of
1933, as amended or in a periodic report or proxy statement filed under the
Exchange Act and are incorporated herein by this reference. The exhibits
listed below which are not marked with a footnote reference are filed with
this Form 10-KSB.

Number            Exhibit

2          Purchase and Sale Agreement dated March 14, 1997 for the sale of
           the majority of the Company's assets and business to Casco
           Standards, Inc. (9)

2(a)       Stock Purchase Agreement dated August 18, 1997 with Michael J.
           Blumenfeld. (10)

3(a)       Copy of Articles of Incorporation of the Company. (1)

3(a)(1)    Copy of Certificate of Amendment to Articles of Incorporation of
           the Company filed on December 29, 1987. (1)

3(a)(2)    Copy of Certificate of Amendment to Articles of Incorporation of
           the Company filed on December 24, 1991. (1)

3(a)(3)    Copy of Certificate of Amendment to Articles of Incorporation of
           the Company filed on May 5, 1993. (2)

3(a)(4)    Copy of Certificate of Amendment to Articles of Incorporation of
           the Company filed June 30, 1997.

3(b)       Copy of By-Laws of the Company. (1)

4(a)       Specimen Certificate of Common Stock, $0.01, par value, of the
           Company. (3)

10(a)      Copy of Warrant Agency Agreement dated as of June 4, 1993 between
           the Company and Continental Stock Transfer & Trust Company, as
           Warrant Agent. (4)

10(a)(1)   Proof of Redeemable Warrant expiring June 3, 1996 of the Company.
           (4)

10(b)      Form of Underwriter's Unit Purchase Warrant of the Company. (5)

10(b)(1)   Form of Underwriter's Warrant of the Company. (5)

10(c)      Copy of the 1988 Stock Option Plan of the Company. (1)

10(c)(1)   Copy of the 1994 Stock Option Plan of the Company.

10(d)      Copy of Employee Restricted Stock Plan of the Company. (6)

10(e)      Copy of Warrant expiring September 30, 1996 of the Company issued
           to John Pappajohn. (3)

                                      29
<PAGE>


Number            Exhibit

10(e)(1)   Copy of Investor's Rights Agreement dated April 30, 1991 between
           the Company and John Pappajohn. (3)

10(e)(2)   Copy of Warrant expiring February 17, 1998 of the Company issued to
           John Pappajohn. (3)

10(e)(3)   Copy of Warrant expiring February 18, 1998 of the Company issued to
           John Pappajohn. (3)

10(e)(4)   Copy of Warrant expiring March 11, 1998 of the Company issued to
           John Pappajohn. (3)

10(e)(5)   Copy of Warrant expiring March 30, 1998 of the Company issued to
           John Pappajohn. (3)

10(e)(6)   Copy of Investor's Rights Agreement dated February 18, 1993 between
           the Company and John Pappajohn. (3)

10(f)      Copy of Warrant expiring February 28, 1997 issued by the Company to
           Gold & Wachtel. (3)

10(g)      Copy of Lease dated May 9, 1988 between the Company, as tenant, and
           VPR Commerce Center, as landlord. (6)

10(g)(1)   Copy of Lease dated December 31, 1989 between the Company, as
           tenant, and VPR Commerce Center, as landlord. (6)

10(g)(2)   Copy of Lease dated February 19, 1992 between the Company, as
           tenant, and VPR Commerce Center, as landlord. (3)

10(g)(3)   Copy of Lease dated March 4, 1993 between the Company, as tenant,
           and VPR Commerce Center, as landlord. (3)

10(h)      Copies of Independent Laboratory Results and Supplements thereto.
           (6)

10(i)      Copy of Exclusive Distributorship, Sale and Service Agency
           Agreement dated May 12, 1989 between the Company and B.P.S. Guard
           Services, Inc. ("BPS"). (6)

10(i)(1)   Copies of Amendments dated June 5, 1989, July 7, 1989, December 19,
           1989 and January 29, 1991 to the foregoing Agreement. (6)

10(I)(2)   Copy of Exclusive Distributorship, Sale and Service Agency
           Agreement dated January 15, 1993 among the Company, BPS and Wells
           Fargo Investigative Services, Inc. (now Borg Warner Investigative
           Services, Inc.) restating and amending the Agreement, as previously
           amended, filed as Exhibits 10(i) and 10(i)(1). (3)

10(I)(3)   Copy of Distributorship, Sale and Service Agency Agreement dated
           May 8, 1995 between the Company and Borg Warmer Information
           Services, Inc. restating and amending the Agreement as previously
           amended, filed as Exhibits 10(I), 10(I)(1) and 10(I)(3).

10(I)(4)   Copy of the Exclusive Distribution Agreement dated March 5, 1996
           between the Company and U. S. Distribution, a division of Baxter
           Healthcare Corporation. (8)



                                      30
<PAGE>



Number            Exhibit

10(j)      Copy of Distribution Agreement dated July 22, 1991 between the
           Company and Marketing & Trade International, Ltd. (now Intertec,
           Inc.). (6)

10(k)(1)   Copy of security agreement dated January 18, 1993 between the
           Company and John Pappajohn. (3)

10(k)(2)   Copy of security letter agreement dated January 18, 1993 between
           the Company and John Pappajohn. (3)

10(l)      Copy of Promissory Note dated August 18, 1988 of Robert G. Wallace
           to the Company. (3)

10(l)(1)   Copy of Pledge Agreement dated August 18, 1989 by Robert G. Wallace
           to the Company. (6)

10(l)(2)   Copy of Extension Notes dated November 18, 1988 and July 1, 1991
           relating to Exhibit 10(l) hereto. (6)

10(l)(3)   Copy of Extension Note dated April 8, 1983 relating to Exhibit
           10(l) hereto. (3)

10(m)      Copy of Employment Agreement dated as of February 1, 1990 between
           the Company and Ming Sun. (3)

10(n)      Copy of Employment Agreement dated as of February 1, 1990 between
           the Company and Francis R. Pfeiffer. (3)

10(o)      Copy of Standby Agreement dated as of June 4, 1993 between the
           Company and Royce Investment Group, Inc. ("Royce"). (5)

10(o)(1)   Copy of Financial Consulting Agreement between the Company and
           Royce is an exhibit to Exhibit 10(o) hereto.

10(p)      Copy of Agreement dated as of April 30, 1993 by and among Tepnel
           Diagnostics PLC ("Tepnel"), the Company, Gold & Wachtel, as escrow
           agent, and Milberg Weiss Bershad Specthrie & Lerach. (2)

10(p)(1)   Copy of letter dated April 30, 1993 from John Pappajohn and Mary
           Pappajohn to Tepnel. (3)

10(q)      Copy of Exclusive Distribution Agreement dated May 21, 1993 between
           the Company and Tepnel Diagnostics PLC. (3)

10(r)      Copy of the Joint Research and Development Agreement dated May 21,
           1993 between the Company and Tepnel Diagnostics PLC. (3)

10(s)      Copy of the Exclusive Distribution Agreement dated September 15,
           1993 between the Company and Triangle Healthcare Systems, Ltd. (7)

10(t)      Copy of Financial Consulting and Employment Agreement dated July
           15, 1993 between the Company and Charles Levy. (7)


                                      31
<PAGE>

Number            Exhibit

10(u)      Copy of Exclusive License and Distributorship Agreement dated April
           21, 1994 between the Company and AccuScreen Labs, Inc.

10(u)(1)   Copy of Non-Exclusive Distribution Agreement dated November 11,
           1993 between the Company and AccuScreen Labs, Inc.

10(v)      Copy of Exclusive Distribution Agreement dated May 3, 1994 between
           the Company and Rimstar Trading Company.


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

(1)        Filed as an exhibit to the Company's Registration Statement on Form
           S-18, File No. 33-19770-NY.

(2)        Filed as an exhibit to the Company's Quarterly Report on Form 10-Q
           for the quarter ended March 31, 1993.

(3)        Filed as an exhibit to the Company's Registration Statement on Form
           SB-2, File No. 33- 60176.

(4)        Filed as an exhibit to the Company's Form 8-A dated dune 28, 1993.

(5)        Filed as an exhibit to the Company's Current Report on Form 8-K
           filed on July 12, 1993.

(6)        Filed as an exhibit to a Post-Effective Amendment to the Company's
           Registration Statement on Form S- 18, File No. 33-19770-NY.

(7)        Filed as an exhibit to the Company's Annual Report on Form 10- KSB
           for the year ended June 30, 1993.

(8)        Filed as an exhibit to the Company's Quarterly Report on Form
           10-QSB for the quarter ended March 31, 1996.

(9)        Filed as an exhibit to the Company's Definitive Proxy Statement for
           its Annual Meeting held on June 16, 1997.

(10)       Filed as an exhibit to the Company's Form 8-K/A filed on September
           11, 1997.



(b)        Reports on Form 8-K

           Report of Form 8-K dated 8/20/97, amended 9/11/97 to include a copy
           of stock purchase agreement between DSSI Corporation and
           Purchaser Michael J. Blumenfeld.


                                      32

<PAGE>


                                  SIGNATURES

In accordance with Sections 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.

                             DRUG SCREENING SYSTEMS, INC.

                             /s/ Patrick J. Brennan
                             ---------------------------------------
                             Vice President, Chief Financial Officer

Dated: September  23, 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.
<TABLE>
<CAPTION>

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

<S>                                          <C>                                <C> 
/s/ John Pappajohn                           Director                           September  23, 1997
----------------------------
John Pappajohn

/s/ Stephen C. Turner                        Director                           September  23, 1997
----------------------------
Stephen C. Turner

/s/ Jeff Davidowitz                          Director                           September  23, 1997
----------------------------
Jeff Davidowitz

/s/ Patrick J. Brennan                       Principal Financial                September 23, 1997
----------------------------                 and Accounting Officer
Patrick J. Brennan                          
</TABLE>