UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-QSB

[X]  Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

         For the quarterly period ended September 30, 1997

[  ] Transition Report pursuant to 13 or 15(d) of the Securities  Exchange Act
     of 1934

         For the transition period from                       to

Commission File Number 33-55254-03

                            DYNAMIC ASSOCIATES, INC.
        (Exact name of Small Business Issuer as specified in its charter)

            Nevada                                    87-0473323
(State or other jurisdiction of               (IRS Employer
        incorporation )                           Identification No.)

     7373 North Scottsdale Road, Suite B-169
               Scottsdale, Arizona                                 85253
    (Address of principal executive offices)                    (Zip Code)

Issuer's telephone number, including area code:  (602) 483-8700

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

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

            Class                           Outstanding as of September 30, 1997
------------------------------------        ------------------------------------
$.001 par value Class A Common Stock                 13,875,929 shares


                                        1

<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

BASIS OF PRESENTATION

General

         The accompanying  unaudited financial  statements have been prepared in
accordance with the instructions to Form 10-QSB and,  therefore,  do not include
all information and footnotes necessary for a complete presentation of financial
position,  results  of  operations,  cash  flows,  and  stockholders'  equity in
conformity  with generally  accepted  accounting  principles.  In the opinion of
management,  all adjustments considered necessary for a fair presentation of the
results of  operations  and  financial  position have been included and all such
adjustments are of a normal  recurring  nature.  Operating  results for the nine
months ended September 30, 1997, are not  necessarily  indicative of the results
that can be expected for the year ending December 31, 1997.

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations.

The  Company is engaged in (i) the  development  and  acquisition  of  microwave
technologies for medical purposes through MMC, a wholly owned  subsidiary,  (ii)
managing the  operations of  psychiatric/geriatric  units for various  hospitals
through Genesis and GCCA, wholly owned subsidiaries, and (iii) the manufacturing
of highly  technologically  advanced microwave components and subsystems for the
communications and aerospace industries through P&H, a wholly owned subsidiary.

The Company acquired the remaining 50% of P&H Laboratories on September 26, 1997
for 214,287  shares of its common stock valued at $3.50 per share.  Now a wholly
owned  subsidiary,  P&H Laboratories  will provide the special technical support
needed for  Microwave  Medical  Corporation  to  commercialize  its  proprietary
microwave medical device products.

On  October  10th,  1997 the Board of  Directors  of the  Company  approved  the
"spin-off" of two of its  subsidiaries,  Microwave  Medical  Corporation and P&H
Laboratories, (to be combined as one company). The Company plans to proceed with
the spin-off in an expedited manner.

The following Pro Forma table reflects the spin-off as if it occurred January 1,
1997 and shows the  operations of the two separate  entities for the nine months
ending  September 30, 1997.  The Pro Forma reflects a cost savings of $1,000,000
in management  fees that will be achieved by removing the overhead of the Parent
Company.  This  management  fee is used in part to pay the  interest  on the 10%
Convertible  Notes  which  will total  $2,023,784  in 1997.  After the  spin-off
Dynamic / Genesis will be responsible for the interest  payments.  No income tax
calculations are included.


                                        2

<PAGE>

                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                   UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
                             STATEMENT OF OPERATIONS
                      Nine Months ended September 30, 1997

<TABLE>
<CAPTION>
                                                                                SUBSIDIARIES
                                                                       Health Care           Hi-Tech
                                                                  ------------------    ------------------
                                                                           Consolidated Pro Forma
                                                                  ----------------------------------------
<S>                                                               <C>                   <C>               
Net sales                                                         $                0    $        2,670,511
Management fees                                                           11,193,175                     0
Cost of sales                                                                      0             2,046,345
                                                                  ------------------    ------------------

                                                  GROSS PROFIT            11,193,175               624,166

Selling and general and administrative
   expenses                                                                6,680,488               569,954
Depreciation and amortization                                                 50,895                65,503
Research and development                                                           0               588,888
                                                                  ------------------    ------------------
                                                                           6,731,383             1,224,345
                                                                  ------------------    ------------------
                                   NET OPERATING INCOME (LOSS)             4,461,792              (600,179)

OTHER INCOME (EXPENSE)
   Interest income                                                             8,336                21,710
   Interest expense                                                           (6,228)               (8,781)
   Loss on disposition                                                        (2,138)                    0
   Miscellaneous income                                                        1,172                29,550
                                                                  ------------------    ------------------

                                                                               1,142                42,479
                                                                  ------------------    ------------------
                                      NET INCOME (LOSS) BEFORE
                                                  INCOME TAXES    $        4,462,934    $         (557,700)
                                                                  ==================    ==================
</TABLE>


                                        3

<PAGE>



The  Company's  Annual  General  Meeting  was held on October  10th,  1997.  The
Shareholders approved

1.   The election of the directors  naming Jan Wallace,  Florian  Homm,  William
     Means and Elliot  Smith.  Mr.  Herb  Capozzi  and Mr.  Logan  Anderson  had
     declined the nominations to stand as directors.

2.   To  amend  the   Articles   of   Incorporation   providing   for  the  full
     indemnification of the officers, directors and agents of the Company, under
     Nevada law.

3.   The 1997 Stock Option Plan, with amendments.

4.   The appointment of Smith & Company as independent auditors for the Company.

5.   The Amended Bylaws of the Company.

No other business was transacted at the meeting and the meeting was adjourned.

LIQUIDITY AND CAPITAL RESOURCES

As of  September  30,  1997,  the  Company  had  $3,072,519  in  cash  and  cash
equivalents.  The Company  generated a loss of $.11 per share for the nine month
period ending  September 30, 1997 after deducting  $144,629 for  amortization of
debt costs,  $1,997,607 for depreciation and  amortization,  and $385,947 for an
unrealized decline in investments. The cost of depreciation, goodwill, debt cost
amortization and the unrealized decline in investments is approximately $.20 per
share. Cash flow generated from operations was approximately $.05 per share.

The Company through its wholly owned subsidiary,  P&H Laboratories,  operates in
the  industry  of  manufacturing  highly   technologically   advanced  microwave
components and subsystems for the communications and aerospace  industries.  P&H
expects to generate  sufficient  funds for working capital for the next quarter.
The Company  also is engaged in the  acquisition  and  development  of microwave
technologies  for medical  purposes  through its  subsidiary  Microwave  Medical
Corporation.  This subsidiary has not yet had any sales and for the next quarter
will be dependent on the Company for operating expenses.

Genesis, a Louisiana corporation,  is a 100% owned subsidiary of the Company. It
provides  elderly  healthcare and  gero-psychology  services to small healthcare
facilities  unable to provide  these  services in house.  The Genesis  treatment
program  conforms  to the  guidelines  of the  JCAHO  Accreditation  Manual  for
Hospitals and Medical  Standards.  The program is reimbursed at cost by Medicare
when  established as a distinct part unit of a hospital  which  qualifies for an
exemption from the Medicare Prospective Payment System("PPS"). The PPS exemption
provides  for a cost plus  reimbursement  system for the unit,  which allows the
hospital to receive full reimbursement of the direct operating expenses, plus an
allocation  to the  unit of a  substantial  portion  of the  hospital's  overall
overhead and capital costs.  Genesis , together with GCCA, expects to generate a
profit.



                                        4

<PAGE>

Item 5. Other Information.

Microwave Medical Corporation (MMC)

The Company's wholly owned subsidiary  Microwave  Medical  Corporation  ("MMC"),
formerly Microthermia Acquisition Corporation,  entered into a license agreement
with  Microthermia  Technology,  Inc. (of  California),  whereby MMC obtained an
exclusive license to develop and manufacture  medical device products related to
the  treatment of spider veins  (telangiectasia).  The license is for an initial
period of two years with  automatic  one year renewals for the next eight years,
at no cost,  (total license period of 10 years).  The license is prepaid for the
first two years,  however, the Company does not intend to use this technology at
the  present  time.  The  Company is  independently  developing  a  platform  of
proprietary and patentable  microwave  technologies for the treatment of various
medical conditions.  MMC is currently testing and evaluating microwave equipment
it has  developed  for the  permanent  removal of hair and a second device to be
used for the treatment of spider veins (telangiectasia).

P&H Laboratories (P&H)

On April 23,1996,  the Company  acquired 50% of the outstanding  common stock of
P&H, a California  corporation,  for $1,000,000,  together with an exclusive two
year option  expiring on April 23, 1998 to acquire the  remaining 50% of P&H for
an  additional  $1,000,000.  P&H is a modern  microwave  component  designer and
manufacturer  located in Simi Valley,  California.  Devices  produced at P&H are
currently  being  used  on  most  NASA  and  military  satellites,  as  well  as
communications satellites throughout the world.

Genesis Health Management Corporation (Genesis)

In December 1996, the Company purchased 100% of the outstanding  common stock of
Genesis for $25,373,000.  Of the purchase price, $15,050,000 was paid in cash or
notes and accounts payable and $10,323,000 was paid by issuing  3,100,000 shares
of the  Common  Stock of the  Company  at a value of $3.33 per  share.  The note
issued in connection  with the  acquisition of Genesis was paid in full on March
3, 1997.  Genesis  had been  operating  in  Louisiana  for 3 years  prior to the
purchase by the Company.  Genesis is in the  business of managing and  operating
psychiatric/geriatric   units  in  various   hospitals   (both   in-patient  and
out-patient).  Genesis has contracts  with hospitals in the states of Louisiana,
Arkansas, Mississippi and Tennessee. At September 30, 1997, Genesis had billings
to 23 units.

Geriatric Care Centers of America, Inc. (GCCA)

On  March  13,  1997,  Geriatric  Care  Centers  of  America  ("Geriatric"),   a
corporation  organized  pursuant to the laws of the state of  Tennessee,  merged
with Geriatric Care Centers  Acquisition  Corporation,  for $500,000 in cash and
150,000  shares of Common Stock of the Company.  The  surviving  corporation  is
Geriatric Care Centers of America, Inc. ("GCCA"),  with its registered office at
1613 Jimmie Davis Highway, Bossier City, Louisiana, 71112. The Company owns 100%
of  GCCA.   GCCA  is  also  in  the   business   of   managing   and   operating
psychiatric/geriatric  units in  hospitals.  At September  30, 1997,  GCCA had 4
operating units.  The financial  statements at September 30, 1997 do not include
any  income  or  expenses  for GCCA for the  first  quarter  of 1997,  as it was
acquired late in the quarter.


                                        5

<PAGE>



RESULTS OF OPERATIONS

The  financial  statements  present  the  combined  activities  of the  Company,
Genesis, Geriatric, MMC and P&H.

During the nine months ended  September  30, 1997,  management  fees of $320,000
were paid or accrued  compared  to  $319,500  for the same  period in 1996.  The
Company's President received $100,000 and other consultants received $220,000.

Net loss for the nine months ended September 30, 1997 was $1,395,005 compared to
a loss of $1,208,647 for the same period in 1996. The net loss is $.11 per share
for the nine  months.  A charge for  amortization  of goodwill and debt cost and
depreciation  of $2,142,236 and an Unrealized  Decline in Investment of $385,947
was  incurred  in the  period  which  represents  $.20 per  share.  The  Company
generated from operations a positive cash flow of $.05 per share.

Net sales for the nine months ended September 30, 1997 were $2,670,511  compared
to  $2,374,162  for the same  period in 1996.  Management  fee income  earned by
Genesis and Geriatric was  $10,949,050  for the nine months ended  September 30,
1997 compared to $0 for the same period in 1996.  The  management  fee income is
$11,193,175 when Geriatric's pre-acquisition income is included.

Cost of sales  for the nine  months  ended  September  30,  1997 was  $2,046,345
compared  to  $1,689,841  for the same period in 1996.  Cost of sales  relate to
operations at P & H.

Selling and  general  and  administrative  expenses  for the nine  months  ended
September 30, 1997 were $8,281,035 compared to $1,335,816 for the same period in
1996.  The large  increase  corresponds  to  administrative  cost related to the
acquisitions.

Research and  development  expenses  incurred by MMC were  $588,888 for the nine
months  ended  September  30, 1997  compared to $425,039  for the same period in
1996.

Depreciation and  amortization  expenses for the nine months ended September 30,
1997 were  $1,997,607  compared  to $43,614  for the same  period in 1996.  This
increase is mainly due to the amortization of goodwill.

Interest  expense for the nine months ended  September  30, 1997 was  $1,535,561
compared with $79,295 for the same period in 1996. The  substantial  increase is
mainly  associated  with the  convertible  notes and also  includes  $144,629 of
amortized debt issue costs.

Net loss for the three months ended September 30, 1997 was $627,877  compared to
a loss of $538,788  for the same period in 1996.  The net loss is $.05 per share
for the  quarter.  A charge  for  amortization  of  goodwill  and debt  cost and
depreciation  of $717,241 and a charge for  Unrealized  Decline in Investment of
$367,972 was incurred in the period which represents $.08 per share. The Company
generated from operations a positive cash flow of $.03 per share.

Net sales for the three months ended  September 30, 1997 were $902,708  compared
to $924,511 for the same period in 1996. Management fee income earned by Genesis
and  Geriatric  was  $3,839,650  for the three months ended  September  30, 1997
compared to $0 for the same period in 1996.

                                        6

<PAGE>

Cost of sales  for the  three  months  ended  September  30,  1997 was  $732,881
compared to $663,596 for the same period in 1996. Cost of sales relate to P & H.

Selling and general  and  administrative  expenses  for the three  months  ended
September 30, 1997 were  $2,881,190  compared to $511,766 for the same period in
1996.  The  large  increase  corresponds  with the  increase  in sales  from the
acquisitions made.

Research and  development  expenses  incurred by MMC were $155,783 for the three
months  ended  September  30, 1997  compared to $182,823  for the same period in
1996.

Depreciation and amortization  expenses for the three months ended September 30,
1997 were  $669,031  compared  to  $17,219  for the same  period  in 1996.  This
increase is mainly due to the amortization of goodwill.

Interest  expense for the three  months  ended  September  30, 1997 was $532,627
compared with $44,490 for the same period in 1996. The  substantial  increase is
mainly associated with the convertible notes.

                           PART II - OTHER INFORMATION

Item 6.       Exhibits and Reports on Form 8-K.

     (a) Exhibits
         99-1 Financial Statements as of September 30, 1997
         Financial Data Schedule

     (b) Reports on Form 8-K

         None.

                                        7

<PAGE>



                                   SIGNATURES

     Pursuant to the  requirements  of the  Securities and Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.




DATED:        November 18, 1997               /S/ Jan Wallace
                                              Jan Wallace, President


                                        8

<PAGE>

                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                               September 30,
                                                                                                   1997
                                                                                          ----------------------
ASSETS
     CURRENT ASSETS
<S>                                                                                       <C>                   
       Cash                                                                               $            2,964,106
       Short-term commercial paper                                                                       108,413
       Accounts receivable (less allowance for doubtful accounts of $759,925)                          4,059,853
       Loans receivable - related parties                                                                 52,500
       Other receivables                                                                                 111,585
       Inventories                                                                                       671,335
       Prepaid expense and other current assets                                                           85,352
       Deferred Tax Benefit                                                                              388,000
                                                                                          ----------------------
                                                                  TOTAL CURRENT ASSETS                 8,441,144

     PROPERTY, PLANT & EQUIPMENT                                                                         823,266

     OTHER ASSETS
       Deferred debt issue costs                                                                       1,719,439
       Investment - restricted stock                                                                      27,100
       Deferred Tax Benefit                                                                              463,000
       Goodwill                                                                                       22,776,375
       Deposits                                                                                          136,504
       Organization Costs                                                                                    700
                                                                                          ----------------------
                                                                                                      25,123,118
                                                                                          ----------------------

                                                                                          $           34,387,528
                                                                                          ======================

LIABILITIES & EQUITY
     CURRENT LIABILITIES
       Accounts payable                                                                   $              599,831
       Accrued expenses                                                                                  485,997
       Current portion of long-term debt                                                                  57,311
       Income taxes payable                                                                              219,404
       Accrued interest payable                                                                          396,164
                                                                                          ----------------------
                                                             TOTAL CURRENT LIABILITIES                 1,758,707

LONG-TERM DEBT                                                                                           200,349
CONVERTIBLE NOTES                                                                                     17,001,500
DEPOSITS                                                                                                  20,000
DEFERRED INCOME TAX                                                                                       55,500
                                                                                          ----------------------
                                                                                                      17,277,349
                                                                                          ----------------------
                                                                     TOTAL LIABILITIES                19,036,056

     STOCKHOLDERS' EQUITY Common stock $.001 par value:
         Authorized - 25,000,000 shares
         Issued and outstanding 13,875,929 shares                                                         13,876
       Additional paid-in capital                                                                     18,309,889
       Retained deficit                                                                               (2,972,293)
                                                                                          ----------------------
                                                            TOTAL STOCKHOLDERS' EQUITY                15,351,472
                                                                                          ----------------------

                                                                                          $           34,387,528
                                                                                          ======================
</TABLE>



                                       F-1

<PAGE>



                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                   Three Months Ended              Nine Months Ended
                                                                  9/30/97        9/30/96        9/30/97         9/30/96
                                                              -------------  -------------   -------------  -------------
<S>                                                           <C>            <C>             <C>            <C>          
Net Sales                                                     $     902,708  $     924,511   $   2,670,511  $   2,374,162
Management fees                                                   3,839,650              0      10,949,050              0
Cost of sales                                                       732,881        663,596       2,046,345      1,689,841
                                                              -------------  -------------   -------------  -------------

                                              GROSS PROFIT        4,009,477        260,915      11,573,216        684,321

Selling and General and Administrative expenses                   2,881,190        511,766       8,281,035      1,335,816
Depreciation and amortization                                       669,031         17,219       1,997,607         43,614
Research and development                                            155,783        182,823         588,888        425,039
                                                              -------------  -------------   -------------  -------------
                                                                  3,706,004        711,808      10,867,530      1,804,469
                                                              -------------  -------------   -------------  -------------
                               NET OPERATING INCOME (LOSS)          303,473       (450,893)        705,686     (1,120,148)

OTHER INCOME (EXPENSE)
     Interest income                                                (13,825)         9,944          61,248         87,307
     Interest expense                                              (532,627)       (44,490)     (1,535,561)       (79,295)
     Unrealized decline in investment                              (367,972)             0        (385,947)             0
     Loss on disposition                                                  0              0          (2,138)             0
     Miscellaneous income                                            26,773          9,038          30,819         11,548
     Miscellaneous expense                                           (2,367)        (4,430)         (2,367)        (4,430)
                                                              -------------  -------------   -------------  -------------
                                                                   (890,018)       (29,938)     (1,833,946)        15,130
                                                              -------------  -------------   -------------  -------------
                     NET INCOME (LOSS) BEFORE INCOME TAXES
                                     AND MINORITY INTEREST         (586,545)      (480,831)     (1,128,260)    (1,105,018)

INCOME TAX EXPENSE (BENEFIT)                                         64,959         34,700         266,745         52,500
                                                              -------------  -------------   -------------  -------------

                                  NET INCOME (LOSS) BEFORE
                                         MINORITY INTEREST         (651,504)      (515,531)     (1,395,005)    (1,157,518)

MINORITY INTEREST (INCOME)                                          (23,627)        23,257               0         51,129
                                                              -------------  -------------   -------------  -------------

                                         NET INCOME (LOSS)    $    (627,877) $    (538,788)  $  (1,395,005) $  (1,208,647)
                                                              =============  =============   =============  =============

Net income (loss) per weighted
     average share                                            $        (.05) $        (.06)  $        (.11) $        (.15)
                                                              =============  =============   =============  =============

Weighted average number of common
     shares used to compute net income
     (loss) per weighted average share                           13,710,328      8,574,294      12,763,274      7,869,877
                                                              =============  =============   =============  =============
</TABLE>



                                       F-2

<PAGE>

                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                Common Stock                   Additional
                                               Par Value $.001                   Paid-In            Retained
                                         Shares              Amount              Capital             Deficit
                                    -----------------  ------------------  ------------------  -----------------
<S>                                 <C>                <C>                 <C>                 <C>               
Balances at 12/31/96                       12,158,900  $           12,159  $       14,765,238  $      (1,577,288)
   Sale of common stock (S-8)
     at $1.00 per share                       924,600                 925             923,675
   Issuance of common stock
     (restricted) at $2.00 per
     share for subsidiary
     (Geriatric)                              150,000                 150             299,850
   Issuance of common stock
     (Reg S) to retire debt                   428,142                 428           1,498,072
   Issuance of common stock
     (restricted) at $3.50 per
     share for remaining 50%
     of subsidiary (P & H)                    214,287                 214             749,786
   Capital raising and
     subsidiary costs                                                                 (16,327)
   Minority interest adjustment                                                        89,595

Net loss for period                                                                                   (1,395,005)
                                    -----------------  ------------------  ------------------  -----------------

Balances at 9/30/97                        13,875,929  $           13,876  $       18,309,889  $      (2,972,293)
                                    =================  ==================  ==================  =================
</TABLE>



                                       F-3

<PAGE>

                     DYNAMIC ASSOCIATES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                                                             Nine Months Ended
                                                                                       9/30/97               9/30/96
                                                                                  -----------------     -----------------
OPERATING ACTIVITIES
<S>                                                                               <C>                   <C>               
   Net income (loss)                                                              $      (1,395,005)    $      (1,208,647)
   Adjustments to reconcile net income (loss) to cash provided (used) by
     operating activities:
       Depreciation & amortization                                                        2,142,236                43,614
       Net book value of assets sold                                                          2,138                     0
       Adjustment for investment received as interest income                                (15,000)                    0
       Unrealized decrease in investment                                                    385,947                     0
       Minority interest                                                                          0                51,130
       Deferred income tax                                                                    5,000                (5,000)
       Stock received for interest                                                                0               (50,000)
   Changes in assets and liabilities:
       Accounts receivable                                                               (1,745,890)              213,333
       Inventories                                                                           46,492              (269,659)
       Prepaid expenses                                                                      39,758                (1,739)
       Accounts payable and accrued expenses                                               (440,331)               90,590
       Income taxes payable                                                                 129,544              (109,898)
       Deposits                                                                              20,000                     0
                                                                                  -----------------     -----------------
                             NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES              (825,111)           (1,246,276)

INVESTING ACTIVITIES
   Loans to related party and accrued interest                                               90,246                78,602
   Loan - other                                                                                   0               (92,953)
   Purchase of equipment                                                                   (496,999)             (136,619)
   Refund of option                                                                               0                30,000
   Deposits                                                                                (113,467)             (501,312)
   Goodwill                                                                                (500,000)                    0
   Purchase of subsidiary                                                                         0            (1,000,000)
                                                                                  -----------------     -----------------
                                        NET CASH USED BY INVESTING ACTIVITIES            (1,020,220)           (1,622,282)

FINANCING ACTIVITIES
   Deferred debt issue costs                                                               (340,356)                    0
   Cash from subsidiary                                                                      41,518                     0
   Principal payments on debt                                                            (3,279,952)             (281,733)
   Capital raising costs                                                                     (3,000)                    0
   Convertible note proceeds                                                              3,996,000                     0
   Loan proceeds                                                                            132,021                     0
   Proceeds from sale of common stock                                                       924,600             2,714,374
                                                                                  -----------------     -----------------
                                    NET CASH PROVIDED BY FINANCING ACTIVITIES             1,470,831             2,432,641
                                                                                  -----------------     -----------------

                                      (DECREASE) IN CASH AND CASH EQUIVALENTS              (374,500)             (435,917)

Cash and cash equivalents at beginning of year                                            3,447,019             1,289,000
                                                                                  -----------------     -----------------

                                   CASH AND CASH EQUIVALENTS AT END OF PERIOD     $       3,072,519     $         853,083
                                                                                  =================     =================

SUPPLEMENTAL INFORMATION Cash paid for:
     Interest                                                                     $       1,034,306     $          39,425
     Income taxes                                                                           132,210               168,590
</TABLE>

                                       F-4

<PAGE>



                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                   UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
                             STATEMENT OF OPERATIONS
                      Nine months ended September 30, 1997

<TABLE>
<CAPTION>
                                                                                                     Pro Forma      Consolidated
                                                                   Dynamic       Geriatric (1)      Adjustments       Pro Forma
                                                              ---------------   ---------------  ---------------   ---------------
<S>                                                           <C>               <C>              <C>                              
Net Sales                                                     $     2,670,511   $             0  $                 $     2,670,511
Management fee income                                              10,949,050           244,125                         11,193,175
Cost of sales                                                       2,046,345                 0                          2,046,345
                                                              ---------------   ---------------  ---------------   ---------------

                                                GROSS PROFIT       11,573,216           244,125                         11,817,341

Selling and general and administrative expenses                     8,281,035            26,792                          8,307,827
Depreciation and amortization                                       1,997,607                 0                          1,997,607
Research and development                                              588,888                 0                            588,888
                                                              ---------------   ---------------  ---------------   ---------------
                                                                   10,867,530            26,792                         10,894,322
                                                              ---------------   ---------------                    ---------------
                                        NET OPERATING INCOME          705,686           217,333                            923,019

OTHER INCOME (EXPENSE)
   Interest income                                                     61,248                 0                             61,248
   Interest expense                                                (1,535,561)                0                         (1,535,561)
   Unrealized decline in investment                                  (385,947)                0                           (385,947)
   Loss on disposition                                                 (2,138)                0                             (2,138)
   Miscellaneous income                                                30,819                 0                             30,819
   Miscellaneous expense                                               (2,367)                0                             (2,367)
                                                              ---------------   ---------------  ---------------   ---------------
                                                                   (1,833,946)                0                         (1,833,946)
                                                              ---------------   ---------------                    ---------------
                             NET INCOME (LOSS) BEFORE INCOME
                                 TAXES AND MINORITY INTEREST       (1,128,260)          217,333                           (910,927)

INCOME TAX EXPENSE                                                    266,745            13,000                            279,745
                                                              ---------------   ---------------  ---------------   ---------------

                                    NET INCOME (LOSS) BEFORE
                                           MINORITY INTEREST       (1,395,005)          204,333                         (1,190,672)

MINORITY INTEREST                                                           0                 0                                  0
                                                              ---------------   ---------------  ---------------   ---------------

                                           NET INCOME (LOSS)  $    (1,395,005)  $       204,333  $                 $    (1,190,672)
                                                              ===============   ===============  ===============   ===============

Net income (loss) per weighted average share                  $          (.11)                                     $          (.09)
                                                              ===============                                      ===============

Weighted average number of common shares
   used to compute net income (loss) per weighted
   average share                                                   12,763,274                                           12,763,274
                                                              ===============                                      ===============
</TABLE>

   (1) First quarter activity

                                       F-5

<PAGE>



                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                   UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
                             STATEMENT OF OPERATIONS
                      Nine months ended September 30, 1996

<TABLE>
<CAPTION>
                                                                                                     Pro Forma      Consolidated
                                                                 Dynamic (1)        Genesis         Adjustments       Pro Forma
                                                              ---------------   ---------------  ---------------   ---------------
<S>                                                           <C>               <C>              <C>                              
Net sales                                                     $     2,374,162   $             0  $                 $     2,374,162
Management fees                                                             0         6,235,860                          6,235,860
Cost of sales                                                       1,689,841                 0                          1,689,841
                                                              ---------------   ---------------  ---------------   ---------------

                                                GROSS PROFIT          684,321         6,235,860                          6,920,181

Selling and general and administrative
   expenses                                                         1,335,816         3,974,776                          5,310,592
Depreciation and amortization                                          43,614            36,614                             80,228
Research and development                                              425,039                 0                            425,039
                                                              ---------------   ---------------  ---------------   ---------------
                                                                    1,804,469         4,011,390                          5,815,859
                                                              ---------------   ---------------                    ---------------
                                 NET OPERATING INCOME (LOSS)       (1,120,148)        2,224,470                          1,104,322

OTHER INCOME (EXPENSE)
   Interest income                                                     87,307                 0                             87,307
   Interest expense                                                   (79,295)          (12,448)                           (91,743)
   Loss on disposition                                                      0           (14,253)                           (14,253)
   Miscellaneous income                                                11,548               426                             11,974
   Miscellaneous expense                                               (4,430)                0                             (4,430)
                                                              ---------------   ---------------  ---------------   ---------------
                                                                       15,130           (26,275)                           (11,145)
                                                              ---------------   ---------------  ---------------   ---------------

                                    NET INCOME (LOSS) BEFORE
                                            INCOME TAXES AND
                                           MINORITY INTEREST       (1,105,018)        2,198,195                          1,093,177

INCOME TAX EXPENSE                                                     52,500             1,284                             53,784
                                                              ---------------   ---------------  ---------------   ---------------

                                    NET INCOME (LOSS) BEFORE
                                           MINORITY INTEREST       (1,157,518)        2,196,911                          1,039,393

MINORITY INTEREST                                                      51,129                 0                             51,129
                                                              ---------------   ---------------  ---------------   ---------------

                                           NET INCOME (LOSS)  $    (1,208,647)  $     2,196,911  $                 $       988,264
                                                              ===============   ===============  ===============   ===============

Net income (loss) per weighted
   average share                                              $          (.15)                                     $          (.09)
                                                              ===============                                      ===============

Weighted average number of
   common shares used to
   compute net income (loss)
   per weighted average share                                       7,869,877                                           11,119,877
                                                              ===============                                      ===============
</TABLE>

   (1) Includes the activities of Microwave Medical and P & H


                                       F-6

<PAGE>



                    DYNAMIC ASSOCIATES, INC. AND SUBSIDIARIES
                   UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
                             STATEMENT OF OPERATIONS
                        Quarter ended September 30, 1996

<TABLE>
<CAPTION>
                                                                                                     Pro Forma      Consolidated
                                                                 Dynamic (1)        Genesis         Adjustments       Pro Forma
                                                              ---------------   ---------------  ---------------   ---------------
<S>                                                           <C>               <C>              <C>                              
Net sales                                                     $       924,511   $             0  $                 $       924,511
Management fees                                                             0         2,356,215                          2,356,215
Cost of sales                                                         663,596                 0                            663,596
                                                              ---------------   ---------------  ---------------   ---------------

                                                GROSS PROFIT          260,915         2,356,215                          2,617,130

Selling and general and administrative
   expenses                                                           511,766         1,520,400                          2,032,166
Depreciation and amortization                                          17,219            12,127                             29,346
Research and development                                              182,823                 0                            182,823
                                                              ---------------   ---------------  ---------------   ---------------
                                                                      711,808         1,532,527                          2,244,335
                                                              ---------------   ---------------                    ---------------
                                 NET OPERATING INCOME (LOSS)         (450,893)          823,688                            372,795

OTHER INCOME (EXPENSE)
   Interest income                                                      9,944                 0                              9,944
   Interest expense                                                   (44,490)           (3,304)                           (47,794)
   Loss on disposition                                                      0           (12,503)                           (12,503)
   Miscellaneous income                                                 9,038                 0                              9,038
   Miscellaneous expense                                               (4,430)                0                             (4,430)
                                                              ---------------   ---------------  ---------------   ---------------
                                                                      (29,938)          (15,807)                           (45,745)
                                                              ---------------   ---------------  ---------------   ---------------

                                    NET INCOME (LOSS) BEFORE
                                            INCOME TAXES AND
                                           MINORITY INTEREST         (480,831)          807,881                            372,050

INCOME TAX EXPENSE
(BENEFIT)                                                              34,700                 0                             34,700
                                                              ---------------   ---------------  ---------------   ---------------

                                    NET INCOME (LOSS) BEFORE
                                           MINORITY INTEREST         (515,531)          807,881                            292,350

MINORITY INTEREST                                                      23,257                 0                             23,257
                                                              ---------------   ---------------  ---------------   ---------------

                                           NET INCOME (LOSS)  $      (538,788)  $       807,881  $                 $       269,093
                                                              ===============   ===============  ===============   ===============

Net income (loss) per weighted
   average share                                              $          (.06)                                     $           .02
                                                              ===============                                      ===============

Weighted average number of
   common shares used to
   compute net income (loss)
   per weighted average share                                       8,574,294                                           11,824,294
                                                              ===============                                      ===============
</TABLE>

   (1) Includes the activities of Microwave Medical and P & H


                                       F-7