UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-KSB

                Annual Report Under Section 13 or 15 (d) of
                       the Securities Exchange Act of 1934


                  For the fiscal year ended September 30, 1998

                         Commission file number: 2-42114

                            SIGNATURE MOTORCARS, INC.
                    ---------------------------------------
                 (Name of Small Business Issuer in Its Charter)

                   (Formerly International Royalty & Oil Co.)

      State of Nevada                                  75-1310613
     -----------------                          -----------------------
(State or Other Jurisdiction of            (I.R.S. Employer Identification No)
Incorporation or Organization)

                              7738 Forest Lane #102
                               Dallas, Texas 75230
                         ------------------------------
                     (Address of Principal Executive Offices)


Issuer's Telephone Number including Area Code: (972) 386-7700


          Securities registered pursuant to Section 12 (g) of the Act:
                        Common stock, par value $0.0167

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, and (2)
has been subject to such filing requirements for the past 90 days.

                Yes        No    X

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure  will be contained,
to the  best of  registrant's  knowledge,  in  definitve  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.......$0................

The  aggregate  market  value of the voting  stock  (1,282,018  shares)  held by
non-affiliates of the registrant on September 30, 1998, was  approximately  zero
since the stock is not currently  trading.  The number of shares  outstanding of
the registrant's  common stock on September 30, 1998, was 6,398,835  shares.  On
July 12, 1999, the Company had 7,449,835 shares outstanding.


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                                     PART I

Item 1.   Description of Business

Definitions

"Authority to Prospect" ("ATP")-a concession granted by the state of Queensland,
Australia, which entitles its holder to an exclusive right to explore for oil
and natural gas in the particular area covered by the ATP. See Foreign
Properties of Part I, Item 2 for more information.

"Carried  Working  Interest" - a WI assigned to a third party (or third parties)
who has agreed to pay all costs of drilling, completing, equipping and operating
the  underlying  lease(s)  until they have  recouped  all of their costs or some
other  contractual  amount from the revenues of the lease(s).  At the time these
costs  are recouped  (payout) the interests  or a portion  thereof is reassigned
back to the  original  owner who then  shares pro rata in the  ongoing costs and
revenues as a regular WI.

"Gravity"  is a measure of the  density of an oil.  As defined in the  petroleum
industry,  a higher gravity  corresponds to a lower density.  Gravities of crude
oils  range  from about 12 degrees  (heavy  oil) to 60  degrees  (distillate  or
gasoline-like  oil).  Lower gravity oils are generally  worth less, and they may
require unconventional technology to produce.

"Gross  production"  as used  herein is defined  as the total production of oil,
gas,  or  natural  gas liquids from  a property or group of  properties for  any
specified period of time.

The term  "overriding  royalty" as used herein is defined as an interest  carved
out of the lessee's  leasehold  or working  interest.  The amounts  payable from
overriding  royalties referred to in this Form 10-KSB are payments calculated as
a percentage of either gross production  or gross  revenue from a concession  or
lease, free and clear of all costs, except taxes.

The term  "payout" is generally  defined as a time when the total  investment or
acquisition cost has been recaptured from revenues produced from the oil and gas
lease.

The term "royalty" is generally defined as a share of the production reserved by
the  grantor  of an oil or gas lease or  concession.  Customarily,  the  royalty
interest is free of cost or expense  incident to  exploration,  development,  or
production,  except for production or gathering  taxes. The royalty is a part of
the consideration for the grant of the lease or Authority to Prospect.

The term "working interest" ("WI") as used herein means all or a fractional part
of the ownership  rights granted by a concession or lease.  The owner(s) of a WI
or a part  thereof,  pays the costs of  operations  and is entitled to the gross
production,  less  royalties  retained  by the  grantor or lessor and less other
royalties  or  non-operating  interests  created and  assigned  from the working
interest and less applicable taxes. The owner of WI may incur operating expenses
in excess of income.



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Abbreviations

BOPD - barrels of oil per day             BOPM - barrels of oil per month
MCFGPD - thousand cubic feet gas per day  MMCFGPD-million cubic feet gas per day
NP - non-producing                        ORR -  overriding  royalty
D&A - dry and  abandoned                  WI - working interest

(a)  General Development of Business

Signature Motorcars, Inc. (the Company) was organized on February 19, 1969, as a
corporation  under  the  laws  of  the  State  of  Nevada,  under  the  name  of
International  Royalty & Finance  Co. for the  general  purpose of  engaging  in
exploration  for oil and gas, and on December 23, 1971,  the name of the Company
was changed to International  Royalty & Oil Co. (IROC).  Again on July 10, 1996,
the Company  changed its name to Signature  Motorcars,  Inc., in anticipation of
entry into the car rental business; however, the anticipated merger and purchase
failed to be consummated. More recently, the Company shifted its activities back
to  its  former  direction  of  acquiring  working  interests,   royalties,  and
overriding  royalties in oil and gas properties  within the United States and in
foreign countries.  However, with the decline of oil and gas prices in 1998, the
Company has also evaluated opportunities in other industries and continues to do
so.

During its fiscal year ended September 30, 1998, the Company was not involved in
any bankruptcy,  receivership,  or similar  proceeding and underwent no material
reclassification,  merger,  or  consolidation.  The Company does not  anticipate
involvement  or  participation  in any of the  above  proceedings,  excepting  a
possible merger or consolidation.

During the period from  October 1, 1995,  to  September  30,  1998,  the Company
conducted minimal substantial business,  received nominal income and had minimal
assets or  liabilities.  The Company had limited  activity during this period of
time.

In August  1997,  a group of  stockholders  met and decided to bring the Company
into regulatory compliance and initiated a funding campaign. On August 25, 1997,
William R.  Miertschin  entered  into an Option  Agreement  with the  Company to
acquire  1,665,660  common  shares of Black Giant Oil Company  for  $25,000,  or
approximately  $0.015 per share.  At the time,  Black  Giant stock had no trades
with 0 Bid and 3 cents Ask.  The Option  Agreement  also granted  Miertschin  an
option to purchase up to 2,000,000 of the common stock of Signature for $20,000,
or 1 cent per share,  provided he first bought all of the Company's  Black Giant
stock.  Miertschin  purchased the Black Giant stock from the Company on December
15, 1997, for $25,000,  and 500,000 shares of the Company's  stock for $5,000 on
December 30,  1997,  with the  remainder  of the option being  exercised in July
1998. On September 6, 1997,  Miertschin  purchased 165,000 shares of the Company
from  Manoj K. Patel and  1,100,000  shares  from MKP  Investments,  Inc.  Patel
resigned all of his capacities in the Company effective  September 6, 1997. With
Patel's resignation,  Ivan Webb assumed corporate responsibilities on an interim
basis as  Operations  Manager,  with  Elizabeth  Webb  functioning  as Corporate
Secretary.  Later at the request of the Board,  Miertschin  agreed to assume the
office of President and Chairman of the Board of Directors effective November 1,
1997. As of July 12, 1999, those three remain in those capacities.

(b) Financial Information About Industry Segments

For the last  three  fiscal  years the  Company's  revenues  were  derived  from
Canadian oil and gas  royalties.  See Part II, Item 7 for  additional  financial
disclosure.

(c)  Narrative Description of Business

Prior to September 30, 1992,  the Company was primarily  engaged in enhanced oil
production  through the use of its  patented  process.  Although  the  Company's
patented Enhanced Oil Recovery (EOR) process is not economically

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viable due to current oil prices,  the  Company's  patent  rights and  equipment
still have value and could have more substantial value in the future.  Since the
Company's EOR  operations  have been limited since 1992, for the past six fiscal
years  the  Company  has  been   downsizing   and   evaluating   other  business
opportunities.

Principal Products and Services

When International Royalty & Finance Co. (hereinafter referred to as "IROC") was
organized in 1969, it was  incorporated  for the general  purpose of engaging in
exploration  for oil and gas.  During  the late  1980's and early  1990's,  IROC
focused to a lesser  degree on the oil and gas royalty  business and more on the
research, development and testing of an Enhanced Oil Recovery (EOR) process that
was being  patented by the Company.  The  technology  of the IROC EOR Process is
predicated upon  electromagnetic  stimulation of an oil bearing formation and/or
the  well's  production   tubing.  Its  three  major  effects  are  to  increase
production,  lower operating costs,  and reduce  downtime.  The IROC EOR process
patent was issued in April of 1992.  The Company  tested the process on a number
of wells as to its economic viability. In most cases the process was found to be
mechanically viable but economically  unsatisfactory  primarily because of lower
oil prices during the late 1980's and early 1990's.

During the fiscal  year  ending  September  30,  1992, IROC focused on its first
commercial  success  with its EOR  process.  The Turner #2 oil well in northwest
Kansas  generated  positive cash flow and profit  throughout  1989 and 1990. The
Turner Case History  demonstrated  both the mechanical and economic  efficacy of
the IROC EOR  process.  This case  showed  that the  process was able to sustain
profitable  production  of highly  paraffinic  oil,  where other EOR methods had
failed. Following the successful  demonstration of this technology,  the Company
pursued  industry  partners  with  production  problems  relating  to  heavy  or
paraffinic oil characteristics  during the three fiscal years prior to September
30, 1995.

The  premise of IROC's EOR  business  was that,  through the IROC  process,  the
Company could  acquire at low cost - and produce  profitably - known heavy crude
and  paraffinic oil reserves  which others had  considered  unrecoverable  on an
economical basis.  However, as oil prices have continued to fluctuate throughout
1990's at levels too low to make the process  economically viable on a long term
basis,  the Company planned and plans to focus on the  acquisition,  enhancement
and  production  of oil and gas  properties  without  regard to heavy  crude and
paraffinic  oil  reserves.  Therefore,  it is possible that the Company will not
utilize the IROC technology in the foreseeable future.

Oil & Gas and Other Operations

During 1995 and 1996 the Company was  involved in an attempted  acquisition  and
expansion  of  existing   high-end  car  rental   businesses;   however,   those
acquisitions  were not made. At this time, the Company has no involvement and no
intention of any involvement in the car rental industry.

As of September  30, 1998,  Signature  was  exclusively  focusing on oil and gas
related  opportunities.  Its oil and  gas  revenue  is  currently  derived  from
Canadian royalties. Oil and gas properties were evaluated in Texas, Oklahoma and
Kansas for  acquisition.  Prior to  September  30,  1998,  the Company  acquired
interests  in  two  (2)  leases  in  Texas  and  an  interest  in an  Australian
concession.  With the 1998 decline of oil prices the Company broadened its focus
and continues to evaluate  other  opportunities  both within and outside the oil
and gas industry.

Competition and Markets

The oil and gas industry is highly  competitive  in all its phases.  The Company
will be in  competition  with larger oil  companies  and others with far greater
financial resources,  experience and technical staffs. It is to be expected that
frequent  and vigorous  competition  will be  encountered  in efforts to acquire
producing oil and gas properties. The Company is not a significant factor in the
oil and gas industry.


                                       4
<PAGE>



The competition for oil and gas funding is also intense, and the competition for
viable and  financially  sound  merger or  consolidation  partners is equally as
competitive.  In the search for funding,  consolidation  and  merger/acquisition
partners,  the  Company  is in  competition  with  investment  bankers,  venture
capitalists, brokerage firms and others with far greater financial and technical
resources than the Company.

Countries, states and other jurisdictions in which the Company operates regulate
the exploration,  development, production and prices on the sale of oil and gas.
Markets for, and value of, oil and gas  discovered are dependent on such factors
as regulation,  including well spacing and production allowables, import quotas,
competitive fuels,  proximity of pipelines and price-fixing by governments,  and
international  markets,  all of which are beyond control of the Company.  During
September,   1996,  40  degree  oil  (good   gravity   crude)  was  selling  for
approximately $20.50 per barrel; in September, 1997, the price was approximately
$18.00 per barrel and in September,  1998 the price was approximately $12.00 per
barrel. Prices vary according to gravity, quality, region and purchaser.

The IROC proprietary enhanced recovery process, although proven technologically,
is subject  to market  acceptance.  While the  Company  believes  that it has no
significant  competition  in its  segment of the EOR  business,  there are other
practitioners of electromagnetics - largely on a "service company" basis. To the
extent that these companies are successful,  however, all would benefit from the
increasing  legitimacy of  electromagnetic  EOR implicit in broader  marketplace
exposure.

Foreign Currency

Due to the nature of the Company's  activities in Canada and Australia  portions
of the Company's  funds may be held at times in various foreign  currencies.  At
this time the Company does not maintain any foreign bank accounts.  However, the
Company does have  receivables from Canadian oil production and may have similar
receivables from Australia at a later date.  Revenues  generated under a foreign
currency  subjects  the Company to a limited  risk of currency  fluctuation  and
changes in rates of conversion  for different  currencies.  The Company does not
engage  or  expect  to engage  in any  hedging  or other  transactions  that are
intended   to  manage   risks   relating  to  foreign   currency   fluctuations.
Additionally,  revenues  generated in foreign countries in which the Company has
or may  acquire  interests  may be subject  to  governmental  regulations  which
restrict the free convertibility of such funds, and all remittances of funds out
of these  countries  might require the approval of the  applicable  government's
exchange control agency. Presently, the Company experiences no difficulties with
the free  convertibility  of funds from Canada and  anticipates no problems from
Australia. In the Company's opinion, the foreign exchange control laws currently
in effect in Canada and Australia do not  unreasonably  delay the  remittance of
funds generated in those countries to the United Sates .

Foreign Taxes and United States Tax Credits

The Company prior to September 30, 1998 did not have any  operations  outside of
the United States, except for one small producing overriding royalty interest in
Canada  subject to the  Canadian  non-resident  tax. In the event that  revenues
abroad, such as in Australia, are established,  then the Company will be subject
to the  imposition of taxes by foreign  governments  upon the  Company's  income
derived from the  respective  foreign  jurisdictions.  Such taxes are of various
types,  with  differing tax rates,  and are subject to changes.  Generally,  the
Company's income from a foreign jurisdiction will be taxed in the same manner as
that for other  companies  operating  in the  jurisdiction,  but  discriminatory
taxation by a particular jurisdiction may occur.

The  Company's  income is also  subject  to  taxation  under the  United  States
Internal Revenue Code of 1986, as amended (the "Code"). The Code provides that a
taxpayer may obtain a tax credit for certain taxes paid to a foreign  country or
may take a deduction for such taxes.  A tax credit is generally  more  favorable
than a  deduction.  The tax  credit  applicable  to  particular  foreign  income
generally  arises when such income is included in the Company's  taxable  income
under the provisions of the Code. There are, however,  substantial  restrictions
and limitations on the amount of the tax credit that can actually be claimed.


                                       5
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Governmental and Other Regulations

Oil and gas operations are and will be subject to federal,  state and local laws
and regulations  governing  waste,  environmental  quality,  pollution  control,
conservation and other measures regarding  environmental and ecological matters.
Failure to comply with  applicable  regulations  could result in interruption or
termination of the operations. It is impossible to  predict the impact of envir-
onmental legislation and regulations on the Company's operations and earnings in
the future.   However,  compliance  could  require the  Company to  make capital
expenditures and could adversely affect earnings of the Company.

The  domestic  production  and  sale  of oil  and gas  are  subject  to  federal
regulation by the Department of Energy (DOE) and the Federal  Energy  Regulatory
Commission  (FERC).  Rates of production of oil and gas have for many years been
subject to federal and state conservation laws and regulations. In addition, oil
and gas  operations  are  subject to  extensive  federal  and state  regulations
concerning exploration, development, production, transportation and pricing, and
to interruption or termination by governmental authorities.

In foreign countries, the Company may be subject to governmental restrictions on
production,  pricing and export controls.  Furthermore,  regulations existing or
imposed upon the Company at the time of its acquisition of properties may change
to an unpredictable  extent. The Company will have little or no control over the
change of  regulations  or imposition of new  regulations  and  restrictions  by
foreign governments, ex-appropriation or nationalization by foreign governments,
or the  imposition of additional  foreign  taxes and partial  foreign  ownership
requirements.  Management  believes  that  these  actions  are  unlikely  to  be
undertaken by the  governments of Canada and Australia where the properties from
which Company receives or may receive income are located.

Personnel

The  business of the Company was carried on for the two years prior to September
1997  primarily  by Manoj  Patel,  who  resigned as an officer  and  director on
September 6, 1997. William R. Miertschin, President, Chief Executive Officer and
Chairman of the Board of  Directors,  with Ivan Webb as  Operations  Manager and
Director,  and Elizabeth Webb as Secretary,  have been administering and funding
the Company  since October  1997.  The Company has no full-time  employees as of
September 30, 1998. The Company has no pension or  profit-sharing  plans, and it
is not a party to a collective bargaining agreement.

Item 2.  Description of Property

Domestic Properties

Prior to September 30, 1992, the Company sold the Turner lease in Graham County,
Kansas,  discussed in  Part I, (c) Narrative Description of Business,  Principle
Products and Services, and  by  September 30,  1997, the Company had sold all of
its  other domestic oil  interests to fund operational expenses while downsizing
the Company. Therefore as of that date the Company  had no  domestic oil and gas
properties. The following is a description of each of the properties acquired by
the Company subsequent to September 30, 1997:

Troell Leases - On October 16, 1997, the Company  entered into two agreements to
acquire 50% working  interest in the C.T.  Troell  lease(s)  located in Atascosa
County,  Texas.  One agreement  provided for the  acquisition  of 31.25% working
interest from Benjamin  Botello,  Trustee,  for $30,000 and 85,000 shares of the
Company's  common  stock.  The Company  signed a note for  $30,000,  bearing 12%
interest  payable  monthly  ($300.00),  and this debt was  extended.  The second
agreement  was entered into with  Blain-Willis,  Inc., to acquire the balance of
the 50%  working  interest  (18.75%)  in the C.T.  Troell  lease.  The  terms of
acquiring  this  working  interest  were  that the  Company  was to  deliver  to
Blain-Willis  $18,000  and  51,000  shares of the  Company's  common  stock.  On
February 18, 1998, the Company paid Blain-Willis  $18,000 for the 18.75% working
interest, and later the 51,000 shares were issued to Blain-Willis.


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The C.T. Troell lease contains 8 oil wells completed in formations  ranging from
1,600 to 1,950  feet.  This 120 acre lease is expected to average 15 BOPD when 6
wells are put into production. This lease was expected to be put into production
during  the second or third  quarter of 1998; however, the decline of oil prices
during this  period caused  operational funding  to be withdrawn.  Subsequent to
September 30, 1998, the Company continues to evaluate both the opportunities for
funding the operations or selling the interests.

Spires  Wells - On October 20,  1997,  the Company  entered into an agreement to
acquire 40% working  interest in the two Spires wells  located in Nolan  County,
Texas,  for 250,000 shares of common stock and settle certain  account  payables
related to the lease.  The Spires  wells  include a single well with an expected
production  rate of 18-20 barrels per day and a salt water disposal well.  These
wells were expected to be put into production during the second or third quarter
of  1998;  however,  the  decline  of  oil  prices  during  this  period  caused
operational  funding to be  withdrawn.  Subsequent  to September  30, 1998,  the
Company  continues to evaluate both the opportunities for funding the operations
or selling the interests.

Foreign Properties

Prior to  September  30,  1995,  the Company sold all of its foreign oil and gas
interests to raise funds,  with the  exception of one small  Canadian  producing
overriding royalty interest,  which generated $522 and $521 for the fiscal years
ending September 30, 1996 and 1997  respectively.  Revenues  generated from this
overriding  royalty interest for the fiscal year ending  September 30, 1998 were
used to offset the write off of  discontinued  operations.  See Part II Item 7 -
Notes to Financial Statements - Note 1.

During the fiscal year ended  September  30, 1998,  an interest in an Australian
concession was acquired. The following is a description of this property.

Australian  Concession - On January 26, 1998, the Company  entered into a Letter
Agreement with Trebor  Resources Co. of Dallas,  Texas, for acquisition of 12.5%
working interest in an oil and gas concession located in Queensland,  Australia.
The Company  agreed to pay $12,500 for the 12.5%  working  interests and paid an
initial  payment of $2,500 on January 26,  1998.  The balance  will be paid upon
notice that Authority to Prospect  (ATP) 638 has  officially  been issued by the
Queensland  government.  The  concession,  known as ATP 638,  is  located in the
western part of Queensland and covers approximately 130,000 acres. A preliminary
seismic  evaluation showed several potential  structures on the concession which
need to be further  evaluated in order to attempt to develop them into  possible
drillable prospects.

Subsequent  to September  30, 1998 the Company  received a Cash Call notice from
Trebor  Resources Co. regarding the Queensland ATP 638P requiring the Company to
pay the balance  ($10,000 USD) due Trebor on or before December 31, 1998 per the
terms of the January 26, 1998 Letter Agreement between Signature and Trebor. Due
to low oil prices  (approximately  $10.00 per barrel or less) and the  Company's
financial  constraints and expanded focus,  the Company was compelled to forfeit
its  interest  in  ATP  638P,   however,   management  was  able  to  obtain  an
understanding  where Trebor  would  return the $2,500 to the Company  subject to
Trebor obtaining favorable funding for the project.

Item 3.  Legal Proceedings

As of June 30, 1999, there were no legal  proceedings to which the Company was a
party, and no legal litigation is known to be pending.

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

No matters have been submitted to a vote of security holders since May 17, 1996,
at the Company's last Annual Meeting.  A shareholder  meeting is planned for the
fall of 1999.


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                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

Market Information

The Company's common stock is currently not traded.  However the Company's stock
was trading on the  over-the-counter  market of the Electronic Bulletin Board in
1996.  Subsequent to September 30, 1998, the Company began the process of taking
those  necessary  steps to cause it to be  relisted  and  restored  to a trading
status.

There are no warrants outstanding as of September 30, 1998.

Approximate Number of Holders of Common Stock

The  approximate  number of security  holders of record of Signature  Motorcars,
Inc. (formerly  International Royalty & Oil Co.), common stock on July 12, 1999,
was 1,393.  Additional  stockholders  hold stock in street  name;  the number of
holders in street name is not available to the Company.

Dividend Information

The  Company  has not  declared  or paid  dividends  in the  past,  and does not
anticipate doing so in the immediate future.


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

General Discussion

During the three years ended September 30, 1995, revenues were insignificant and
expenses were kept to a minimum.  The 1993 and 1994 fiscal years were focused on
seeking industry partners for development and use of its EOR process.  The price
of oil remaining  below $20.00 per barrel made the search for partners and joint
ventures difficult.  The major shareholder and debt holder of the Company,  A.W.
Adkisson  Estate,  expanded the parameters of the search to include other viable
business opportunities to merge into the corporate public vale of the Company.

On December 4, 1995,  the Company  entered into a Statement  of  Intention  with
ExotiCar,  Inc., a newly formed  Oklahoma  corporation.  As per the Statement of
Intention,  the Company was brought  into  compliance  with the  Securities  and
Exchange Commission's (SEC's) full reporting requirements.

The goal of ExotiCar was to establish a number of high-end car rental  locations
with  luxury cars and  specialty  sports  cars.  On July 10,  1996,  the Company
changed its name to Signature Motorcars, Inc., in anticipation of entry into the
car rental business;  however,  the anticipated merger and purchase failed to be
consummated.  Subsequently the Company shifted its activities back to its former
direction of acquiring working interests, royalties, and overriding royalties in
oil and gas properties within the United States and foreign countries.

Prior to September  30, 1997, a group of  shareholders  met in August to discuss
the  Company's  future and outline a plan to fund the  Company.  The plan was to
sell, through a series of private transactions, certain Company assets and


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<PAGE>


restricted  Company common stock to raise  operating  capital and to pay for the
Company to update its regulatory  status.  Since the anticipated merger with the
ExotiCar  group was not  completed,  the August 1997 plan called for a change of
control of Company management through the acquisition of large blocks of Company
stock obtained from the former ExotiCar control group.

In accordance  with the above plans,  on August 25, 1997, the Company granted to
William R. Miertschin an exclusive option to acquire  1,665,660 shares of common
stock of Black Giant Oil Company for $25,000, or approximately $0.015 per share,
which was owned by the Company. At that time, Black Giant was also inactive, and
there was  virtually no market for the stock.  On December 15, 1997,  Miertschin
exercised  this option and delivered  $25,000 to Signature.  Also, in the August
25, 1997,  Option  Agreement,  the Company  agreed to sell to  Miertschin  up to
2,000,000 shares of its common stock in a private placement at an offering price
of $0.01 per share if Miertschin first purchased the Black Giant stock, which he
did as stated above. On December 30, 1997,  Miertschin  purchased 500,000 shares
for $5,000,  and the balance was  exercised in July 1998.  On September 6, 1997,
Miertschin acquired the control block of Signature stock (1,265,000 shares) from
the ExotiCar group (Manoj Patel, et al).

After the change of control, management proceeded to bring the Company back into
compliance  with  the  various  government  agencies  by  bringing  current  the
corporation fees in Nevada, engaging a tax accountant to prepare the tax returns
for the delinquent years and prepare the financial  statements for audit for the
three years ended September 30, 1996, 1997 and 1998.

Assets & Liabilities

The  Company's  assets as of  September  30,  1996 and  1997,  were $78 and $284
respectively.  The Company holds the patent (issued April 1992) for the IROC EOR
process, and has equipment necessary for the process. The IROC EOR process shows
this  financial asset with no value, having been  written off in the year ending
September  30,  1996,  but this  process  could be of  significant  value in the
future.  See Note 1 to the  Financial  Statements.  As of September 30, 1996 and
1997, the Company had no  liabilities,  as all of the debt had been converted to
equity.  Prior to  September  30,  1996 the assets of the  Company  were sold to
reduce or eliminate debt.

During the year ending  September 30, 1998 the Company  began  acquiring oil and
gas properties with the intention of developing the properties as an oil and gas
producer.  The drop in oil prices during 1998 caused the Company to  discontinue
those  operations.  Therefore,  these  operations  are reported as net assets of
discontinued  operations on the Company's balance sheet. The Company's assets as
of September 30, 1998  were $24,620 and  liabilities were $4,800.  See  Notes to
Financial Statements - Note 1.

Income and Expenses

The Company only had one income  producing  property on  September  30, 1996 and
1997, a small Canadian override which generated $522 for 1996 and $521 for 1997.
No other income was reported during these periods.  During the fiscal year ended
September  30, 1998  revenues  earned from the  Canadian  override  were used to
offset the write off of  discontinued  operations.  Also during this fiscal year
the Company sold  1,665,660  shares of Black Giant Oil Company  common stock for
$25,000.  The Company  had  previously  written  off this  stock as a  financial
asset.  Therefore,  the Company  had no basis and  reported a gain of $25,000 on
this sale. Prior to and at the time of this sale, Black Giant Oil Company was an
inactive  stock with  virtually  no market  value.  See Note 3 to the  Financial
Statements.

The General Administrative  expenses were minimal during the fiscal years ending
September 30, 1996 and 1997 being $2,025 and $566  respectively.  These expenses
primarily  include  postage  and bank  charges.  During the fiscal  year  ending
September  30,  1996 the  Company  wrote off  $18,000  relating  to the IROC EOR
process and other small assets.


                                       9
<PAGE>


The General  Administrative  expenses for the fiscal year ending  September  30,
1998 were $43,750 which primarily consist of stock issued for services.

Income Taxes

The Company  anticipates that it will not generate taxable income  sufficient to
utilize  its  carried  forward  tax  losses at this  time,  based on  historical
performance. See Note 5 to Financial Statements for additional disclosure.


Recent Accounting Pronouncements

In June 1998, the Financial  Accounting  Standards Board (FASB) issued Statement
of Financial Accounting Standard No. 133, "Accounting for Derivative Instruments
and Hedging  Activities" (SFAS 133). This statement  standardized the accounting
for derivative instruments, including certain derivative instruments embedded in
other  contracts,  requiring that an entity  recognize  those items as assets or
liabilities  in the  statement  of  financial  position and measure them at fair
value. The statement  generally provides for matching the timing of gain or loss
recognition on the hedging instrument with the recognition of (a) the changes in
fair value of the hedged  assets or  liabilities  that are  attributable  to the
hedged risk, or (b) the earnings effect of the hedged transaction. The statement
is effective for all fiscal  quarters of all fiscal years  beginning  after June
15,  1999,   with  earlier   application   encouraged,   and  shall  be  applied
retroactively to financial statements of prior periods.  Adoption of SFAS 133 is
expected to have no effect on the Company's financial statements.

Disclosure Regarding Forward-Looking Statements

This Form 10-KSB  includes  "forward-looking"  statements  within the meaning of
Section 27A of the Securities  Act and the Company  desires to take advantage of
the "safe harbor" provisions thereof.  Therefore,  the Company is including this
statement for the express  purpose of availing itself of the protections of such
safe harbor provisions with respect to all of such  forward-looking  statements.
The forward-looking statements in this Form 10-KSB reflect the Company's current
views  with  respect  to  future   events  and  financial   performance.   These
forward-looking  statements are subject to certain risks and uncertainties  that
could cause actual results to differ from those anticipated. In the Form 10-KSB,
the words "anticipates,"  "believes,  "expects," "intends," "future" and similar
expressions  identify  forward-looking  statements.  The Company  undertakes  no
obligation to publicly revise these forward-looking statements to reflect events
or circumstances  that may arise after the date hereof.  All subsequent  written
and oral  forward-looking  statements  attributable  to the  Company  or persons
acting on its behalf are expressly qualified in their entirety by this section.

Year 2000 Compliance

The year  2000  poses  certain  issues  for  business  and  consumer  computing,
particularly the  functionality  of software for two-digit  storage of dates and
special meanings for certain dates such as 9/9/99.  The year 2000 is also a leap
year, which may lead to incorrect calculations, functions or system failure. The
widespread use of computer  programs that rely on these  two-digit date programs
to perform  computations  and  decision-making  functions may cause  information
technology systems to malfunction in and around the year 2000. Such malfunctions
may lead to significant  business  delays in the U.S. and  internationally.  The
problem exists for many kinds of software,  including  software for  mainframes,
PCs and embedded  systems.  Many normal business  activities will potentially be
impacted because information necessary to monitor and control various operations
is controlled by computers.

The Company has studied and tested its technologies systems impacted by the Year
2000 transition.  The Company believes that its systems are Year 2000 compliant.
However, variability of hardware and software combinations may


                                       10
<PAGE>


lead to unforeseen problems. The Company does not believe that any problems that
arise with  internal  systems will be material or will require more than minimal
costs to overcome.

The  Company's  vendors  are  various  and  diverse  and the  bulk of the  items
purchased by the Company are widely  available.  There are no problems which are
expected  to arise due to  vendors'  failure to be Year 2000  compliant  because
auxiliary  channels  should be available to the Company to acquire its supplies,
parts and other needs from other  vendors  should any  particular  vendor have a
problem due to noncompliance.

Due to the nature of the Company's  business and its  information and accounting
systems, costs to bring its systems into compliance have been immaterial.

Item 7.  Financial Statements

The financial statement information for Signature is set forth immediately
following the signature page of this Form 10KSB. See the Index to Financial
Statements on page F-1.


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

The  previous auditor, Patricia G. Swant C.P.A. of Tulsa, Oklahoma, audited  the
year ended September 30, 1993, 1994 and 1995. Subsequently Jackson & Rhodes P.C.
of Dallas, Texas was engaged to audit the 1996, 1997 and 1998 years.

There are no disagreements bewteen the Company and its auditor, Jackson & Rhodes
P.C. of Dallas, Texas regarding accounting and/or financial disclosure.


PART III

Item 9.  Directors and Executive Officers of the Registrant

The following are the officers and directors of the Company as of July 12, 1999:

                Name                Age               Position
     -----------------------------------------------------------------------
         William  R. Miertschin     51         President, CEO & Director

         Elizabeth Webb*            50               Secretary

         Howard B. Siegel           57                Director

         Ivan Webb*                 48                Director

             * Ivan Webb and Elizabeth  Webb are husband and wife.  There are no
             other family relationships between the Directors and Officers.


                                       11
<PAGE>


William R. Miertschin,  President,  Chief Executive Officer, and Chairman of the
Board of Directors,  is an oil and gas consultant with offices in Dallas, Texas.
He is a 1972  graduate  of the  University  of  Texas  at  Austin,  with a BA in
Mathematics.  He completed  additional  courses in petroleum  engineering at the
University  of Texas of the  Permian  Basin  in 1978.  He began  his oil and gas
career in 1975 as an  Engineer  with the Baroid  Division  of NL  Industries  in
Odessa,  Texas. From 1977 to 1979,  Miertschin was Drilling  Supervisor for Gulf
Oil Exploration  and Production,  being the first trainee to complete Gulf Oil's
drilling  and  production  engineering  training  program.  Thereafter,  he  was
employed with Mesa Petroleum  (1979-1985) as Corporate  Supervisor of Regulatory
and Safety in Amarillo,  Texas,  and as Drilling  Supervisor and Senior Drilling
Engineer in Midland and Amarillo,  Texas, managing Mesa's corporate drilling and
completion operations for all of the Permian Basin Division, Texas Panhandle and
Kansas.  In 1986 he  graduated  from  the  Leadership  Amarillo  Program  of the
Amarillo  Chamber of Commerce.  A member of the Society of Petroleum  Engineers,
Miertschin  has  served as an  expert  witness  before  the  Kansas  Corporation
Commission  (KCC) and the New  Mexico  Oil  Conservation  Commission  (NMOCC) on
regulatory  affairs,   drilling  and  completion,   and  analysis  of  potential
production purchases.  He served on the Oil and Gas Advisory Committee to KCC to
revise statewide rules in Kansas.  Miertschin has been active in the oil and gas
industry as an investor and operator, and in private practice as a consultant in
the Dallas-Fort Worth area, for the last twelve (12) years.

Elizabeth Webb,  Secretary,  of Cisco,  Texas,  received her Bachelor of Science
Degree in Business  Administration  from Tarleton State  University (a branch of
Texas A&M  University) in 1979. She has served as Secretary of the Company since
August 1997.  She is  also serving as  Secretary  for Black Giant Oil Company, a
public company,  and has held this position for the past 13 years. Over the past
five years she has been active in keeping records for independent oil producers,
including  regulatory  compliance filings with the Railroad Commission of Texas.
Mrs. Webb is currently employed by the Cisco Independent School District.

Howard Siegel, Director, received his Bachelor of Business Administration Degree
from the  University of Oklahoma in 1966. He received a Doctor of  Jurisprudence
Degree from St. Mary's University School of Law in 1969. Mr. Siegel was formerly
an attorney for The Superior Oil Company, a major oil and gas concern located in
Houston,  Texas. He previously served as Vice President,  General Counsel, and a
member of the Board of Directors of Tenneco Inc. Federal Credit Union. From July
1974 to August 1989, Mr. Siegel was employed as an attorney with the law firm of
Bracewell & Patterson in Houston, and from that date until January, 1991, he was
employed with Hurt, Richardson,  Garner, Todd & Cadenhead, attorneys in Atlanta,
Georgia.  Currently,  Mr. Siegel is a practicing attorney in Houston, Texas, and
serves as a Director of Golden  Triangle  Industries,  Inc.,  a publicly  traded
company on the NASDAQ Small Cap  Exchange.  Mr. Siegel has served in an advisory
capacity to the Board of Directors of the Company since May, 1995.

Ivan Webb,  Operations  Manager and  Director,  of Cisco,  Texas,  received  his
Bachelor  of Business  Degree in Business  Administration  from  Tarleton  State
University (Texas A&M Branch) in 1978. He was instrumental in the preparation of


                                       12
<PAGE>


four domestic oil and gas public stock offerings.  Mr. Webb has been involved in
negotiations for the  acquisition of more  than 200  producing oil and gas prop-
erties within the United States during  his career. He has  international exper-
ience negotiating with governments for oil and gas concessions in Australia and
Argentina, gold  and  diamond leases in Guyana, and  a bauxite project in India.
He is currently Chief Financial Officer of Ness Energy International, Inc., and
president of Black Giant Oil Company  both of which  are public companies listed
on the Electronic Bulletin Board.


Item 10.  Executive Compensation

The following  table shows the annual  compensation  to be paid to the Company's
president.  Subject to funding and/or the  availability  of funds from revenues,
the compensation committee may increase the president's salary.

            Name and Principal Position                 Salary
            ---------------------------------------------------
            William R. Miertschin, President           $18,000

All compensation and other arrangements between the Company and its officers and
directors  are to be  approved  by a  Compensation  Committee  of the  Board  of
Directors,  a majority of whom are to have no affiliation or  relationship  with
the  Company  other  than  as  directors.   To  conserve  working  capital,  the
Compensation  Committee arranged  compensation for the Company's president to be
paid in stock in lieu of cash. See Note 4 of the Financial Statements.


Item 11.  Security Ownership of Certain Beneficial Owners and Management

The following is certain  information  concerning persons or firms who are known
by the Company to own  beneficially  more than 5% of the Company's  common stock
(7,449,835) and voting shares on July 12, 1999.


                          Name and Address       Number of        Percent
Title of Class          of Beneficial Owner     Shares Owned      of Class
--------------------------------------------------------------------------------
Common Stock           William R. Miertschin      3,911,192         52.50%
$0.0167 Par Value      310 Deer Path
                       Fairview, Texas 75069

Common Stock           Elizabeth Webb                25,000*         0.33%
$0.0167 Par Value      901 W. Sixth Street
                       Cisco, Texas 76437

Common Stock           Ivan Webb                    370,000*         4.97%
$0.0167 Par Value      901 W. Sixth Street
                       Cisco, Texas 76437

Common Stock           Howard Siegel                120,000          1.61%
$0.0167 Par Value      14760 Memorial Drive
                       Houston, Texas 77079

All Directors and Officers as a group (4 persons) 4,426,192         59.41%

Common Stock           A.W. Adkisson Estate         595,589          8.00%
$0.0167 Par Value      6300 RidgeLea Place
                       Suite 611
                       Fort Worth, Texas 76116

All Beneficial Owners as a group                  5,021,781          67.41%

* The only family  relationship  between the officers and directors is that Ivan
  Webb and Elizabeth Webb are husband and wife.


                                       13
<PAGE>


Changes in Control of Issuer.

In August  1997,  a group of  stockholders  met and decided to bring the Company
into regulatory compliance and initiated a funding campaign. On August 25, 1997,
William R.  Miertschin  entered  into an Option  Agreement  with the  Company to
acquire  1,665,660  common  shares of Black Giant Oil Company  for  $25,000,  or
approximately  $0.015 per share.  At the time,  Black  Giant stock had no trades
with 0 Bid and 3 cents Ask.  The Option  Agreement  also granted  Miertschin  an
option to purchase up to 2,000,000 of the common stock of Signature for $20,000,
or 1 cent per share,  provided he first bought all of the Company's  Black Giant
stock.  Miertschin  purchased the Black Giant stock from the Company on December
15, 1997, for $25,000,  and 500,000 shares of the Company's  stock for $5,000 on
December 30,  1997,  with the  remainder  of the option being  exercised in July
1998.  On September  6, 1997,  Miertschin  acquired  control of the Company from
Manoj K. Patel by purchasing  165,000  shares of the Company from Manoj K. Patel
and 1,100,000 shares from MKP Investments,  Inc. which was owned by Patel.  This
total purchase of 1,265,000  shares  represented  42.55% of the 2,972,385 shares
outstanding;  prior to this purchase  Miertschin  owned 26,192 shares which gave
Miertschin a total of 1,291,192  shares or 43.43% of the  Company's  outstanding
stock.  After Miertschin  exercised his above referenced  option for two million
(2,000,000) shares and with subsequent stock  acquisitions,  on the date of this
filing  Miertschin  owns 3,911,192  shares or 52.50% of 7,449,835  shares of the
Company's stock outstanding. Patel resigned all of his capacities in the Company
effective  September  6,  1997.  With  Patel's  resignation,  Ivan Webb  assumed
corporate  responsibilities  on an interim  basis as  Operations  Manager,  with
Elizabeth Webb functioning as Corporate Secretary.  Later, at the request of the
Board,  Miertschin  agreed to assume the office of President and Chairman of the
Board of Directors  effective November 1, 1997. As of July 12, 1999, those three
remain in those capacities.

Item 12. Certain Relationships and Related Transactions

Since William R. Miertschin and Ivan Webb both have interests in the oil and gas
business,  their  interests  could  directly  or  indirectly  compete  with  the
interests of the  Company.  Although the Company is not aware of any conflict of
interest,  such  present or future  activities  on the part of the  officers and
directors  could cause a conflict of interest.  If the Company should enter into
transactions  in the  future  with its  officers,  directors  or  other  related
parties,  the consideration to them as a result of such transactions shall be as
favorable  to the Company as those which  could be  obtained  from an  unrelated
party in an arm's length transaction.  Tango Oil Co., a Texas Corporation, which
is the operator of the C. T. Troell lease in Atascosa  County,  Texas,  is owned
and controlled by Miertschin,  and Miertschin  formerly owned an interest in the
Troell  lease.  Prior to  Miertschin's  becoming  a  director  or officer of the
Company, the Company made the decision to acquire 40% working interest in Spires
lease in Nolan County,  Texas; at that time Miertschin owned a minority interest
in that lease,  and it is anticipated  that Tango may become the operator of the
Spires  lease in the  future.  Miertschin  no longer  owns an interest in either
lease.


Item 13.  Exhibits and Reports on Form 8-K

No reports were filed on Form 8-K during the past three years ended
September 30, 1998.


                                       14
<PAGE>


                                   SIGNATURES

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

                                        SIGNATURE MOTORCARS, INC.

Date: July 16, 1999                     /s/ William Miertschin
                                       -----------------------
                                        By: William Miertschin, President, Chief
                                         Executive Officer, Principal Accounting
                                         Officer, Principal Financial Officer


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

         Signature                Title                         Date


/s/ Elizabeth Webb              Secretary                  July 16, 1999
-------------------------
Elizabeth Webb


/s/ William R. Miertschin       President & Director       July 16, 1999
-------------------------
William R. Miertschin


/s/ Howard Siegel               Director                   July 16, 1999
-------------------------
Howard Siegel


/s/ Ivan Webb                    Director                   July 16, 1999
-------------------------
Ivan Webb


                                       15
<PAGE>


                            SIGNATURE MOTORCARS, INC.

                          AUDITED FINANCIAL INFORMATION

                          INDEX TO FINANCIAL STATEMENTS

                                                                            Page

         Independent Auditor's Report                                        F-2

         Balance Sheets for the years ended
         September 30, 1998, 1997 and 1996                                   F-3

         Statements of Operations for the years ended
         September 30, 1998, 1997 and 1996                                   F-4

         Statements of Changes in Stockholders' Equity
         for the years ended September 30, 1998, 1997 and 1996               F-5

         Statements of Cash Flows for the years ended
         September 30, 1998, 1997 and 1996                                   F-6

         Notes to Financial Statements                                       F-7





                                      F-1
<PAGE>


                          INDEPENDENT AUDITORS' REPORT


Board of Directors
Signature Motorcars, Inc.

We have audited the accompanying balance sheets of Signature Motorcars,  Inc. as
of September 30, 1998,  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 these financial  statements based on
our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Signature Motorcars, Inc. as of
September 30, 1998, 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.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial statements, the Company's significant operating losses and its working
capital deficit raise substantial doubt about its ability to continue as a going
concern.  The  financial  statements do not include any  adjustments  that might
result from the outcome of this uncertainty.


/S/ Jackson & Rhodes, PC

Jackson & Rhodes, PC
Dallas, Texas
July 8, 1999













                                      F-2

<PAGE>


<TABLE>
<CAPTION>
                                                  SIGNATURE MOTORCARS, INC.
                                                       BALANCE SHEETS
                                              September 30, 1998, 1997 and 1996

                                                       Assets
<S>                                                     <C>                  <C>                 <C>
                                                                1998                 1997             1996
                                                        -------------------  ------------------- --------------------

Current assets:
         Cash                                            $              173  $               284  $                78
                                                        -------------------  ------------------- --------------------

Other assets:
      Net assets of discontinued operations                          24,447                    -                    -
                                                        -------------------  ------------------- --------------------
             Total other assets                                      24,447                   -                     -
                                                        -------------------  ------------------- --------------------
                                                          $          24,620   $              284  $                78
                                                        ===================  =================== ====================
</TABLE>
<TABLE>
<CAPTION>
                                          Liabilities and Stockholders' Equity
<S>                                                     <C>                  <C>                 <C>

Current liabilities:
      Accrued liabilities                                $            4,800   $                -  $                 -
                                                        -------------------  ------------------- --------------------
             Total liabilities                                        4,800                    -                    -
                                                        -------------------  ------------------- --------------------

Commitments and contingencies (Note 7)                                    -                    -                    -

Stockholders' equity:
      Preferred stock, $.10 par value,
             1,000,000 shares authorized; none
              issued and outstanding                                      -                    -                    -
      Common stock, $.0167 par value,
            100,000,000 shares authorized;
            6,398,835, 2,972,835 and 2,957,835
            shares issued and outstanding                           106,861               49,647               49,396
      Additional paid-in capital                                  7,442,102            7,442,102            7,442,102
      Retained earnings                                          (7,459,883)          (7,422,205)          (7,422,160)
                                                        -------------------  ------------------- --------------------
                                                                     89,080               69,544               69,338
      Less treasury stock (40,272 shares, at cost)                  (69,260)             (69,260)             (69,260)
                                                        -------------------  ------------------- --------------------
             Total stockholders' equity                              19,820                  284                   78
                                                        -------------------  ------------------- --------------------
                                                          $          24,620   $              284  $                78
                                                        ===================  =================== ====================
</TABLE>







                                 See accompanying notes to financial statements.
                                                        F-3



<PAGE>


<TABLE>
<CAPTION>
                                                  SIGNATURE MOTORCARS, INC.
                                                  STATEMENTS OF OPERATIONS
                                        Years Ended September 30, 1998, 1997 and 1996


<S>                                               <C>                    <C>                    <C>
                                                           1998                    1997                 1996
                                                  ---------------------  ---------------------- --------------------

Revenues:
      Miscellaneous income                         $                 -   $                521   $              522
                                                  ---------------------  ---------------------- --------------------

              Total revenues                                         -                    521                  522
                                                  ---------------------  ---------------------- --------------------

Operating expenses:
      General and administrative                                43,750                    566                2,025
                                                  ---------------------  ---------------------- --------------------
                                                                43,750                    566                2,025
                                                  ---------------------  ---------------------- --------------------

              Loss from operations                             (43,750)                   (45)              (1,503)
                                                  ---------------------  ---------------------- --------------------

Other income (expense):
      Interest expense                                          (4,800)                    -                      -
      Gain on sale of assets (Note 3)                           25,000                     -                      -
      Write-off of intangibles                                       -                     -               (46,390)
                                                  ---------------------  ---------------------- --------------------
              Total other income (expense)                      20,200                     -               (46,390)
                                                  ---------------------  ---------------------- --------------------
              Loss from continuing                             (23,550)                   (45)             (47,893)
              operations
Discontinued operations                                         (7,428)                    -                      -
                                                  ---------------------  ---------------------- --------------------
              Net loss                              $          (30,978)   $               (45)  $          (47,893)
                                                  =====================  ====================== ====================

Loss per common share:
      From continuing operations                   $             (0.01)   $             (0.00)$              (0.04)
                                                  =====================  ====================== ====================
      Net loss                                     $             (0.01)   $             (0.00)$              (0.04)
                                                  =====================  ====================== ====================

Weighted average common shares                               3,444,752              2,961,585            1,270,419
outstanding
                                                  =====================  ====================== ====================
</TABLE>







                                 See accompanying notes to financial statements.
                                                        F-4







<PAGE>


<TABLE>
<CAPTION>
                                                     SIGNATURE MOTORCARS, INC.
                                      STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                         Years Ended September 30, 1998, 1997 and 1996



                                            Common Stock
                                  ----------------------------        Additional
                                                                        Paid-in         Retained        Treasury
                                       Shares         Amount            Capital         Earnings          Stock             Total
                                  -------------  -------------  ----------------- ------------------  -------------  ---------------
<S>                               <C>            <C>            <C>                  <C>              <C>             <C>

Balance, September 30, 1995           1,117,018     $   18,654        $ 4,685,793    $   (7,374,267)     $ (69,260)    $ (2,739,080)

Shares issued to cancel debt            140,817          2,352          2,756,309                 -              -        2,758,661

Shares issued in anticipation
     of acquisition                   1,700,000         28,390                  -                 -              -           28,390

Net loss                                      -              -                  -           (47,893)             -          (47,893)
                                  -------------  -------------  -----------------    ---------------  -------------   --------------

Balance, September 30, 1996           2,957,835         49,396          7,442,102        (7,422,160)       (69,260)              78

Shares issued for services               15,000            251                  -                 -              -              251

Net loss                                       -              -                 -               (45)             -              (45)
                                  -------------  -------------  -----------------    ---------------  -------------   --------------

Balance, September 30, 1997           2,972,835         49,647          7,442,102        (7,422,205)       (69,260)             284

Shares issued for services            2,040,000         34,068                  -                 -              -           34,068

Shares issued for purchase of
     oil and lease properties           386,000          6,446                  -                 -              -            6,446

Shares issued for cash                1,000,000         16,700                  -            (6,700)             -           10,000

Net loss                                     -              -                   -           (30,978)             -          (30,978)
                                  -------------  -------------  -----------------    ---------------  -------------  ---------------

Balance, September 30, 1998           6,398,835      $ 106,861        $ 7,442,102    $   (7,459,883)     $ (69,260)    $     19,820
                                  =============  =============  =================    ===============  =============  ===============
</TABLE>









                               See  accompanying  notes to financial statements.
                                                     F-5



<PAGE>







<TABLE>
<CAPTION>
                                              SIGNATURE MOTORCARS, INC.
                                              STATEMENTS OF CASH FLOWS
                                    Years Ended September 30, 1998, 1997 and 1996
<S>                                                            <C>                 <C>                <C>

                                                               ------------------  -----------------  ---------------
                                                                      1998               1997             1996
                                                               ------------------  -----------------  ---------------

Cash flows from operating activities:
       Net loss                                                  $       (30,978)   $           (45)   $     (47,893)
  Adjustments to reconcile net loss to net cash
       provided by (used in) operating activities:
          Shares issued for services                                      34,068                251                -
          Write-off of intangibles                                             -                  -           46,390

          Changes in operating assets and liabilities:
               Accrued liabilities                                         4,800                  -                -

               Net assets of discontinued operations                     (18,001)                 -                -

                                                               ------------------  -----------------  ---------------
               Net cash provided by (used in) operating                  (10,111)               206           (1,503)
               activities

Cash flows from financing activities:
  Issuance of common stock                                                10,000                  -                -

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

Net increase (decrease) in cash and cash equivalents                        (111)               206           (1,503)

Cash at beginning of year                                                    284                 78            1,581
                                                               ------------------  -----------------  ---------------

Cash at end of year                                             $            173   $            284   $           78
                                                               ==================  =================  ===============


Supplemental disclosure:
  Total interest paid                                           $          3,000   $              -   $            -
                                                               ==================  =================  ===============
</TABLE>








                                 See accompanying notes to financial statements.
                                                     F-6
<PAGE>


                            SIGNATURE MOTORCARS, INC.
                          Notes to Financial Statements
                        September 30, 1998, 1997 and 1996

1.  Summary of Significant Accounting Policies

    Description of Business

    Signature  Motorcars,  Inc. was incorporated in Nevada on February 19, 1969,
    as  International  Royalty  &  Finance  Co.  Prior to the  Company's  public
    offering in 1972, the Company  changed its name to  International  Royalty &
    Oil Co. In April 1996,  the Company's  controlling  interest was acquired by
    ExotiCar Rentals, Inc. and the name was changed to Signature Motorcars, Inc.


    During the year ended  September 30, 1998,  the Company began  acquiring oil
    and gas  properties  with the intention of  developing  the  properties  and
    becoming  an oil and gas  producer.  However,  with the  drop in oil  prices
    during the period,  the Company has decided to discontinue those operations.
    Accordingly,  the oil and gas operations are reported as discontinued in the
    accompanying  statement  of  operations  and the net oil and gas  assets are
    reported in the  accompanying  balance  sheet as net assets of  discontinued
    operations (see Note 8). The Company intends to distribute  these net assets
    to a newly formed  subsidiary  and spin-off the  subsidiary's  shares to the
    Company's  shareholders  in the near  future.  The  Company  has had nominal
    revenues from oil and gas activities.

    The  Company is  currently  considered  a "public  shell"  corporation  with
    nominal  business  operations  and is in the  process  of  searching  for an
    operating business with which to negotiate a "reverse merger."

    Basis of Presentation

    The Company's financial  statements have been presented on the basis that it
    is a going concern,  which  contemplates  the  realization of assets and the
    satisfaction of liabilities in the normal course of business.  The financial
    statements do not include any adjustments that might result from the outcome
    of this uncertainty.

    The Company has suffered  continuing  net losses from  operations  and has a
    deficit in working  capital as of September  30, 1998.  As explained  above,
    without a merger partner, the Company has nominal operations. The Company is
    dependant  on a  merger  partner  or  raising  additional  funds in order to
    provide capital for the Company to continue as a going concern.


                                      F-7
<PAGE>




                            SIGNATURE MOTORCARS, INC.
                          Notes to Financial Statements

1.  Summary of Significant Accounting Policies (Continued)

     Use of Estimates and Assumptions

     Preparation  of the  Company's  financial  statements  in  conformity  with
     generally  accepted  accounting  principles  requires  management  to  make
     estimates  and  assumptions   that  affect  certain  reported  amounts  and
     disclosures. Accordingly, actual results could differ from those estimates.

     Net Loss Per Common Share

     In March 1997, the Financial Accounting Standards Board issued Statement of
     Financial  Accounting  Standards No. 128,  Earnings Per Share ("SFAS 128").
     SFAS 128 provides a different method of calculating earnings per share than
     was formerly used in APB Opinion 15. SFAS 128 provides for the  calculation
     of basic and diluted earnings per share.  Basic earnings per share includes
     no  dilution  and is  computed  by  dividing  income  available  to  common
     stockholders  by the weighted  average number of common shares  outstanding
     for the period. Dilutive earnings per share reflects the potential dilution
     of securities that could share in the earnings of the Company.  The Company
     was required to adopt this standard in the fourth quarter of calendar 1997.
     Because the Company has no potential dilutive securities,  the accompanying
     presentation  is only of basic  loss per  share.  All  share  and per share
     amounts in the accompanying  financial  statements have been  retroactively
     restated as a result of a 1-for-21 reverse stock split in August 1996.

     Statement of Cash Flows

     For  statement  of cash flow  purposes,  the Company  considers  short-term
     investments  with  original  maturities  of three months or less to be cash
     equivalents.

     Income Taxes

     The Company  accounts  for income  taxes in  accordance  with  Statement of
     Financial Accounting Standards No.109, "Accounting for Income Taxes" ("SFAS
     109").  SFAS 109  utilizes  the asset  and  liability  method of  computing
     deferred income taxes.  The objective of the asset and liability  method is
     to  establish  deferred  tax  assets  and  liabilities  for  the  temporary
     differences  between the financial reporting basis and the tax basis of the
     Company's  assets and  liabilities  at enacted tax rates  expected to be in
     effect when such  amounts are  realized  or  settled.  Under SFAS 109,  the
     effect on deferred tax assets and  liabilities  of a change in tax rates is
     recognized in income in the period that includes the enactment date.


                                      F-8
<PAGE>


                            SIGNATURE MOTORCARS, INC.
                          Notes to Financial Statements

2.  Loan from Stockholders, Accrued Interest and Accounts Payable

     An agreement  was reached in June 1996,  in which loans from  stockholders,
     accrued  interest and compensation  payable (all  outstanding  debt) in the
     amount of  $2,758,661  were  exchanged  for new stock  amounting to 140,817
     shares after a 1:21 reverse stock split.

3.  Related Party Transactions

     On December 15, 1997, the Company sold 1,665,660  shares of Black Giant Oil
     Company for $25,000 to a  shareholder  of the  Company.  The Company had no
     cost basis in the shares; therefore a gain of $25,000 was recorded.

4.  Stock Issued for Services

     During 1998 and 1997,  the Company  issued common stock to certain  related
     parties,  valued at estimated fair market value, for services  performed on
     behalf of the  Company.  The  shares  issued  and value of those  shares at
     September 30 are as follows:

                          Shares Issued                       Value
                          -------------                     -----------
         1998                2,040,000                        $34,068
         1997                   15,000                            251

5.  Income Taxes

    At September  30, 1998,  the Company had net  operating  loss  carryforwards
    totaling approximately  $6,539,391 available to reduce future taxable income
    through  the year 2011.  Due to changes  in  control of the  Company,  these
    carryforwards are limited on an annual basis.

6.  Acquisition

    During 1996, the Company  purchased a company for 1,700,000 shares of common
    stock.  The stock was valued at its estimated  fair market value of $28,390.
    It was later  determined  that the  investment  did not have any  continuing
    value and was written off during the year ended September 30, 1996.

7.  Commitments and Contingencies

    Concentration of Credit Risk

    The  Company  invests  its cash and  certificates  of deposit  primarily  in
    deposits with major banks.  The Company has not incurred  losses  related to
    its cash.


                                       F-9
<PAGE>




                            SIGNATURE MOTORCARS, INC.
                          Notes to Financial Statements

7.  Commitments and Contingencies (Continued)

    Fair Value of Financial Instruments

    The  following   disclosure  of  the  estimated   fair  value  of  financial
    instruments  is made in accordance  with the  requirements  of SFAS No. 107,
    Disclosures  about Fair Value of Financial  Instruments.  The estimated fair
    value amounts have been determined by the Company,  using  available  market
    information and appropriate valuation methodologies.

    The fair value of  financial  instruments  classified  as current  assets or
    liabilities  including  cash  and  cash  equivalents  and  accounts  payable
    approximate   carrying  value  due  to  the   short-term   maturity  of  the
    instruments.

8. Discontinued Operations

As  explained  in Note  1,  the net  oil  and  gas  assets  of the  discontinued
operations  are  reported  in the  accompanying  balance  sheet as net assets of
discontinued  operations  as of September  30,  1998.  Following is a summary of
these net assets:

         Assets:
                  Troell lease                    $    50,272
                  Spires wells                          4,175
                                                      -------
                           Total Assets                54,447

         Liabilities:
                  Note payable to an individual       (30,000)
                                                      -------
                           Net Assets             $    24,447
                                                      =======

   The $30,000 note payable to an individual was due on May 16, 1998 and accrues
interest at 12%.


                                      F-10