U.S.SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10KSB40


ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF 1934


                   For the Fiscal Year Ended December 31, 1996



Commission File Number: 0-19170

                            JUNIPER GROUP, INC.
                 (Name of small business issuer in Its Charter)

      New York                                 11-2866771
(State or other jurisdiction of     (I.R.S. Employer Identification Number)
incorporation or organization)

111 Great Neck Road, Suite 604,
Great Neck, New York                            11021
(address of principal executive offices)      (Zip Code)

Registrant's Telephone Number, including area code:    (516) 829-4670

Securities registered pursuant to Section 12(b) of the Exchange Act: NONE

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

                              Title of Each Class:
                    Common Stock (par value $.001 per share)
      12% Non-Voting Convertible Redeemable Preferred Stock $.10 par value
                           Redeemable Class A Warrants
                           Redeemable Class B Warrants

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or Section 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter period that  Registrant was required to file such
reports)  and (2) has been subject to such filing  requirements  for the past 90
days. YES X NO

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

State issuer's revenues for its most recent fiscal year. - $2,503,188.

The  aggregate  market value of the Common Stock held by  non-affiliates  of the
Registrant was  approximately  $2,420,000  based upon the $0.16 closing price of
these shares on the NASDAQ Stock Market as of March 17, 1997.

As of March 17, 1997, there were 19,614,493  outstanding shares of Common Stock,
$.001 par value per share.



<PAGE>

                                     PART I


ITEM 1. DESCRIPTION OF BUSINESS

A.       Business Development

     Juniper Group,  Inc.  (formerly  Juniper Features Ltd., the "Company") is a
New York Corporation. Its principal businesses are composed of two (2) segments,
healthcare  and  entertainment:  (i) the  healthcare  operations  are  conducted
through two subsidiaries of Juniper Medical Systems,  Inc. ("JMSI"),  which is a
wholly owned subsidiary of the Company: (a) PartnerCare,  Inc. ("PCI",  formerly
Diversified Health Affiliates, Inc.), a managed care revenue enhancement company
providing  various types of services  such as:  Physician  Practice  Management,
Managed  Care  Revenue  Enhancement,  Comprehensive  Pricing  Reviews,  MSOs and
Liability   Assessment  Programs  to  newly  evolving  integrated  hospital  and
physician  markets  and  (b)  Juniper  Healthcare   Containment  Systems,   Inc.
("Containment"),  which develops and provides full service  healthcare  networks
for insurance companies and managed care markets in the Northeast U.S.; and (ii)
the  entertainment  segment is conducted  principally  through Juniper Pictures,
Inc.  ("Pictures"),  a wholly owned  subsidiary of Juniper  Entertainment,  Inc.
("JEI"),  a  wholly  owned  subsidiary  of the  Company,  which  engages  in the
acquisition,  exploitation  and  distribution  of rights to films to the various
media  (i.e.,  home video,  pay-per  view,  pay  television,  cable  television,
networks and  independent  syndicated  television  stations) in the domestic and
foreign marketplace.  The Company's operations are based at 111 Great Neck Road,
Suite 604, Great Neck, New York 11021.

     The  Company  was  incorporated  in July 1987 and  commenced  entertainment
operations in January 1988. In late 1991, the Company  recognized an opportunity
to expand into  healthcare,  and in December  1991,  JMSI,  acquired  all of the
outstanding capital stock of PCI. Containment  commenced operations in September
1992.  Containment operates its business from the Company's Great Neck location.
PCI  operates  its  business  from  its Boca  Raton,  Florida  location  and the
Company's Great Neck location.

     During the second quarter of 1996, the Company took several actions that it
believes will improve the results of its hospital revenue enhancement management
business. It changed the name of its subsidiary that conducts that business from
Diversified Health Affiliates,  Inc. to PCI. The Company believes that this name
better  characterizes  the  nature of the  relationship  sought to be  developed
between PCI and the hospitals that it serves.  In addition,  PCI determined that
it was  necessary to  aggressively  and  strategically  redirect its efforts in
order to pursue new managed  care  markets  and  initiatives.  To that end,  PCI
replaced its president  with a new  president,  whose  management  and marketing
skills and extensive  experience in the managed care field will, in management's
opinion, better serve its needs.

     In February  1997, at the Company's  annual  meeting of  shareholders  (The
"Annual Meeting"),  the shareholders approved a proposal to change the Company's
state of incorporation  from New York to Nevada.  Reincorporation in Nevada will
allow the Company to take  advantage of certain  provisions of the corporate law
of Nevada but will not result in any change in the business, management, assets,
liabilities or net worth of the Company.

     In order to effect the  Company's  reincorporation  in Nevada,  the Company
will be merged  into a newly  formed,  wholly-owned  subsidiary  of the  Company
incorporated in Nevada. The Nevada subsidiary,  named Juniper Group, Inc., which
was formed on January  22,  1997,  has not engaged in any  activities  except in
connection with the proposed transaction.

     In addition,  at the Annual Meeting the shareholders approved amendments to
the  Certificate of  Incorporation  of the Company (1) to change the name of the
Company from Juniper Features Ltd. to Juniper Group,  Inc.; (2) to eliminate the
preemptive  rights of the  holders  of the  Company's  common  stock (see Item 6
Management's  Discussion and Analysis or Plan of Operation);  (3)to increase the
authorized  common stock of the Company from  20,000,000 to 300,000,000  shares;
and (4) to require  the vote of  holders  of 80% of the  issued and  outstanding
shares of common stock to approve certain business combinations.

     The  shareholders  also approved an amendment to the By-Laws of the Company
to  provide  for  a  pre-takeover  notification  requirement  and  approved  the
Company's 1996 Stock Option Plan.

B.       Business of Issuer

         (i)  Healthcare Cost Containment Services and Revenue Enhancement

                  (a)  Healthcare Cost Containment Services

     Containment is a provider of healthcare cost containment services for third
party  healthcare  payors.  Containment  provides  its clients  with  savings on
hospital expenditures through a geographically tailored network of high-quality,
cost-effective  healthcare  providers.  In  addition,  Containment  provides its
clients with timely, informative data claims analysis and reporting. Containment
assists  third  party  healthcare  payors,   including  group  health  insurance
companies,  in  reducing  their  costs  associated  with the  delivery of health
services. Containment has arrangements with networks of healthcare providers and
facilities  (preferred  provider  organizations, "PPO's") that agree to discount
their  charges  in return for prompt  payment  and access to a higher  volume of
patients. Group health insurance companies agree to channel their enrollees to a
preferred provider organization  network,  resulting in lower insurance premiums
to their clients.  Containment provides  supervision through  sub-contractors to
ensure that the appropriate and necessary  medical  services are provided to the
patient in a cost effective  manner.  Containment  also provides  health network
coverage to its insurance clients and their enrollees.

     Based upon data  generated by the healthcare  industry and U.S.  Government
sources,  healthcare expenditures have increased from $249 billion in 1980 (9.1%
of gross  national  product) to an estimated  $700 billion in 1990 (12% of gross
national product). It is anticipated that healthcare expenditures will exceed $1
trillion in the year 2000.  Employers,  who paid an  estimated  $165  billion in
healthcare  costs for their employees in 1989, have taken steps to control their
rapidly  escalating  healthcare  costs.  Many have  modified  their  traditional
insurance  coverage or made  available to their  employees  the  opportunity  to
participate  in HMOs and PPOs.  Many  employers have also elected to self-insure
the cost of providing healthcare benefits to their employees,  thereby providing
an opportunity to reduce costs. This has also enabled them to take a more active
role in managing healthcare benefits and costs. In response to the trend towards
self-insurance  and increasing  competition  from HMOs and PPOs, group insurance
carriers have sought to control premium  increases  through the adoption of cost
containment programs.

     Independent PPO cost management firms, such as Containment,  offer numerous
programs  designed to meet these collective  objectives.  PPO services have only
recently been offered on a commercially  significant  scale by independent firms
which are engaged  primarily in providing these types of services.  The industry
is currently highly fragmented with numerous independent firms providing medical
utilization  review and PPO  services,  the vast  majority of which provide such
services on a regional or local level.

     Since 1992,  Containment  has had an on-going  agreement  with The Guardian
Life Insurance Company ("Guardian"), whereby Containment is paid a percentage of
the savings it generates for the insurance  company.  Containment  provides this
service for Guardian in New Jersey and Connecticut.

     The  Company  has,  over the past  several  years,  worked  closely  with a
healthcare professional to bring the Company both health insurance company group
plan customers,  as well as, professional healthcare providers and networks. The
healthcare  professional has assisted in arranging the relationships between the
Company,  the Guardian,  and the network of providers  currently  under contract
with Containment.

     The agreement with the healthcare  professional for his services  continues
until  December 31, 1997 and provides  that the Company will pay the  healthcare
professional  commissions at varying rates and grant options to purchase  common
stock if certain  contract  renewals are realized or certain  revenue levels are
achieved.  Based upon the contracts existing as of December 31, 1996 and through
the remaining term of the contracts, should certain financial goals be achieved,
the healthcare  professional has a total potential of receiving 1,550,000 common
share purchase  options at exercise  prices varying from $.19 to $.50 per share.
At December 31, 1996, none of the options was granted.

     In 1996, the Company agreed with the healthcare  professional to reorganize
the manner in which its business  with health  insurance  company group plans is
structured.  The purpose of this  reorganization  was to provide new services to
healthcare  insurance  companies.  This  change,  which  occurred in early 1996,
resulted  in  conducting  such  business in the form of a joint  venture  with a
Company affiliated with the healthcare professional.

         (b)  Managed Care Revenue Enhancement Program ("MCREP")

     In 1996,  the  country  experienced  an  explosive  growth of managed  care
markets.  In  order  to  address  the  opportunities  fostered  by  this  trend,
management  embarked on a number of critical  initiatives which would reposition
and reengineer the nature and direction of the Company's  managed care business.
First the Company changed its  subsidiary's  name to PCI to better  characterize
the  relationships it would seek among itself,  the hospitals and the integrated
networks it would serve.

     PCI  also  recruited  new  leadership,  including  a new  President,  whose
management,  marketing  skills and  experience  in the managed care  marketplace
would better serve the future  needs and  direction of the Company.  The Company
then pursued a series of  initiatives  which has produced new product  lines and
eliminated   those  which   demonstrate   poor  sales   opportunities   or  were
unprofitable.  It moved  out of the  Diagnostic  Related  Groups  ("DRG")  audit
business and became a Managed Care Revenue Enhancement company.

     PCI has  developed  a  comprehensive  program  that  addresses  the  entire
spectrum of business and revenue  issues  pertaining to the  hospital's  managed
care relationships.  PCI ensures that hospitals obtain all the dollars that they
are entitled to under their managed care agreements.

     PCI's program also includes the profiling of managed care contracts and the
performance  benchmarking of these agreements.  PCI validates whether or not the
projected  financial value anticipated from these  arrangements can be obtained.
PCI's  assessments  include line item audits of claims  generated  through these
relationships,  as well as trending  reviews to identify,  and document  "Silent
PPO" activity.  PCI also  identifies  managed  care  claims  that have not been
properly  paid, or have been  written-off . PCI then actively  pursues payors to
expedite payments to the hospital for rebilled claims.

     This  transition  has given the  Company a new  opportunity  to service the
growing  number  of  hospitals  and  integrated  networks  that are  facing  the
complexities associated with managed care contracts.  These relationships result
in payment  errors on claims  and  non-compliance  issues  that  foster  sizable
revenue  losses to hospitals.  PCI's new product lines target these problems and
provides  services  which  recapture  loss  revenue in this two hundred  billion
dollar industry.

     The  vision  of the  Company's  new  direction  has  been  complemented  by
management's  commitment to developing a growing  relevance in evolving  managed
care  markets and  meeting  the needs of its new  clients.  PCI  emphasizes  the
importance of maintaining an atmosphere of customer  support and appreciates the
need to meet client needs in an unobtrusive manner. PCI's staff of professionals
come  from  the  insurance  and PPO  industries  and are also  sensitive  to the
importance of payor relationships.

     PCI's MCREP business consists of the essential ingredients needed to assist
hospitals in maximizing the business value of their managed care contracts.  The
components of this Program are as follows:

1) Managed Care Contract Compliance

     PCI  identifies  all managed  care  contracts  and  benchmarks  performance
requirements  for each  contract.  Its clients are provided with  comprehensive,
easy to read profiles of the managed care contracts in the hospital's portfolio.
PCI evaluates claims actively  generated by each payor for contract  compliance.
Per diems and percentage  discounts  taken by payors are validated in accordance
with hospital expectations. MCREP provides the hospital with an immediate source
of  additional  revenue from closed  accounts.  MCREP becomes a second filter of
claims  adjudication.  The quality process results in a correct bill and assures
the hospital that all revenue due is properly billed.

2) Line Item Reviews and Administration

     PCI's team identifies and recovers all charges overlooked subsequent to the
presentation of the final hospital bill, as well as reviews previously submitted
claims. PCI's unique Line Item Reviews  simultaneously match units of service to
the medical  record  documentation  at the time of discharge.  Line Item Reviews
identify  the claims under and over charged by the payor.  While  reviewing  the
bills,  PCI is  simultaneously  auditing  the  medical  records.  This  critical
component  of the Managed  Care  Revenue  Enhancement  Program  also serves as a
quality  assurance  review of the  hospital's  medical  records.  By ensuring an
accurate final bill for submission to the insurance company, the hospital avoids
additional billing and collection expenses.

     (c) Comprehensive Pricing Review

     CPR encompasses CPT-4/HCPCS Charge Master updates, CPT-4/HCPCS Optimization
Reviews  and  Comprehensive  Pricing  Strategies  as well as UB 92 Revenue  Code
Validation.  The purpose of CPR is to evaluate the quality of Outpatient  coding
and determine the effect on hospital  reimbursement.  As part of the  outpatient
coding  validation,  PCI  reviews a cross  section  of  records  comprised  of a
sampling from ambulatory  surgery,  outpatient  services and the emergency room.
Hospitals are then provided with a detailed  report which  identifies  trends in
lost  revenues.  This  provides  the  hospital  with the  opportunity  to obtain
anticipated  revenue  from  the  initial  claim  while   simultaneously   saving
additional re-billing expenses.


     PCI'steam of reimbursement  specialists  apply specific codes to applicable
claims,  eliminating  unlisted  code denials on the  hospital's  Explanation  of
Benefits.  PCI also works  closely  with the  hospital's  departments  utilizing
surgical  intervention  codes ensuring that services are listed and  identifying
allowable unbundling to maximize reimbursement.

     (d) Liability Assessment Program

     LAP is designed  to minimize  financial  losses  from  insurance  companies
audits  of  patient  bills.  PCI's  analysts  identify  and  analyze  trends  in
overcharges by contract,  by payor,  by claim and by  department.  Hospitals are
able to evaluate the  efficiency  of their  billing  system  utilizing  the data
provided by PCI.

Competition

     Although its MCREP services are significantly  different from those offered
by other  hospital  consulting  services,  the Company  competes for  consulting
business primarily with  revenue-optimization  services  companies.  The Company
competes  for its MCREP  clients  by  distinguishing  its  services  from  those
provided by revenue optimization  service companies,  which generally do not use
benchmark  performance  levels of managed care agreements or target "Silent PPO"
practices as does the Company. Approximately 500 companies of varying size offer
revenue-optimization  services  that  may be  considered  competitive  with  the
Company.  Competitors  include the  healthcare  consulting  practice of Anderson
Consulting,  the Gailer Advisors,  Inc., Iameter, MC Strategies,  Inc., National
Coding  Services,  Inc.,  Quality Medical  Consultants,  Inc., and J.A. Thomas &
Associates,  Inc.  Most of these  firms have  substantially  greater  financial,
technical, marketing and management resources than the Company. The Company does
not believe that any single company commands  significant market share.  Larger,
more established  consulting firms have an enhanced competitive position, due in
part to  established  name  recognition  and direct  access to hospital  clients
through the provision of other services.  Small firms,  although not necessarily
offering those particular services  comparable to those of the Company,  compete
on the basis of price.

     The  managed  care  industry is highly  competitive.  The  Company's  MCREP
programs  will compete with other  providers of healthcare  services,  including
regional groups as well as national firms. Based upon these competitive factors,
the Company believes that it will be able to compete successfully in the markets
by adhering to its business  strategy,  although  there can be no assurance that
the Company will be able to compete successfully.

Sales and Marketing

     The  Company's  1996  growth  initiative  has also  driven  new  sales  and
marketing strategies, resulting in a growing interest in PCI's new product lines
which  capture  unrecovered  dollars that  hospitals are entitled to under their
managed  care  agreements.  The  initiatives  have  also been  received  well by
national hospital chains,  regional hospital networks, and larger hospitals that
have numerous  managed care contracts.  Targeted sales efforts to these entities
became a primary focus in 1996. In most cases hospital  chains  required  timely
procedures  requiring corporate due diligence and preferred vendor certification
prior to accessing their member hospital.  Efforts have been underway to address
these   requirements   which,   when   completed,   will  foster  greater  sales
opportunities.

     In addition to the above sales and marketing  efforts,  new initiatives are
also  underway  targeting  geographic  markets  which  are  characterized  by an
accelerated  growth of the managed care  industry.  Specifically,  resources and
sales  efforts were  invested  into  developing  both the Florida and New Jersey
markets.   This  included   numerous   meetings  with  corporate   officers  and
representatives of hospital chains that have a large presence in Florida.  These
markets  represent  a great  deal of  opportunity  since  managed  care  revenue
represents a major  revenue  source to hospitals  within these areas,  sometimes
close to or exceeding 50%.

         (ii)     Entertainment

     Pictures is engaged in the distribution of films through  licensing to home
video,  pay-per-view,  pay-cable,  and  commercial  television  broadcast  media
domestically as well as in foreign markets.  Pictures has exclusive distribution
rights to eighty-one  (81) films in various media within  various  international
markets.

     During 1996 and 1995,  the Company  significantly  curtailed its efforts in
the  distribution  of film  licenses  to commit and focus its  resources  on the
growth of the healthcare segment,  which during that time was, and currently is,
the most  efficient  and cost  effective  strategy  for the  Company to maximize
revenue.   In  1997,  the  Company  will  continue   directing   efforts  toward
reestablishing  a foothold in the film  industry.  The Company  expects to begin
recognizing growth in revenues from the sale of film licenses in 1997.

     Pictures  acquires  worldwide rights to films which are saleable to various
markets.  In acquiring the rights to a film,  Pictures analyzes the viability of
the product for  distribution in an effort to target the film's audience appeal.
Armed with its analysis,  Pictures markets the film, using sales representatives
and the efforts of its officers,  to the various media in a selective manner. In
addition,  Pictures  aids the media to which it markets its films by producing a
strategy   for   the    presentation    of   the   film,    with   a   view   to
programming/counterprogramming  against competitive media in the same market and
skewing a film to the proper demographic  population (i.e., female, male, child,
teenager  and  middle  age) in  order to  produce  the  most  favorable  outcome
regarding ratings and advertising revenue.

     Pictures   acquires  its  film  rights  from  independent  film  production
companies.  Pictures monitors the industry for available films, concentrating on
content,  quality,  theme, actors and actresses,  plot, format and certain other
criteria to determine the film's  suitability for the home video,  pay-per-view,
pay/cable  and  commercial  media to which  Pictures  markets its product,  both
domestically and internationally.

     Pictures  markets its product through its sales  representatives,  who also
assist Pictures at domestic and  international  trade shows to market  Pictures'
film library.

     Pictures acquires domestic and/or foreign  distribution rights to films for
a license period that typically spans between 10 and 20 years, during which time
Pictures has the right to distribute  such films in various  media  (video,  pay
cable,  syndication and free T.V.).  Pictures earns a distribution fee, which is
based upon a percentage of gross receipts received for the license. In addition,
the Company recoups its expenses incurred in making the sale (i.e. market costs,
travel and  entertainment,  advertising,  fax, phone,  mail,  etc.),  along with
recouping any advances  made to producers  upon signing or within a fixed period
of time thereafter (minimum  guarantee) from the gross receipts.  The balance of
gross  receipts  after such  recoupment  is paid to the  producer.  Any  minimum
guarantees paid to the producer are payable over a period of 3-8 years.

Competition

     Competition is intense in the motion  picture  distribution  industry.  The
Company is in  competition  with other motion  pictures  distribution  companies
including  many which  have  greater  resources  than the  Company,  both in the
acquisition of  distribution  rights to movie  properties and the sales of these
properties to the various markets (ei. pay, cable and television).

Major Customers

     In 1996, Guardian accounted for 75% of the total revenue of the Company. In
1995,  Guardian accounted for 83% of the total revenue of the Company.  The loss
of the  contract  with  Guardian  would  have a material  adverse  effect on the
operations of the Company. However, the Company is pursuing contracts with other
insurance  companies,  which if successful,  may reduce the Company's dependence
upon Guardian.

     The  Entertainment  segment  of  business  is not  dependent  upon  any one
significant customer.

Employees

     As of March  17,  1997,  the  Company  had 9  full-time  employees.  Of the
full-time  employees,  7 work at the  Company's  offices,  and 2 work at  client
premises.

ITEM 2.  DESCRIPTION OF PROPERTY

     The  Company's  executive,  healthcare  and film  distribution  offices are
located at 111 Great Neck Road,  Suite 604,  Great Neck,  New York  11021.  This
property  consists  of  2,026  square  feet of  offices  and is  subleased  from
Entertainment  Financing  Inc.("EFI"),  an  entity  affiliated  with  the  Chief
Executive  Officer of the Company,  currently at $4,263 per month.  EFI's lease,
and the Company's sublease on this space expires on May 31, 2002. EFI has agreed
that for the term of the sub-lease the rent paid to it will be substantially the
same rent that it pays under its master lease to the landlord.  In addition,  in
January 1995, the Company opened an office in Boca Raton, Florida. This property
consists of 1900 square feet of offices and is sub-leased from EFI Funding, Ltd.
("Funding"),  an entity  affiliated  with the  Chief  Executive  Officer  of the
Company,  currently  at $1,150  per  month.  Funding's  lease and the  Company's
sublease on this space expires on November 30, 1997. Funding has agreed that for
the term of the  sub-lease  the rent paid to it will be  substantially  the same
rent that it pays  under its  master  lease to the  landlord.  Minor  additional
charges  are made by EFI and  Funding  to the  Company  to cover  administrative
costs.

ITEM 3. LEGAL PROCEEDINGS

     In December  1996, an action was filed in the Superior Court of New Jersey,
by MediChoice Network,  Inc. against  Containment,  for damages in the amount of
approximately  $197,000.  The claim alleges failure to pay for services provided
under a  contract.  A default  judgment  in the amount of  $197,000  was entered
against the Company for  failure to answer the  original  complaint  in a timely
fashion. An application is currently pending to vacate the default.  The Company
believes  it is  entitled  to damages  against  the  Plaintiff,  and that it has
meritorious  defenses to the claim,  but it intends to seek a settlement of the
matter.

     In February  1997, a law firm  commenced an action against each of Pictures
and PCI. The actions seek damages for legal services  aggregating  approximately
$13,600.  Concurrently,  the Company became aware of an unasserted  claim by two
shareholders  of  the  Company,  one  of  whom  is  the  spouse  of  one  of the
claimant-attorneys,  for  damages  for alleged  stock  manipulation.  Management
believes that the allegations  are without merit and will vigorously  defend any
such claim.  Currently,  the Company is engaged in  settlement  negotiations  to
resolve all three matters and avoid unnecessary litigation expenses.

     In May 1995,  Ted  Lichtenheld  commenced an action against the Company and
others in the United  States  District  Court for the  Southern  District of New
York,  seeking  damages  in the  amount  of  $100,000  for each of the seven (7)
alleged acts of willful infringement,  or in the alternative $20,000 for each of
the seven (7) alleged acts for unintentional infringement,  plus a return of the
film,  together  with  attorney's  fees in  connection  with the motion  picture
"Personal  Foul."  Lichtenheld  alleged  that he licensed  the picture to Double
Helix Films, Inc. ("Helix") and that, pursuant to that license agreement,  Helix
failed to make payment to  Lichtenheld.  It is further alleged that by reason of
Helix's  breach of the  agreement,  all rights  granted to Helix had reverted to
Lichtenheld. Lichtenheld's claim against the Company is based upon the Company's
distribution of the picture  (pursuant to the sub-license  from Helix) after the
purported  termination  of the  license  to Helix.  The  Company  is  vigorously
defending the action and asserts that under Lichtenheld's  agreement with Helix,
the reversion did not affect the Company's rights to the picture.

     On May 22, 1996, Ordinary Guy, Inc. and Crow Productions, Inc. commenced an
action  against the  Company,  its CEO and an affiliate of the CEO in the United
States  District Court for the Eastern  District of New York seeking  damages in
the amount of $464,470.50, plus interest alleging that the Company has successor
liability  for a  judgment  entered in March of 1993 by the  Plaintiffs  against
Juniper Releasing,  Inc. ("Releasing"),  a company affiliated with the Company's
CEO.  It is  alleged  that the  Company  was  formed in 1989 as a  successor  to
Releasing and that the Company and others transferred assets out of Releasing to
avoid the payment of Releasing's creditors.  The Company is vigorously defending
the  allegations and has asserted that the claims are without merit and are time
barred.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters  submitted to a vote of security  holders  during the
fourth quarter of the fiscal year ending December 31, 1996.


                                     PART II


     ITEM 5. MARKET FOR THE REGISTRANT'S  COMMON EQUITY AND RELATED  STOCKHOLDER
MATTERS

     The  Company's  common  stock,  Class A Warrants  and Class B Warrants  are
traded on the National  Association  of Securities  Dealer  Automatic  Quotation
System  ("NASDAQ")  Small Cap  Market,  under the  symbols  "JUNI",  "JUNIW" and
"JUNIZ" respectively.  The Company's 12% Convertible  Redeemable Preferred Stock
("Preferred  Stock")  is traded in the  Over-the-Counter  Market on the NASD OTC
Bulletin Board. The following  constitutes the high and low sales prices for the
common  stock,  the Class A Warrants  and the Class B Warrants  as  reported  by
NASDAQ for each of the  quarters of 1995 and 1996.  The  quotations  shown below
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions.

                 1995                              HIGH               LOW

FIRST QUARTER
Common Stock .............................         0.359              0.109
Class A Warrants .........................         0.125              0.078
Class B Warrants .........................         0.125              0.078

SECOND QUARTER
Common Stock .............................         0.297              0.109
Class A Warrants .........................         0.078              0.078
Class B Warrants .........................         0.078              0.078

THIRD QUARTER
Common Stock .............................         0.578              0.203
Class A Warrants .........................         0.094              0.078
Class B Warrants .........................         0.094              0.078


FOURTH QUARTER
Common Stock .............................         0.906              0.172
Class A Warrants .........................         0.266              0.078
Class B Warrants .........................         0.141              0.078


                1996                               HIGH               LOW

FIRST QUARTER
Common Stock .............................         0.875              0.188
Class A Warrants .........................         0.125              0.125
Class B Warrants .........................         0.125              0.125

SECOND QUARTER
Common Stock .............................         0.344              0.188
Class A Warrants .........................         0.125              0.125
Class B Warrants .........................         0.125              0.125

THIRD QUARTER
Common Stock .............................         0.375              0.125
Class A Warrants .........................          (1)                (1)
Class B Warrants .........................          (1)                (1)


FOURTH QUARTER
Common Stock .............................         0.219              0.031
Class A Warrants .........................         0.125              0.125
Class B Warrants .........................         0.125              0.125


     (1) Issue did not trade

     Preferred  Stockholders  are  entitled  to  receive  out of assets  legally
available  for  payment a dividend  at a rate of 12% per annum of the  Preferred
Stock  liquidation  preference  of $2.00 (or $.24 per annum) per share,  payable
quarterly  on March 1, June 1,  September 1 and December 1, in cash or in shares
of Common Stock having an equivalent fair market value.  Unpaid dividends on the
Company's  Preferred Stock cumulate.  The quarterly  payments due on September 1
and December 1, 1992,  and all payments due in 1993,  in 1994,  in 1995  and in
1996  and the  payment  due on  March 1,  1997  have not yet been  paid and are
accumulating.  These dividends have not been declared  because earned surplus is
not available to pay a cash dividend.  Accordingly,  dividends  will  accumulate
until such time as earned surplus is available to pay a cash dividend or until a
post  effective  amendment to the Company's  registration  statement  covering a
certain  number of common  shares  reserved for the payment of  Preferred  Stock
dividends is filed and declared  effective,  or if such number of common  shares
are  insufficient  to pay cumulative  dividends,  then until  additional  common
shares are  registered  with the Securities and Exchange  Commission  (SEC).  No
dividends  shall be declared or paid on the Common  Stock (other than a dividend
payable  solely  in  shares  of  Common  Stock)  and no  Common  Stock  shall be
purchased,  redeemed or acquired by the Company unless full cumulative dividends
on the Preferred  Stock have been paid or declared,  or cash or shares of Common
Stock have been set apart which is sufficient  to pay all  dividends  accrued on
the Preferred Stock for all past and then current dividend periods.

     As stated above,  pursuant to the terms of the Preferred Stock, the Company
has the option of making quarterly dividend payments in cash or shares of Common
Stock. The Company does not intend to make any Preferred Stock dividends in cash
in the foreseeable future.  Prospectively,  subject to the Company's  Prospectus
being current,  and a sufficient  number of common shares being  registered with
the SEC, the Company anticipates making quarterly dividend payments in shares of
Common  Stock  for the  foreseeable  future  including  the  quarterly  dividend
payments which were due on September 1 and December 1, 1992; and all payment due
in 1993; in 1994;  in 1995,  in 1996 and March 1, 1997,  which have not yet been
paid. The total cash value of the arrearage of unpaid dividends is $269,000.

     The Company has not  declared  cash  dividends on its Common Stock and does
not  intend  to do so in  the  foreseeable  future.  If  the  Company  generates
earnings,  management's  policy is to retain such earnings for further  business
development.  It plans to maintain  this policy as long as  necessary to provide
funds for the Company's  operations.  Any future  dividend  payments will depend
upon the full payment of Preferred  Stock  dividends,  the  Company's  earnings,
financial  requirements and other relevant factors,  including  approval of such
dividends  by the Board of  Directors.

     As of  March  17,  1997,  there  were 166  shareholders  of  record  of the
Company's common stock, excluding shares held in street name.

     As of December  31, 1996,  the Company has  approximately  116,800  Class A
Warrants  outstanding.  Each Class A Warrant entitles the holder to purchase, at
any time through May 1, 1997 (at which time they  expire),  one common share and
one Class B  Warrant  at a price  equal to $2.50,  subject  to  adjustment.  The
Company has authorized the issuance of Class B Warrants to purchase an aggregate
of  300,000  shares of Common  Stock,  of which it has  issued  183,200  Class B
Warrants  upon the exercise of Class A Warrants.  Each Class B Warrant  entitles
the holder to  purchase,  at any time  through  May 31, 1998 (at which time they
expire), one common share at a price equal to $5.00, subject to adjustment.

Recent Sales of Unregistered Securities

     In February  1996 the Company sold 40,000  shares of the  Company's  common
stock upon the exercise of options issued to a consultant  under section 4(2) of
The Securities Act of 1993, as amended, for $10,000, or $0.25 per share.

     In February 1996,  the Company sold 500,000 shares of the Company's  common
stock upon the  exercise of options  issued to  non-U.S.  persons in an offering
under Regulation S for $100,000, or $0.20 per share.

     In March 1996,  the Company sold  687,000  shares of the  Company's  common
stock upon the  exercise of options  issued to  non-U.S.  persons in an offering
under Regulation S for $107,344, or $0.16 per share.

     In September 1996, the Company sold 400,000 shares of the Company's  common
stock upon the  exercise of options  issued to  non-U.S.  persons in an offering
under Regulation S for $50,500 or $0.13 per share.

ITEM 6.  MANAGEMENT'S  DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

RESULTS OF OPERATIONS

Fiscal Year 1996 vs Fiscal Year 1995

     The Company's  revenues  decreased to $2,503,000 in 1996 from $3,596,000 in
1995, representing a 30% decrease.

     Revenue related to the Healthcare  segment decreased to $2,389,000 in 1996,
from  $3,586,000 in 1995,  representing a 33% decrease.  The decrease in revenue
during 1996 was  predominately  attributed to Containment,  which had revenue of
$1,872,000 in 1996,  compared to revenue of $2,992,000 in 1995. This decrease is
largely  attributed  to a decline in claims  processed.  This is a result of the
following three factors: (1) a reduction in indemnity claims due to the national
trend in the  markets  toward  managed  care;  (2) a  reduction  in claims to be
repriced from Containmen's major client. This facilitated the client's decision
to rapidly  process a backlog of claims  rather  than delay  their  payment,  by
having Containment  reprice such claims and avail themselves of greater savings;
and (3) a new joint venture  arrangement which replaces  Containment's  previous
arrangement and results in lower gross revenue, but substantially  greater gross
profit  margins.  PCI's revenue  decreased to $516,000 in 1996, from $594,000 in
1995.  This was the result of PCI's change in direction from a DRG audit company
to a Managed Care Revenue Enhancement company.

     Revenue related to entertainment increased to $115,000 in 1996 from $10,000
in 1995. This increase is largely attributable to the Company's marketing of its
film licenses.

     Operating  costs decreased to $1,319,000 in 1996 from $2,339,000 in 1995, a
44% decrease.  The Healthcare  operating  costs  decreased to $1,259,000 in 1996
from $2,333,000 in 1995, a 46% decrease.  As a percentage of revenue,  operating
costs for the Healthcare segment decreased to 53% in 1996 from 65% in 1995.

     Operating costs for  Entertainment  include film amortization and producers
royalties.  Where the  Company  acquires  licensing  rights  through  guaranteed
payments,  it records such guarantees on its balance sheet.  The amortization of
such  licensing  rights is  calculated  under  the film  forecast  method.  Film
amortization   represents   amortization  of  the  original   acquisition  price
capitalized on the balance sheet.  Producers  royalties  reflect current amounts
due  producer's  for their  share of current  revenue  for films with no minimum
guarantee obligation.

     Selling,  general and  administrative  expenses  increased to $1,875,000 in
1996 from  $1,433,000  in 1995, a 31%  increase.  The  significant  increases in
selling, general and administrative expenses were: Bad Debt Expense of $199,000;
Legal Expense of $131,000;  Office  Expense of $46,000;  Commissions of $21,000;
Rent of $19,000;  and Insurance Expense of $19,000.  These increases were offset
by decreases in:  Director's  Compensation of $48,000;  and Interest  Expense of
$36,000.

LIQUIDITY AND CAPITAL RESOURCES

     The  Company  had a working  capital  deficiency  at  December  31, 1996 of
$360,000.  The ratio of  current  assets  to  current  liabilities  was .74:1 at
December  31,  1996.  Cash flow used by  operating  activities  during  1996 was
$127,000.

     The Company has no material  commitments  for capital  expenditures  or the
acquisition  of films.  If cash flow  permits,  however,  the  Company  plans to
enhance its information system  capabilities to more efficiently and effectively
provide its health  healthcare  services and to acquire  additional films during
1997.

     During  1996,  the Company  raised an  aggregate  of  $268,000  through the
private sales of the Company's stock,  pursuant to Section 4(2) and Regulation S
under the Securities Act of 1933, as amended (the "Act").

     The Company  believes  that it will need  additional  financing to meet its
operating cash  requirements for the current level of operations during the next
twelve  months,  and will  require  additional  capital in order to complete its
planned  expansion.  The Company has developed a plan to reduce its  liabilities
and improve cash flow through expanding  operations and raising additional funds
either through issuance of debt or equity. The Company  anticipates that it will
be able to raise the  necessary  funds it may require for the  remainder of 1997
through public or private sales of securities.  If the Company is unable to fund
its cash flow needs the Company may have to reduce or stop planned expansion, or
possibly scale back operations. The Company currently does not have any lines of
credit.

     The Company has issued  shares of its Common Stock on a number of occasions
without offering preemptive rights to existing Shareholders or procuring waivers
of their preemptive  rights.  No Shareholder has alleged any damage resulting to
him as a result of the sale of shares of  Common  Stock by the  Company  without
offering  preemptive  rights.  The amount of damages incurred by Shareholders by
reason of the failure to offer  preemptive  right, if any, is not  ascertainable
with any degree of accuracy.  The Company  believes that if any such claims were
asserted, the Company may have valid defenses.

     During 1996 and 1995,  the Company  focused its  resources on the growth of
the healthcare  segment,  which, during that time, was and currently is the most
efficient  and  cost-effective  strategy  for the Company to  maximize  revenue.
Although  resources and capital remain limited,  the Company has begun directing
efforts  toward  reestablishing  a foothold  in the film  industry.  The Company
expects  to  continue  recognizing  growth  in  revenues  from  the sale of film
licenses in 1997.

  Healthcare

     The transition of PCI from a DRG audit company  offering  limited  services
and markets,  to a full service  Managed  Care Revenue  Enhancement  company has
required a major  investment  of time,  manpower  and  Company  resources.  This
engendered  a period of the  phasing  out old  services,  while at the same time
committing  increased  resources  to  non-revenue  producing,  but  nevertheless
critical development activities.

     The  transition  to a Managed  Care  Revenue  Enhancement  company has also
required a retooling of the Company's  infrastructure as well as the development
of new marketing  strategies and materials.  The Company incurred  approximately
$130,000 for this retooling and development in 1996. New contracts which clearly
define PCI's new services  have been  developed.  In addition,  these  contracts
create payment terms which  expedite the collection  process of PCI revenue from
its new books of business.

     This also required new staffing  including the  recruitment  of experienced
personnel  from  the  insurance  and  managed  care   industry.   Infrastructure
initiatives,  especially those associated with information systems capabilities,
are continuing to be addressed  through  investments in new hardware,  software,
staffing and technical support, and the Company incurred  approximately  $45,000
on these initiatives in 1996.

     PCI  will  also  need  to  invest  in the  upgrading  of its  communication
resources,  since  telemarketing and sales initiatives  associated with national
companies  require  improvement  in the  number and  quality  of  communications
equipment.  These  additional costs have also been factored into PCI's expansion
into the national managed care arena. Fax capabilities,  electronic  mailing and
other  considerations to improve connectivity between PCI's clients, its Florida
office and its New York office have been actively reviewed and addressed.

     With increasing  sales efforts to seek out national  market  opportunities,
the Company  intends to  continue  to invest  resources  in  underwriting  costs
associated  with travel and lodging and sales  contacts.  PCI has also developed
revenue incentive arrangements with established  individuals in the managed care
industry.  Their contacts and recognition of our services' value,  will serve as
another source of sales opportunities.

 Entertainment

     During the latter part of 1996,  the Company was  involved in  negotiations
and discussions with a number of television buyers in the TV broadcast  markets,
for thematic  picture  packages.

     Although the Company's  resources and capital remain  limited,  the Company
has  begun  directing  efforts  toward  reestablishing  a  foothold  in the film
industry.  The Company expects to continue  recognizing  growth in revenues from
the sale of film licenses in 1997.

     In 1997, the Company will consider  searching for full time sales personnel
and utilizing outside sales representatives.  Initially,  the Company will begin
promoting its film library in the domestic television markets.  Secondarily,  it
will  utilize  representatives  to attend  film  festivals  and  penetrate  film
markets.

ITEM 7.  FINANCIAL STATEMENTS

     The  response  to this item  follows  Item 13,  and is hereby  incorporated
herein.


ITEM 8. CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

                                    NONE


                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT.

     The Company's Certificate of Incorporation  provides for no less than three
(3) Directors.  Each Director shall hold office until the next annual meeting of
shareholders  and until his  successor  has been elected and  qualified.  At the
present time there are a total of three (3) Directors. The Board of Directors is
empowered to fill vacancies on the Board. The Company's  Directors and Executive
Officers are listed below:

                                   POSITIONS
         NAME             AGE      W/COMPANY                 DIRECTOR SINCE

Vlado Paul Hreljanovic     49       Chairman of the Board,        1987
                                    President, CEO and
                                    acting CFO

Harold A. Horowitz         46       Director                      1991

Peter W. Feldman           52       Director                      1995

Yvonne T. Paultre          56       Secretary                       -

Richard O. Vazquez         44       President-PCI                   -


DIRECTORS

     Vlado Paul Hreljanovic has been the President,  Chief Executive Officer and
Chairman of the Board since 1987. Upon graduation  from Fordham  University,  he
joined  KPMG  (formerly  Peat  Marwick  Mitchell  & Co.) as an  accountant.  Mr.
Hreljanovic  is and has been the  sole  shareholder,  officer  and  director  of
Entertainment  Financing,  Inc. and EFI Funding, Ltd., which only business is as
lessee of the Company's offices in Great Neck, New York and Boca Raton, Florida,
and the  sub-lessors of such premises to the Company.  He has served as a member
of  the  Executive  Committee  of  The  New  Leadership  Division,  North  Shore
University Hospital NYU Medical School since 1988.

     Harold A.  Horowitz has been a Director of the Company  since January 1991.
Since  October 1, 1995,  he has been a  principal  and  Chairman of the Board of
In-Stock Business Forms and Paper Products,  Ltd., and an independent consultant
to various public and private companies. Until October 1, 1995, Mr. Horowitz was
a Partner of the law firm of  Finkelstein,  Bruckman,  Wohl,  Most and  Rothman,
which firm was securities  counsel to the Company.  Mr. Horowitz received his JD
degree in 1976 from  Columbia  University  School of Law and  masters  degree in
economics  from  Columbia  University  in 1973.  He received  his BA degree from
Yeshiva University in 1971.

     Peter W.  Feldman was elected to the Board of  Directors  of the Company on
February 1, 1995 to fill a vacancy.  Mr. Feldman has been the managing  director
of a Kentucky Fried Chicken  franchise since 1972. He was a Director and officer
of Labels For Less, a discount women's  clothing chain,  from 1975 through 1990.
Additionally,  Mr.  Feldman was Chief  Financial  Officer and  administrator  of
Morris Industrial Builders, a real estate developer, from 1985 through 1991. Mr.
Feldman has been the principal of International  Food and  Development,  Inc., a
company that develops and operates restaurants throughout the Caribbean.

OTHER OFFICER

     Yvonne  T.  Paultre  has  been  Secretary   since  1991.  Ms.  Paultre  has
supervisory responsibilities for the Company's employees, customer relations and
office  policies.  She is  also  responsible  for  operations  of the  Company's
television syndication area.

KEY EMPLOYEE

     Richard O. Vazquez was formerly Vice President for  Integrated  Networks at
MultiPlan,  Inc.  During  his  tenure  he was  responsible  for  developing  and
marketing  all  integrated  strategies  for  MultiPlan.  This  included  network
contracting  throughout the USA, Latin America and the Caribbean.  Prior to that
he was the Associate Executive Director of Elmhurst Hospital and Medical Center,
responsible   for  all  capital   programs,   including  a  $230  million  major
modernization  project.  He has been a speaker  and guest  lecturer  at numerous
managed care  conferences  and forums,  as well as being published on healthcare
issues.  He is a National  Urban  Fellow,  having  attained  an MPA from  Baruch
College and a BA from New York University.

Section 16(a) Beneficial Ownership Reporting Complaince

     To the Company's knowledge,  based solely on a review of copies of Forms 3,
4 and 5  furnished  to the Company  and  written  representations  that no other
reports  were  required  during the fiscal year ended  December  31,  1996,  the
Company's officers, directors, and 10% shareholders complied with all applicable
Section 16(a) filing requirements.

ITEM 10. EXECUTIVE COMPENSATION

     The following table sets forth information with respect to the compensation
of the Chief  Executive  Officer of the  Company  for  services  provided to the
Company and its subsidiaries in 1996, 1995 and 1994. No other executive  officer
received salary and bonus in excess of $100,000 in any such year.
<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE
                                                                                                                        Long Term
                                                                                                                      Compensation
                                                                                                                     --------------
                                          Annual Compensation                                                          Securities
                 Name and                                                                          Other Annual        Underlying
            Principal Position                    Year             Salary           Bonus          Compensation        Options (#)
    ------------------------------------   -------------------- -------------    -------------    ---------------    ---------------

<S>                                               <C>               <C>               <C>     <C>        <C>     <C>
    Vlado Paul Hreljanovic, Chairman of           1996              $167,774          $45,931 (2)        $56,800 (1)        -
    the Board and Chief Executive Officer
                                                  1995              $163,363          -                  $45,500 (3)        -

                                                  1994              $150,000          $26,250 (4)        $45,200 (5)    250,000  (6)

</TABLE>

(1) Other compensation for Mr.  Hreljanovic is 1996 was primarily  comprised of,
among other things,  automobile  payments,  including  lease,  maintenance,  and
insurance of $29,300, and health and life insurance of $27,500.

(2) Paid in 670,000 shares of the Company's  unregistered common stock valued at
$45,931,  which were issued to Mr. Hreljanovic on July 1, 1996 (560,000 shares),
and December 24, 1996 (110,000 shares), in recognition of efforts exerted by Mr.
Hreljanovic on behalf of the Company and its subsidiaries.

(3) Other compensation for Mr.  Hreljanovic in 1995 was primarily  comprised of,
among other  things,  automobile  payments  including  lease,  maintenance,  and
insurance of $25,000 and health and life insurance of $18,600.

(4) Paid in 525,000 shares of the Company's  unregistered common stock valued at
$26,250,  which were  issued to Mr.  Hreljanovic  on  February  8, 1995  (75,000
shares) and April 18, 1995 (450,000  shares),  in recognition of efforts exerted
by Mr. Hreljanovic on behalf of the Company and its subsidiaries.

(5) Other compensation for Mr.  Hreljanovic in 1994 was primarily  comprised of,
among other  things,  automobile  payments  including  lease,  maintenance,  and
insurance of $29,900 and health and life insurance of $14,500.

(6) Options granted to Mr. Hreljanovic pursuant to his employment agreement,  at
110% of the market value on January 1, 1994, the effective  date,  which equaled
$0.407 per share. These options are for a term of five years.

<TABLE>
<CAPTION>



    Aggregate Option Exercises in Last Fiscal Year and Year-End Options

    --------------------------------------------------------------------------------------------------------------------
                                                                                  Number of
                                                                                  Securities         Value of
                                                                                  Underlying       Unexercised
                                                                                 Unexercised       In-the-Money
                                                 Shares                           Options at        Options at
                   Name                         Acquired                         Year-End (#)      Year-End ($)
                    and                            on              Value         Exercisable/      Exercisable/
            Principal Position                  Exercise          Realized       Unexercisable    Unexercisable
    ------------------------------------   -------------------- -------------    --------------------------------

<S>                                                                               <C>     <C>         <C>
    Vlado Paul Hreljanovic, Chairman of             -                -            250,000/0           $0/$0
    the Board and Chief Executive Officer
</TABLE>

     Compensation  of  Directors:  In 1996,  Mr.  Horowitz and Mr.  Feldman were
issued 50,000 and 100,000 Shares,  respectively,  of the Company's  unregistered
common  stock,  valued at $4,500 and $4,900,  respectively,  in  recognition  of
efforts  exerted on behalf of the  Company as Board  Members  during  1996.  Mr.
Horowitz received $4,477 as additional compensation.

     Non-employee  directors are entitled to five hundred  ($500.00) dollars for
each meeting attended and to reimbursement for their  out-of-pocket  expenses in
attending such meetings.

     Employment Agreements: Mr. Hreljanovic has an Employment Agreement with the
Company which expires on April 30, 2000, and that provides for his employment as
President and Chief Executive  Officer at an annual salary adjusted annually for
the CPI Index and for the reimbursement of certain expenses and insurance. Based
on the  foregoing  formula,  Mr.  Hreljanovic's  salary  in 1996  was  $167,774.
Additionally,  Mr.  Hreljanovic may receive shares of the Company's common stock
as consideration for raising funds for the Company.

     Under the terms of this employment  agreement,  the Chief Executive Officer
of the  Company  is  entitled  to receive a cash  bonus of a  percentage  of the
Company's  pre-tax  profits if the Company's  pre-tax profit  exceeds  $100,000.

     Additionally, if during the term, the employment agreement is terminated by
the Company after a changein control (as defined by the agreement),  the officer
is entitled to a lump sum cash payment  equal to  approximately  three times his
base salary.

     Mr. Vazquez has an employment  agreement with PCI which expires on June 30,
1998 and  provides  for  his  employment  as  President  of  PCI  with  annual
compensation  of  $200,000,  payable in cash of  $135,000  and in the  Company's
Common  Stock of  $65,000.  Additionally,  Mr.  Vazquez is entitled to an annual
bonus to be  determined  by the Board of Directors of the Company and options to
purchase  590,000 shares of the Company's  Common Stock under the Company's 1996
Incentive  Stock Option Plan.  Such  options will vest as Mr.  Vazquez  achieves
certain annual gross revenue  thresholds,  ranging from $1,000,000 to $5,000,000
during the term of his employment agreement.

STOCK OPTION PLANS

1989 Restricted  Stock,  Non-Qualified  and Incentive Stock Option Plan

     On December 7, 1989, a restricted stock,  non-qualified and incentive stock
option plan was adopted.  The Company has  authorized  375,000  shares of common
stock to be  reserved  for  issuance  thereunder.  Under the terms of this plan,
restricted   stock   awards  are   authorized   for   employees.   Additionally,
non-qualified  options may be granted to employees,  directors,  consultants and
others who render  services to the Company.  269,600 shares of restricted  stock
have been issued to  employees,  pursuant  to the plans.  In  addition,  250,000
options  have been issued to the Chief  Executive  Officer  under the Plan.  The
Company  intends to increase  the number of shares  authorized  under this Plan.
Under the terms of the restricted  stock awards,  restricted stock may be issued
to  employees  in  consideration  of (i) cash in an amount not less than the par
value thereof or such greater  amount as may be  determined by the  Compensation
Committee of the Board of Directors  and (ii) the  continued  employment  of the
employees during the restricted period,  which will in no event be less than one
year.

     Under the Non-Qualified  Option aspect of the Incentive  Compensation Plan,
options may be granted to employee, directors, consultants and other individuals
who render  services to the Company.  The option  price for each option  granted
will be determined by the Compensation  Committee.  Each option will have a term
of not more  than 10 years  from the  date of grant  and may be  exercisable  in
installments as prescribed by the Compensation Committee.

     The Company's  Incentive Stock Option aspect of the Incentive  Compensation
Plan provides for granting  incentive options to employees to purchase shares of
common  stock of the Company at option  prices  which are not less than the fair
market value of the Company's common stock at the date of grant, except that any
Incentive  Option granted to an employee  holding 10% or more of the outstanding
voting  securities of the Company must be for an option price not less than 110%
of fair market value.

     Incentive Options granted under the Incentive Compensation Plan will expire
not more than 10 years from the date of the grant  (five  years from the date of
the grant in the case of a 10% Stockholder), and the Incentive Option agreements
entered into with the holders will specify the extent to which Incentive Options
may be exercised during their respective  terms. The aggregate fair market value
of the shares of common  stock  subject to  Incentive  Options that become first
exercisable  by an  optionee  in a  particular  calendar  year  may  not  exceed
$100,000.

1996 Stock Option Plan

     On February  12, 1997,  the  shareholders  of the Company  adopted the 1996
Stock Option Plan. The Plan  supplements  the Company's 1989  Restricted  Stock,
Non-Qualified  and Incentive  Stock Option Plan. This Plan allows the Company to
grant   incentive   stock  options,   non-qualified   stock  options  and  stock
appreciation rights  (collectively  "options") to purchase up to an aggregate of
5,000,000  shares of  common  stock to  employees,  including  officers,  and to
non-employees involved in the continuing development and success of the Company.
The terms of the options are to be determined by the Board of Directors. Options
will not have expiration dates later than ten years from the date of grant (five
years from the date of the grant in the case of a 10%  stockholder).  The option
prices may not be less than the fair  market  value of the common  shares on the
date of grant, except that any option granted to an employee holding 10% or more
of the outstanding  voting securities of the Company must be for an option price
not less than 110% of fair market value. An option to purchase 590,000 shares of
common stock was granted to Mr.  Vazquez  under the plan.  No other options have
been granted as of the date of this report.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table sets forth,  as of March 17,  1997:  (i) the name and
address  of each  person  who owns of  record  or who is  known by the  Board of
Directors to be beneficial owner of more than five percent (5%) of the Company's
outstanding common stock, (ii) each of the Company's Directors, and (iii) all of
the Company's Executive Officers and Directors as a group.

      NAME AND             BENEFICIAL                PERCENT OF COMMON
      ADDRESS              OWNERSHIP                 STOCK OUTSTANDING

Vlado Paul Hreljanovic
111 Great Neck Road
Suite 604
Great Neck, NY 11021       3,664,542 (1)                    18.4%

Harold A. Horowitz
111 Great Neck Road
Suite 604
Great Neck, NY 11201         150,000                         0.8%

Peter W. Feldman
777 Yamato Road
Suite 135
Boca Raton, FL  33134        232,500                         1.2%

Officers and Directors as a
group (4 Persons)          4,086,542 (1)                    20.6%


(1) Includes options to purchase 250,000 shares.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  Company  paid  rent  under two  sub-leases  during  1996 and 1995,  to
companies  affiliated with the Chief Executive Officer of the Company. The rents
paid and terms under the subleases are substantially the same as those under the
affiliate's  lease  agreements  with the  landlords.  Rent expense for the years
ended  December 31, 1996,  and 1995 was $95,000 and  $71,050,  respectively.  In
prior  years,  the Company  made  advances to or  received  advances  from these
companies for working capital  requirements.  As a result, at December 31, 1996,
the balances due from(to) the affiliates were approximately ($2,000) and $5,000.

     As of December 31, 1996 and 1995, the balance due from a company affiliated
with the Chief Executive  Officer of the Company was $55,205.  This balance is a
result of advances made, from time to time, to the affiliated company.

     The  Company  acquired  distribution  rights  to two  films  from a company
affiliated  with the  Chief  Executive  Officer  of the  Company  for a ten year
license  period,  which expires on June 5, 1998. The Company is obligated to pay
such company  producers fees at the contract rate. Such payments will be charged
against earnings.  In 1996 and 1995, no payments were made to such company,  and
no revenue was recognized from such films.

     During 1996 and 1995, the Company's principal  shareholder and officer made
loans directly to the Company,  made payments to unaffiliated  parties on behalf
of the Company,  incurred  travel  expenses  while  conducting  business for the
Company,  and received  repayment of loans and reimbursement of certain expenses
during the year.  With regard to loans,  interest  accrues at 12% per annum.  At
December 31, 1996 and 1995,  the balance due from the Officer for all activities
above, was $23,000 and $5,400, respectively.

     One of the  Company's  directors was a partner in a law firm engaged by the
Company as general counsel.  As  consideration  for his efforts on behalf of the
Company in 1996, the Board member received  50,000 shares,  valued at $4,500 and
$4,477 as additional compensation. As consideration for his efforts on behalf of
the Company in 1995, the Board member received 100,000 shares, valued at $5,000.
During 1996 and 1995,  the law firm billed nothing in 1996 and $156,000, in fees
in 1995, the  outstanding balance due the firm was approximately $100,000 and
$109,000, respectively.

ITEM 13.  EXHIBITS, LIST AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit  Description

 2.1  Agreement  and Plan of Merger dated as of January 20, 1997 between the
      Registrant and Juniper Group, Inc., a Nevada corporation (2)

 3.1  Certificate of Incorporation of the Registrant, as amended (1)

 3.2  Amendment to the Certificate of Incorporation of the Registrant,  filed
      March 7, 1997

 3.3  Certificate of Incorporation of Juniper Group, Inc., a Nevada
      corporation.(2)

 3.4  By-Laws of the Registrant (1)

 3.5  Amendment to the By-Laws of the Registrant approved by the shareholders
      of the Registrant on February 12, 1997 (2)

 3.6  By-Laws of Juniper Group, Inc., a Nevada corporation (2)

 4.1  1996 Stock Option Plan (2)

10.1  Employment Agreement between the Registrant and V. Paul Hreljanovic,
      as amended (1)

10.3  Agreement Between Juniper Healthcare Containment Systems, Inc. and the
      Guardian Life Insurance Company, effective January 1, 1996 (1)

10.4  Consulting Agreement between Registrant and Anthony V. Milone, dated June
      7, 1994, as amended August 31, 1994 and May 18, 1995 (1)

10.5  Employment Agreement between PCI, Inc. and Richard O. Vazquez,
      dated June 7, 1996

10.6  Joint Venture Agreement between Juniper Healthcare Containment Systems,
      Inc. and Health Containment Corporation dated March 1, 1996

21.1  Subsidiaries

23.1  Consent of Independent Certified Public Accountants

27.1  Financial Data Schedule

     (1) Incorporated by reference to the Company's annual report on Form 10-KSB
     for the fiscal year ended December 31, 1995

     (2)  Incorporated  by reference to the  Company's  Proxy  Statement for its
     Annual Meeting held in February 1997


(b)      Reports on Form 8-K.

         NONE



<PAGE>





                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS






                                                                      Page

Report of Independent Certified Public Accountants................... F-2

Consolidated Balance Sheets as of December 31, 1996 and 1995........  F-3

Consolidated Statements of Income
for the two years ended December 31, 1996...........................  F-4

Consolidated Statements of Cash Flows
for the two years ended December 31, 1996...........................  F-5

Consolidated Statements of Shareholders'
Equity for the two years ended December 31, 1996.................     F-6

Notes to Consolidated Financial Statements............................F-7
















                                       F-1
<PAGE>







               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS





Board of Directors and Shareholders
JUNIPER GROUP, INC.


    We have audited the  accompanying  consolidated  balance  sheets of Juniper
Group,  Inc. and  subsidiaries as of December 31, 1996 and 1995, and the related
consolidated  statements of income, cash flows and shareholders' equity for each
of the  years  then  ended.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

     In our opinion,  the consolidated  financial  statements  referred to above
present  fairly,  in all material  respects,  the financial  position of Juniper
Group,  Inc. and  subsidiaries as of December 31, 1996 and 1995, and the results
of their  operations  and their cash flows for each of the years then ended,  in
conformity with generally accepted accounting principles.

     The  accompanying  consolidated  financial  statements  have been  prepared
assuming the Company will continue as a going concern. As discussed in Note 8 to
the consolidated financial statements, the Company has suffered recurring losses
from operations which raises  substantial doubt about its ability to continue as
a going concern.  Management's  plans regarding those matters are also described
in Note 8. The consolidated  financial statements do not include any adjustments
that might result from the outcome of this uncertainty.




                           /s/GOLDSTEIN & GANZ, CPA's, P.C.







Great Neck, New York
March 26, 1997







                                       F-2

<PAGE>




                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

                           CONSOLIDATED BALANCE SHEETS


                                                       December      December
                   ASSETS                              31, 1996      31, 1995
                                                       ---------    -----------
Current Assets
  Cash ...........................................   $    14,593    $   129,558
  Accounts receivable - trade ....................       795,091        804,681
  Due from affiliates ............................        59,359         86,087
  Prepaid expenses and other current assets ......       105,995        150,148
  Due from officer ...............................        23,318           --
                                                     -----------    -----------
      Total current assets .......................       998,356      1,170,474

  Film licenses ..................................     2,963,729      2,980,678
  Property and equipment net of accumulated
    depreciation of $85,740 and $55,798
    respectively .................................       114,738        122,703
  Other assets ...................................         3,519          2,396
                                                     -----------    -----------
                                                     $ 4,080,342    $ 4,276,251
                                                     ===========    ===========

       LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Accounts payable and accrued expenses ..........   $ 1,177,736    $   878,612
  Notes payable - current ........................       105,587        179,163
  Due to producers - current .....................        67,556         93,289
  Due to shareholders ............................         7,000          7,000
                                                     -----------    -----------
       Total current liabilities .................     1,357,879      1,158,064

Notes payable - long term ........................         1,069         54,752
Due to producers - long term .....................       196,741        266,039
Due to officers  - long term .....................          --            4,566
                                                     -----------    -----------
       Total liabilities .........................     1,555,689      1,483,421
                                                     -----------    -----------

Shareholders' Equity
  12% Non-voting convertible redeemable
   preferred stock: $.10 par value, 875,000
   shares authorized, 235,900 shares issued
   and outstanding at December 31, 1996, and
   December 31, 1995: aggregate liquidation
   preference, $471,800 at December 31, 1996
   and December 31, 1995 .........................        23,590         23,590
  Common Stock - $.001 par value,300,000,000
   shares authorized, 19,027,516 and 15,504,696
   issued and outstanding at December 31, 1996
   and December 31, 1995, respectively ...........        19,027         15,505
  Capital contributions in excess of par:
   Attributed to preferred stock .................       210,303        210,303
   Attributed to common stock ....................     7,160,265      6,741,804
  Retained earnings (deficit) ....................    (4,888,532)    (4,198,372)
                                                     -----------    -----------
   Total shareholders' equity ....................     2,524,653      2,792,830
                                                     -----------    -----------
                                                     $ 4,080,342    $ 4,276,251
                                                     ===========    ===========

                See Notes to Consolidated Financial Statements

                                       F-3
                                     <PAGE>

                               JUNIPER GROUP, INC
                            AND SUBSIDIARY COMPANIES

                        CONSOLIDATED STATEMENTS OF INCOME





                                                 Year Ended December 31,
                                                  1996            1995
                                              ------------    ------------
Revenues:
     Healthcare ..........................   $  2,388,538    $  3,585,923
     Entertainment .......................        114,650          10,000
                                             ------------    ------------
                                                2,503,188       3,595,923
                                             ------------    ------------

Operating Costs:
     Healthcare ..........................      1,258,746       2,332,977
     Entertainment .......................         59,797           5,864
Selling, general and administrative expenses    1,874,805       1,432,656
                                             ------------    ------------
                                                3,193,348       3,771,497
                                             ------------    ------------

Net income (loss) ...........................$   (690,160)   $   (175,574)
                                             ============    ============

Weighted average number of shares outstanding  17,149,602      13,366,764
                                             ============    ============
Net income (loss) per common share ..........$     (0.04)   $      (0.02)
                                             ============    ============































                 See Notes to Consolidated Financial Statements

                                       F-4
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                     Year Ended December 31,
                                                       1996         1995
                                                     ---------    ---------
Operating Activities
Net income (loss) ................................   $(690,160)   $(175,574)
Adjustments to reconcile net cash provided
  by operating activities:
 Amortization of film licenses ...................      76,949        4,068
 Depreciation expense ............................      42,766       38,408
 Payment of officer's compensation with equity ...      45,931       26,250
 Payment of various liabilities with equity ......      19,676       26,345
 Payment of directors' compensation with equity ..       9,400       53,969
 Payment of employees' compensation with equity ..      18,132         --
Changes in assets and liabilities:
 Accounts receivable .............................       9,590       (3,152)
 Prepaid expenses and other current assets .......      44,153        2,627
 Other assets ....................................      (1,123)      (1,021)
 Due to/from officers and shareholders ...........     (27,884)     (62,191)
 Due from affiliates .............................      26,728      (11,879)
 Accounts payable and accrued expenses ...........     299,124      162,323
                                                     ---------    ---------
 Net cash provided from (used for)
   operating activities ..........................    (126,718)      60,173
                                                     ---------    ---------
Investing activities:
 Sale (purchase) of equipment .....................    (34,801)      (5,780)
 Purchase of film licenses ........................    (11,000)        --
                                                     ---------    ---------
Net cash provided from (used for)
 investing activities .............................    (45,801)      (5,780)
                                                     ---------    ---------

Financing activities:
 Reduction in borrowings ...........................  (127,259)    (246,426)
 Proceeds from borrowings ..........................      --        100,000
 Payments to and on behalf of producers ............   (83,031)    (192,978)
 Proceeds from exercise of options .................   257,844      158,000
 Proceeds from private placements ..................    10,000      126,400
                                                     ---------    ---------
 Net cash provided from (used for)
   financing activities ............................    57,554      (55,004)
                                                     ---------    ---------
 Net increase (decrease ) in cash ..................  (114,965)        (611)
 Cash at beginning of period .......................   129,558      130,169
                                                     ---------    ---------
 Cash at end of period ............................. $  14,593    $ 129,558
                                                     =========    =========











                 See Notes to Consolidated Financial Statements


                                       F-5
<PAGE>


                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                        Preferred Stock               Common Stock
                                        ---------------               ------------
                                                    Capital                           Capital
                                                 Contributions                    Contributions   Retained
                                   Par Value       in excess       Par Value        in excess     Earnings
                                   at $.10          of par         at $.001           of par      (Deficit)           Total

<S>               <C> <C>         <C>             <C>             <C>              <C>          <C>               <C>
Balance, December 31, 1994        $ 23,590        $210,303        $11,924          $6,264,421   $(4,022,798)      $2,487,440

Proceeds from private
  placements                             -               -             700             125,700        -               126,400
Shares issued to officer as compensation -               -             525              25,725        -                26,250
Shares issued to producers for
  acquisition of film licenses           -               -             500              89,500        -                90,000
Shares issued as payment for
  various expenses                       -               -             311              26,034        -                26,345
Shares issued to members of
  the Board of Directors                 -               -             602              53,367        -                53,969
Shares issued from exercise
  of stock options                                                     943             157,057        -               158,000
Net loss for the year ended
  December 31, 1995                      -               -               -                -         (175,574)        (175,574)
                                    _______        ________         _______          _________    __________       __________
Balance, December 31, 1995          23,590         210,303          15,505           6,741,804    (4,198,372)       2,792,830

Proceeds from private
  placements                             -               -              40               9,960           -             10,000
Shares issued to officer as
  compensation                           -               -             670              45,261           -             45,931
Shares issued to producers for
  acquisition of film licenses           -               -             350              48,650           -             49,000
Shares issued as payment for
  various expenses                       -               -             240              19,436           -             19,676
Shares issued as compensation
  to employees                           -               -              85              18,047           -             18,132
Shares issued to members of
  the Board of Directors                 -               -             150               9,250           -              9,400
Shares issued from exercise of
  stock options                                                      1,587             256,257           -            257,844
Shares issued to convert debt
  to equity                                                            400              11,600           -             12,000
Net loss for the year ended
  December 31, 1996                      -               -               -                -         (690,160)        (690,160)
                                   _______         ________        _______          __________   ___________       __________
Balance, December 31, 1996         $23,590         $210,303        $19,027          $7,160,265   $(4,888,532)      $2,524,653
                                   =======         ========        =======          ==========   ===========       ==========




</TABLE>


                 See Notes to Consolidated Financial Statements

                                       F-6
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - Summary of Significant Accounting Policies

  Principles of Consolidation

     The  consolidated   financial   statements  include  the  accounts  of  all
subsidiaries.   Intercompany  profits,   transactions  and  balances  have  been
eliminated in consolidation.

  Joint Venture

     In 1996, one of the Company's  subsidiaries entered into a joint venture in
which it owns a 50% interest.  Accordingly,  50% of the assets,  liabilities and
items of income and expense have been  consolidated in the financial  statements
of the subsidiary,  which are included in the consolidated  financial statements
of the  Company.  During  1996,  the  joint  venture  accounted  for  23% of the
Company's revenues.

  Use of Estimates in the Preparation of Financial Statements

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

  Financial Instruments

     The  estimated  fair values of accounts  receivable,  accounts  payable and
accrued expenses approximate their carrying values because of the short maturity
of these instruments. The Company's debt (i.e. Due to Producers,  Creditor Notes
and other obligations) does not have a ready market.  These debt instruments are
shown on a discounted  basis (see Notes 4 & 5) using market rates  applicable at
the effective  date. If such debt were  discounted  based on current rates,  the
fair value of this debt would not be materially  different  than their  carrying
value.

  Supplemental Cash Flow Information

     Cash  paid for  interest  totaled  $15,796  and  $23,025  in 1996 and 1995,
respectively.

     During 1996, the following  transactions occurred which did not require the
use of cash,  but  instead  were paid by the  issuance of the  Company's  common
stock:  payments to producers  amounting to $49,000;  directors  compensation of
$9,400; officers compensation of $45,931; payment of corporate debt amounting to
$12,000;  certain corporate expenses amounting to $19,675;  and employee bonuses
amounting to $18,132.

     During 1995, the following  transactions occurred which did not require the
use of cash but instead were paid by the issuance of the Company's common stock:
payments to producers  amounting to $90,000;  officers  compensation of $26,250;
directors  compensation of $53,969;  and certain corporate expenses amounting to
$26,345.

  Accounts Receivable

     The Company estimates an allowance for doubtful  accounts,  which allowance
amounted to  approximately  $163,000  and $79,500 at December 31, 1996 and 1995,
respectively.

Film Licenses

     Film  costs are  stated  at the lower of  estimated  net  realizable  value
determined on an individual film basis, or cost, net of amortization. Film costs
represent  the  acquisition  of film  rights  for  cash and  guaranteed  minimum
payments.  Producers retain a participation in the profits from the sale of film
rights, however, producer's share of profits is earned only after payment to the
producer  exceeds the guaranteed  minimum,  where minimum  guarantees  exist. In
these instances, the Company records as participation expense an amount equal to
the producer's  share of the profits.  The Company incurs expenses in connection
with its film licenses, and in accordance with license agreements, charges these
expenses  against the liability to producers.  Accordingly,  these  expenses are
treated as payments under the film license agreements.

     When the Company is  obligated to make  guaranteed  minimum  payments  over
periods  greater than one year,  all long term  payments are  reflected at their
present value.  Accordingly,  in such case, original acquisition costs represent
the sum of the  current  amounts  due and the  present  value of the  long  term
payments.

                                       F-7
<PAGE>



                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 1 - Summary of Significant Accounting Policies (Continued)

     The Company acquired distribution rights to eight films for which it has no
financial obligations unless and until the rights are sold to third parties. The
value of such  distribution  rights has not been reflected in the balance sheet.
The Company was able to acquire  these film rights  without  guaranteed  minimum
financial  commitments as a result of its ability to place such films in various
markets.

  Amortization of Film Licenses

     Amortization of film licenses is calculated under the film forecast method.
Accordingly,  licenses are amortized in the proportion  that revenue  recognized
for the period bears to the estimated  future revenue to be received.  Estimated
future  revenue  is  reviewed  annually  and  amortization  rates  are  adjusted
accordingly.

  Property and Equipment

     Property and equipment  including assets under capital leases are stated at
cost.  Depreciation  is  computed  generally  on the  straight-line  method  for
financial reporting purposes.

 Recognition of Revenue from License Agreements

     Revenue from television licensing agreements is recognized when the license
period begins and the licensee and the Company  become  contractually  obligated
under a noncancellable agreement. All revenue recognition for license agreements
is in compliance with the Statement of Financial Accounting Standards No.53.

  Operating Costs

     Operating  costs include costs directly  associated  with earning  revenue.
PCI's  operating  costs  include  salary  or fees  and  travel  expenses  of the
individuals  performing  the  services,  and  sales  commissions.  Containment's
operating  costs  include  the cost of  sub-contractors  and sales  commissions.
Pictures operating costs include film amortization and producer's royalties.

  Major Customers

     During 1996 and 1995,  the  Company had  revenues  from The  Guardian  Life
Insurance  Company  ("Guardian")  that represented 75% and 83% of total revenue,
respectively.  The Company currently provides services to Guardian in New Jersey
and  Connecticut.  The loss of the contract with Guardian  would have a material
adverse effect on the operations of the Company.

  Reclassifications

     Certain  amounts in the 1995  financial  statements  were  reclassified  to
conform to the 1996 presentation.

NOTE 2 - Accounts Payable and Accrued Expenses

     At December  31,  1996 and 1995,  accounts  payable  and  accrued  expenses
consisted  primarily  of  legal  fees  ($303,226  and  $184,506,  respectively),
commissions   ($110,187   and   $214,027,   respectively),   and  the   cost  of
Sub-contractors ($339,366 and $295,195, respectively).  Other accruals relate to
selling,  general and  administrative  expenses incurred in the normal course of
business.

NOTE 3 - Film Licenses

     At December 31, 1996 and 1995,  film licenses  amounted to  $2,963,729  and
$2,980,678, respectively. This reflects the Company's original acquisition price
less  accumulated  amortization  for the  distribution  rights to 77 and 73 film
licenses,  respectively.  Such amortization amounted to $295,369 and $218,420 at
December 31, 1996 and 1995, respectively.


                                       F-8
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 3 - Film Licenses (Continued)


     The  Company has  directed  predominantly  all its time and efforts  toward
building the  healthcare  segment of the business.  Since early 1995, due to the
limited  availability  of capital,  personnel and resources,  the volume of film
sales activity was significantly  diminished.  Although the Company's  resources
and capital  remain  limited,  the Company has begun  directing  efforts  toward
reestablishing a foothold in the film industry. The Company's growth in revenues
from the sale of film licenses in 1996 is expected to continue in 1997.

     Initially,  the Company  began  promoting  its film library in the domestic
television markets.  Secondarily, it will utilize representatives to attend film
festivals  and  penetrate  foreign  markets,  subject  to  the  Company  capital
resources.

     Based upon the  Company's  estimates  of future  revenue as of December 31,
1996,  approximately 34% of the amortized film licenses will be amortized during
the three years ended  December 31, 1999.  Management  expects that greater than
70% of the film  licenses  applicable  to related  television  and films will be
amortized by 2001.

     The Company's  policy is to amortize film licenses  under the film forecast
method.  Depending  upon the  Company's  success in marketing  and achieving its
sales forecast,  it is reasonably  possible that the Company's  estimate that it
will  recover the carrying  amount of its film  library from future  operations,
will change in the near term. As a result of this potential change, the carrying
amount of the film library may be reduced materially in the near term.

NOTE 4 - Notes Payable

     In June 1993, the Company negotiated a settlement agreement with a Producer
who had been awarded  approximately  $275,000 in connection  with an arbitration
proceeding  against the Company.  The agreement provided for payments in 1993 of
$115,000  and  monthly  payments  thereafter  of  $5,000,  inclusive  of imputed
interest,  through August 1996. Although the Company is in arrears $16,873,  the
balance at December 31, 1996, the lender has not taken any steps to foreclose on
the security,  or execute its judgment.  A pay-out  agreement was made to extend
the terms through early 1997.

     The Company has loans  outstanding  for the  acquisition of capital assets.
These  loans  bear  interest  at  various  rates from 8.5% to 9.0% and mature at
various  dates  through  July 1998.  The  monthly  payments  for these loans are
$2,031.  At  December  31,  1996,  the  outstanding  balances of these loans was
$58,783.

     The  composition  of Notes  Payable at December 31, 1996 and 1995,  were as
follows:

                                                          1996             1995
                                                          ----             ----
Notes payable ................................         $ 31,000         $100,000
Arbitration award ............................           16,873           60,856
Loans for capital purchases ..................           58,783           73,059
                                                       --------         --------
                                                        106,656          233,915
Less current portion .........................          105,587          179,163
                                                       --------         --------
Long term portion ............................         $  1,069         $ 54,752
                                                       ========         ========



NOTE 5 - Producer's Minimum Guarantees and Participations

     Obligations  incurred in connection  with the acquisition of film licenses,
including minimum  guarantees,  producer's  participations  and settlements with
producers were $264,297 at December 31, 1996.  During 1996, the Company  reduced
its obligations to producers by $83,031.





                                       F-9
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



NOTE 5 - Producer's Minimum Guarantees and Participations (Continued)

     The  following  schedule  summarizes  the  maturities  of the  balances  at
December 31, 1996:

                      1997                   $ 67,556
                      1998                    121,248
                      1999                     20,252
                      2000                     36,440
                      2001                     18,801
                                             --------
                                             $264,297
                                             ========


NOTE 6 - Shareholders' Equity

     Throughout  1996, the Company issued common stock through  various  private
placements  and the  exercise  of  options.  The prices at which the shares were
negotiated  and  sold  varied,  depending  upon  the bid and ask  prices  of the
Company's  common stock quoted on the NASDAQ stock  exchange.  In the aggregate,
the Company received $267,800 for 1,627,000  shares,  and $284,400 for 1,643,000
shares of common stock in 1996 and 1995, respectively.

     In connection  with the  Company's  obligations  to producers,  the Company
issued 350,000  shares,  valued at $49,000 and 500,000 shares valued at $90,000,
in 1996 and 1995,  respectively.  In  connection  with  payables  for  operating
activities,  the Company issued 240,000 shares,  valued at $19,676,  and 311,000
shares  valued at  $26,345  in 1996 and 1995,  respectively.  In  addition,  the
Company issued the Chief Executive Officer 670,000 shares, valued at $45,931 and
525,000 shares,  valued at $26,250, for his bonus compensation in 1996 and 1995,
respectively.  During the year, as compensation  to its Board of Directors,  the
Company  issued 150,000  shares of common stock,  valued at $9,400,  and 602,000
shares valued at $53,969 in 1996 and 1995, respectively.

     Also,   in  1996  the  Company   issued   85,820  shares  to  employees  as
compensation, valued at $18,132.

     All shares issued in 1996 and 1995,  were not registered and, as such, were
restricted shares under the Securities Act of 1933, as amended.

     Net income  (loss) per common share for 1996 and 1995 has been  computed by
dividing net income  (loss),  after  preferred  stock dividend  requirements  of
$56,616  in 1996 and 1995,  by the  weighted  average  number  of common  shares
outstanding throughout the year of 17,149,602 and 13,366,764, respectively.

  Options Granted

     In July 1992, the Company  issued 25,000 common stock purchase  warrants to
an  individual  as  consideration  for the  referral of certain  business in the
medical area. The warrants are  exercisable for $2.50 per share through July 26,
1997. At December 31, 1996, no warrants had been exercised.

     In  January  1994,  in  connection  with  an  amendment  to the  Employment
Agreement for the  President and Chief  Executive  Officer,  the Company  issued
options to purchase  250,000  shares of common stock at 110% of the market value
of the effective date which equals $.407 per share (see Note 9). The options are
for a term of five years.  At December  31,  1996,  none of the options had been
exercised.

     On  October  4,  1994,  the  Company  entered  into  an  agreement  with  a
consultant,  for a term of  fifteen  months,  to assist  the  Company  in public
relations and marketing of certain products and services.  In consideration  for
these services,  the consultant  received  options to purchase 43,000 shares and
100,005  shares  of the  Company's  common  stock at $.233  and $.31 per  share,
respectively. In March 1995, the option to purchase 43,000 shares was exercised.
At December 31, 1996, the options for 100,005 shares had not been exercised.


                                      F-10
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 6 - Shareholders' Equity (Continued)

     On January 18, 1995,  the Company  entered into a one year agreement with a
consultant  to  assist  the  Company  in  the  development  of  future  business
opportunities,  as  well  as to  develop  heightened  public  awareness  of  the
Company's  business with broker dealers and investment  bankers.  The consultant
received  100,000 shares of common stock and an option to purchase 50,000 shares
of common stock.  The options are exercisable at $.25 per share. At December 31,
1996, no options had been exercised.

     In May 1996,  the Company  amended its agreement  dated June 7, 1995 with a
healthcare  professional  retained to bring to the Company both health insurance
company group plan customers and professional healthcare providers (see Note 8).
The amendment  provided that the healthcare  professional  expand the geographic
territories  in which his  services  are  performed in exchange for an option to
purchase  100,000 shares of the Company's  common stock at $.105 per share.  The
option was  exercisable  for one year. At December 31, 1996, the option had been
exercised.

     On  September  20,  1995,  the Company  entered  into an  agreement  with a
consultant to provide certain public  relations  services.  The agreement is for
one year.  As  consideration  for these  services,  the  Company  granted to the
consultant,  options to purchase  150,000 shares at $.25 per share.  At December
31, 1996, all the options had been exercised.

     On October 2, 1995,  the Company  retained the services of a consultant for
one year to assist in the marketing of the Company's  healthcare business in the
western  United  States.  As  consideration,  the  Company  granted an option to
purchase  650,000  shares of the Company's  common stock at an exercise price of
$.15 per share,  exercisable  for two years.  In November  1996, all the options
were exercised.

     On  November  9, 1995,  the  Company  entered  into an  agreement  with two
consultants to provide introductions to potential  distributors and end users of
the Company's  pen-based computer system for healthcare  applications in certain
foreign  markets.  The agreement is for one year and entitles each consultant to
options to purchase 500,000 shares of common stock at a price of $.20 per share.
The  options  are  exercisable  for two years.  As of December  31,  1996,  both
consultants had exercised all their options.

Warrants and Convertible Preferred Stock

     Each of the Company's Class A Warrants, entitles the holder to purchase, at
a price of $2.50, one share of common stock and one Class B Warrant.  Each Class
B Warrant entitles the holder to purchase,  at any time through May 1, 1997, one
share of  Common  Stock  at a price of $5.00  per  share.  The  Preferred  Stock
entitles the holder to dividends  equivalent  to a rate of 12% of the  Preferred
Stock  liquidation  preference  of $2.00 per annum (or $.24 per annum) per share
payable  quarterly on March 1, June 1, September 1, December 1 in cash or common
stock of the  Company  having  an  equivalent  fair  market  value,  thereafter.
Further, each share of the Preferred Stock is convertible at the holder's option
into two shares of Common  Stock.  Holders of  warrants  are  protected  against
dilution upon the occurrence of certain events.  Holders of warrants do not have
voting power and are not entitled to any dividends.  The Company,  upon not less
than 30 days prior written  notice and  providing the average  closing price for
the common stock for 10  consecutive  trading days exceeds $2.50 or higher,  may
redeem all of the warrants for $.05 per warrant.  At December 31, 1996,  116,800
Class A Warrants and 300,000 Class B Warrants were outstanding.

     In 1991, the Company also sold to the underwriters of the Company's initial
public  offering,  for $100,000,  warrants  exercisable  through May 1, 1996, to
purchase up to 30,000 units at $7.20 each.  The  underwriters'  units consist of
two shares of common stock,  one share of  Convertible  Preferred  Stock and one
Class A Warrant,  each  warrant  entitling  the holder to purchase  one share of
common stock for $2.50 and one Class B Warrant. On May 1, 1996, all underwriters
warrants  remained  unexercised  and terminated.  At December 31, 1996,  235,900
shares of Convertible Preferred Stock were outstanding. Pending effectiveness of
a  post-effective   amendment  to  the  Company's  registration  statement,  the
outstanding  Preferred  Stock,  Class A Warrants and Class B Warrants  cannot be
converted or exercised.


                                      F-11
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 6 - Shareholders' Equity (Continued)


     On May 31, 1995, the Company entered into an investment  banking  agreement
for a five year  period.  In  consideration,  the  Company  issued  warrants  to
purchase  567,503  shares of the Company's  common stock at an exercise price of
$.135 per share.  The warrants are  exercisable  for five years,  commencing  at
various  dates from May 31, 1996 to May 31,  2001.  At December  31,  1996,  all
warrants were outstanding.  In connection with the investment  banking agreement
and the services  provided to complete that  agreement,  the Company issued to a
consultant,  warrants to purchase 56,750 shares of the Company's common stock at
an exercise price of $.135 per share.  These warrants are  exercisable  for five
years,  commencing  at  various  dates  from May 31,  1996 to May 31,  2001.  At
December 31, 1996, all warrants were outstanding.

NOTE 7 - Related Parties

     The  Company  paid  rent  under two  sub-leases  during  1996 and 1995,  to
companies  affiliated with the Chief Executive Officer. The rents paid and terms
under the subleases are  substantially  the same as those under the  affiliate's
lease  agreements with the landlords.  Rent expense for the years ended December
31, 1996, and 1995 was approximately $95,000 and $71,000, respectively (see Note
8). In prior years,  the Company made advances to or received  advances from the
affiliates for working capital requirements.  As a result, at December 31, 1996,
the balances due from one affiliate was approximately $5,000 and the balance due
to the second affiliate was approximately $2,000.

     The  Company  acquired  distribution  rights  to two  films  from a company
affiliated with the Chief Executive Officer for a ten year license period, which
expires  on June  5,  1998.  The  Company  is  obligated  to pay the  affiliated
producers  fees at the contract  rate.  Such  payments  will be charged  against
earnings.  In 1996 and 1995,  no  payments  were made to the  affiliate,  and no
revenue was recognized.

     The  Company  owns  distribution  rights to two films  which were  acquired
through  a company  affiliated  with the Chief  Executive  Officer,  that is the
exclusive  agent for the producers.  This  exclusive  agent is 100% owned by the
principal  shareholder of the Company, but receives no compensation for the sale
of the licensing rights. Additionally,  after recoupment of original acquisition
costs, the principal  shareholder has a 5% interest as a producer in the revenue
received by the  unaffiliated  entities.  The  Company  has  received no revenue
relating to these films during 1996 and 1995.

     In prior years, the Company received  advances from and made advances to an
affiliated  company,  owned 50% by the principal  shareholder of the Company. At
December  31, 1996 and 1995,  the  outstanding  balance,  due upon  demand,  was
approximately  $55,000.  No advances were made to or received from the affiliate
in 1996.

     Throughout 1996, the Company's principal shareholder and officer made loans
to, and payments on behalf of the Company and received payments from the Company
from time to time.  The largest  balance due from the officer was  $28,669.  The
outstanding balance due from the officer at December 31, 1996, was $23,318.

     One of the Company's  directors was a partner in a law firm engaged by the
Company as general counsel.  As  consideration for his efforts on behalf of the
Company, the Board Member received 50,000 Shares, valued at $4,500. During 1995,
the law firm billed  approximately  $156,000 in fees,  and at December 31, 1996,
the outstanding balance due the firm was approximately $100,000.

     The  Company's  President  and Chief  Executive  Officer  (see Note 6), was
issued 670,000 shares of common stock, valued at $45,931.  Further,  the Company
issued 150,000 shares valued at $9,400 to directors.

NOTE 8 - Commitments and Contingencies

  Leases

     The Company leased its office  facilities  under two  subleases.  One lease
expires in November 1997 and the other in May 2002 (see Note 7). Future  minimum
annual base rental commitments as of December 31, 1996 are as follows:

                                      F-12
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 8 - Commitments and Contingencies (Continued)


                1997                     $ 69,520
                1998                       59,936
                1999                       61,962
                2000                       63,988
                2001                       66,014
                Thereafter                 27,013
                                         --------
                                         $348,433
                                         ========


  License Agreements

     In some  instances,  film licensors have retained an interest in the future
sale of  distribution  rights owned by the Company above the guaranteed  minimum
payments.  Accordingly,  the Company may become obligated for additional license
fees as sales occur in the future.

  Employment Agreement

     In April 1996,  the Company  entered into an  amendment  to the  employment
agreement with the President and Chief Executive  Officer of the Company.  Under
the terms of the agreement, as amended, the officer will remain employed through
April 2000, at an annual salary of $150,000  adjusted annually for the CPI index
beginning  in 1995.  The  officer  will also  receive  reimbursement  of certain
expenses  and  insurance  (see Note 7) and certain  options to and shares of the
Company's  common  stock (see Note 6).  Additionally,  the  officer  may, in the
future,  receive  shares of the  Company's  common  stock as  consideration  for
raising funds for the Company.  Further, should the officer become disabled, the
Company is obligated to provide disability income for four years.

     Under the terms of this employment  agreement,  the Chief Executive Officer
of the Company is entitled  to receive a cash bonus when the  Company's  pre-tax
profit exceeds $100,000.

     Additionally, if during the term, the employment agreement is terminated by
the Company after a change in control (as defined by the agreement), the officer
is entitled to a lump sum cash payment  equal to  approximately  three times his
base salary.

     Mr.  Vazquez has an  employment  agreement  with PCI,  Inc. a  wholly-owned
subsidiary of the Company,  which expires on June 30, 1998, and provides for his
employment  as  President  of the  subsidiary  at an annual  salary of $200,000,
including   $135,000  in  cash  and  $65,000  in  the  Company's  Common  Stock.
Additionally, Mr. Vazquez is entitled to an annual bonus to be determined by the
Board of Directors of the Company and options to purchase  590,000 shares of the
Company's  Common Stock under the Company's  1996  Incentive  Stock Option Plan.
Such options will vest as Mr.  Vazquez  achieves  certain  annual gross  revenue
thresholds,  ranging  from  $1,000,000  to  $5,000,000  during  the  term of his
employment agreement.

Consulting Agreements

     The  Company  has,  over the past  several  years,  worked  closely  with a
healthcare professional who has participated with the Company for the purpose of
bringing to the Company both health insurance  company group plan customers,  as
well  as,  professional   healthcare  providers  and  networks.  The  healthcare
professional  has assisted in arranging the  relationships  between the Company,
the  Guardian,  and the  network of  providers  currently  under  contract  with
Containment.






                                      F-13
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 8 - Commitments and Contingencies (Continued)

     The agreement with the healthcare  professional for his services  continues
until  December 31, 1997 and provides  that the Company will pay the  healthcare
professional  commissions at varying rates and grant options to purchase  common
stock if certain  contracts are renewed or certain  revenue levels are
achieved.

     Based upon the  contracts  existing as of December 31, 1996 and through the
remaining term of the contracts, should certain financial goals be achieved, the
healthcare  professional  has a total  potential of receiving  1,550,000  common
share purchase  options at exercise  prices varying from $.19 to $.50 per share.
At December 31, 1996, none of the options were granted.

Preemptive Rights

     Shareholders  of a New  York  corporation  have  preemptive  rights  unless
otherwise provided in the certificate of incorporation or bylaws. Until February
12, 1997, the Company's  Certificate of Incorporation did not limit or eliminate
the Shareholders' preemptive rights.  Accordingly,  if the Company were to offer
to sell for cash additional shares of common stock or shares convertible into or
exchangeable for common stock, each Shareholder would have the right to purchase
that number of shares as would enable him to maintain his proportionate interest
in the Company's common stock.

     The Company has recently determined that, notwithstanding the Shareholders'
preemptive  rights,  the  Company  has  issued  shares on a number of  occasions
without offering preemptive rights to existing Shareholders or procuring waivers
of their preemptive  rights.  No Shareholder has alleged any damage resulting to
him as a result of the sale of shares of  common  stock by the  Company  without
offering  preemptive  rights.  The amount of damages incurred by Shareholders by
reason of failure to offer preemptive  rights, if any, is not ascertainable with
any  degree  of  accuracy.  Management  believes  that if any such  claims  were
asserted, the Company may have valid defenses.

Litigation

     In December  1996, an action was filed in the Superior Court of New Jersey,
by MediChoice  Network,  Inc. against Juniper  Healthcare  Containment  Systems,
Inc.,  a  subsidiary  of the Company for damages in the amount of  approximately
$197,000.  The  claim  alleges  failure  to pay for  services  provided  under a
contract.  A default  judgment in the amount of $197,000 was entered against the
Company for failure to answer the  original  complaint in a timely  fashion.  An
application is currently pending to vacate the default.  The Company believes it
is  entitled  to  damages  against  the  Plaintiff  and that it has  meritorious
defenses  to the claim,  but,  it intends to seek a  settlement  of the  matter.
Management believes the outcome of this matter will have no material effect upon
the financial condition of the Company.

     In February 1997, a law firm  commenced an action against two  subsidiaries
of the  Company.  The  actions  seek  damages  for  legal  services  aggregating
approximately $13,600.  Concurrently,  the Company became aware of an unasserted
claim by two  shareholders  of the Company,  one of whom is the spouse of one of
the claimant-attorneys,  for damages for alleged stock manipulation.  Management
believes that the allegations  are without merit and will vigorously  defend any
such claim.  Currently,  the Company is engaged in  settlement  negotiations  to
resolve all three matters and avoid unnecessary litigation expenses.  Management
believes that the outcome of these matters will not have a material  effect upon
the financial condition of the Company.

     In May 1995 an individual  commenced an action against the Company seeking
damages  in the amount of  $100,000  for each of seven  alleged  acts of willful
infringement,  or in the alternative  $20,000 for each of the seven alleged acts
for  unintentional  infringement,  plus a  return  of the  film,  together  with
attorney's  fees. The individual  alleged that he licensed the picture to Double
Helix Films, Inc. ("Helix") and that, pursuant to that license agreement,  Helix
failed to make payment to the  individual.  It is further alleged that by reason
of Helix's breach of the agreement,  all rights granted to Helix had reverted to
the  individual.  The  individual's  claim against the Company is based upon the
Company's  distribution of the picture  (pursuant to the sub-license from Helix)
after the  purported  termination  of the  license  to  Helix.  The  Company  is
vigorously  defending  the  action  and  asserts  that  under  the  individual's
agreement with Helix,  the reversion did not affect the Company's  rights to the
picture.  Management  believes  that the  outcome of this matter will not have a
material effect upon the financial condition of the Company.

     On May 22, 1996, two parties  commenced an action against the Company,  its
CEO and an affiliate of the CEO seeking damages in the amount of $464,470,  plus
interest  alleging  that the  Company  has  successor  liability  for a judgment
entered  in March of 1993 by the  Plaintiffs  against  Juniper  Releasing,  Inc.
("Releasing"),  a company  affiliated with the Company's CEO. It is alleged that
the  Company  was formed as a successor  to  Releasing  and that the Company and
others  transferred  assets out of Releasing to avoid the payment of Releasing's
creditors.  The Company is vigorously defending the allegations and has asserted
that the claims are without merit and are time barred.  Management  believes the
outcome  of this  matter  will not have a  material  effect  upon the  financial
condition of the Company.

Going Concern

As shown in the accompanying financial statements, the Company's:

* Revenue decreased to $2,503,000 in 1996, from $3,596,000 in 1995;
* Net loss increased to $(690,160) in 1996, from $(175,574) in 1995;
* Working capital  decreased from a positive  $12,000 at December 31, 1995, to a
  negative $360,000 at December 31, 1996.

     The fact  that the  Company  continued  to  sustain  losses  in 1996;  has
negative  working  capital at December 31, 1996; and still  requires  additional
sources of outside cash to sustain  operations,  continues to create uncertainty
about the Company's ability to continue as a going concern.

     Management  of the Company has  developed a plan to reduce its  liabilities
and improve cash flow through expanding  operations and raising additional funds
either  through the  issuance  of debt or equity.  The ability of the Company to
continue as a going  concern is dependent  upon the Company's  ability to raise
additional  funds either  through the issuance of debt or the sale of additional
common  stock and the success of  Management's  plan to expand  operations.  The
Company  anticipates  that it will be able to raise the  necessary  funds it may
require for the remainder of 1997 through public or private sales of securities.
The financial  statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.





                                      F-14
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 9 - Incentive Compensation Plans

1989 Restricted Stock, Non-Qualified and Incentive Stock Option Plan

     On December 7, 1989, a restricted stock,  non-qualified and incentive stock
option plan was adopted.  The Company has  authorized  375,000  shares of common
stock to be  reserved  for  issuance  thereunder.  Under the terms of this plan,
restricted   stock   awards  are   authorized   for   employees.   Additionally,
non-qualified  options may be granted to employees,  directors,  consultants and
others who render  services to the  Company.  Under the terms of the  restricted
stock awards,  restricted  stock may be issued to employees in  consideration of
(i) cash in an amount not less than the par value thereof or such greater amount
as may be determined by the Compensation Committee of the Board of Directors and
(ii) the continued employment of the employees during the restricted period. The
Compensation Committee sets the terms of the restricted period, which will in no
event be less than one year.  Pursuant to the plan, during 1995, 250,000 options
were issued to the President (see Note 6).

     During  1996,  the Board of  Directors  authorized  the  issuance of 85,820
shares of restricted  common stock,  under the incentive  compensation  plans to
employees. These shares were valued at $18,132 (see Note 5).

     Under the Non-Qualified  Option aspect of the Incentive  Compensation Plan,
options  may  be  granted  to  employees,   directors,   consultants  and  other
individuals who render services to the Company. The option price for each option
granted will be determined by the Compensation Committee.  Each option will have
a term of not more than 10 years  from the date of grant and may be  exercisable
in installments as prescribed by the Compensation Committee.

     The Company's  Incentive Stock Option aspect of the Incentive  Compensation
Plan provides for the grant to employees of incentive options to purchase shares
of common stock of the Company at option prices which are not less than the fair
market value of the Company's common stock at the date of grant, except that any
Incentive  Option granted to an employee  holding 10% or more of the outstanding
voting  securities of the Company must be for an option price not less than 110%
of fair market value.

     Incentive Options granted under the Incentive Compensation Plan will expire
not more than 10 years from the date of the grant  (five  years from the date of
the grant in the case of a 10% Stockholder), and the Incentive Option agreements
entered  into with the holders  will  specify the extent to which the  Incentive
Options may be exercised  during their  respective  terms.  The  aggregate  fair
market  value of the shares of common stock  subject to  Incentive  Options that
become first  exercisable  by an optionee in a particular  calendar year may not
exceed $100,000.

1996 Stock Option Plan

     On February 12 , 1997,  the  shareholders  of the Company  adopted the 1996
Stock Option Plan. The Plan  supplements  the Company's 1989  Restricted  Stock,
Non-Qualified  and Incentive  Stock Option Plan. This Plan allows the Company to
grant   incentive   stock  options,   non-qualified   stock  options  and  stock
appreciation rights (collectively "options"), to employees,  including officers,
and to non-employees  involved in the continuing  development and success of the
Company.  The  terms  of the  options  are to be  determined  by  the  Board  of
Directors.  Options will not have expiration dates later than ten years from the
date of  grant  (five  years  from  the  date of the  grant in the case of a 10%
Stockholder).  The Option  Prices may not be less than the fair market  value of
the common  shares on the date of grant,  except  that any option  granted to an
employee holding 10% or more of the outstanding voting securities of the Company
must be for an option price not less than 110% of fair market value.

Statement of Financial Accounting Standards No. 123

     At December 31, 1996, the Company had one  stock-based  compensation  plan,
which is described  above.  The Company  applies APB Opinion 25,  Accounting for
Stock Issued to Employees,  and related  Interpretations  in accounting  for its
plan. Accordingly,  no compensation cost has been recognized for its fixed stock
option plan or for options issued to non-employees for services  performed.  Had
compensation  costs for these options been determined,  based on the fair market
value at the grant  dates  consistent  with the  method of FASB  Statement  123,
Accounting for Stock-Based  Compensation,  the Company's net income and earnings
per share would have been reduced to the pro forma amounts indicated below:

                                      F-15
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)



NOTE 9 - Incentive Compensation Plans (Continued)

                                                       1996         1995
                                                       ----         ----
Net income (loss) ................ As reported    $  (690,160)   $(175,574)
                                   Pro forma      $  (988,824)   $(507,649)

Earnings (loss) per share          As reported    $    (0.04)    $  (0.02)
                                   Pro forma      $    (0.06)    $  (0.04)


NOTE 10 - Income Taxes

     For the years ended  December 31, 1996 and 1995,  no provision was made for
Federal and state income  taxes due to the losses  during  those  periods.  As a
result of losses  incurred  through  December  31,  1996,  the  Company  has net
operating loss  carryforwards of approximately  3,620,000.  These  carryforwards
expire $510,000 in 2006, $1,451,000 in 2007, $165,000 in 2008, $716,000 in 2009,
$231,000 in 2010, and $547,000 in 2011.

Deferred Tax Assets

     In accordance with Financial  Accounting  Standards Board Statement No. 109
"Accounting  for Income Taxes",  the Company  recognized  deferred tax assets of
$1,484,000,  at December  31,  1996.  Since the Company is  dependent  on future
taxable  income to realize  deferred  tax assets,  the  Company  has  recorded a
related valuation  allowance of $1,484,000.  Deferred tax assets as December 31,
1996 primarily reflect the tax effect of net operating loss carry forwards.

NOTE 11 - Business Segment Information

     The  operations  of the  Company are divided  into two  business  segments:
healthcare - consisting of managed care revenue  enhancement and healthcare cost
containment  services;  and  entertainment  - consisting of the  acquisition and
distribution  of rights to films.  The Company  markets its managed care revenue
enhancement   services   throughout  the  United  States;  its  healthcare  cost
containment services are predominantly  located in the Northeast;  and films are
available to be marketed throughout the world.

         Financial information by business segment is as follows:

                                1996           1995
                                ----           ----
Revenue:
      Healthcare ........   $ 2,388,538    $ 3,585,923
      Entertainment .....       114,650         10,000
                            -----------    -----------
                            $ 2,503,188    $ 3,595,923
                            ===========    ===========

 Operating Income (Loss):
      Healthcare ........   $   321,401    $   610,981
      Entertainment (1) .      (186,974)       (85,650)
      Corporate .........      (824,587)      (700,905)
                            -----------    -----------
                            $  (690,160)   $  (175,574)
                            ===========    ===========

(1) Includes a loss on Settlement with Producer of $150,000 in 1995.







                                      F-16
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 11 - Business Segment Information (Continued)

                               1996         1995
                               ----         ----
Identifiable Assets:
     Healthcare .........   $  690,361   $  626,145
     Entertainment ......    3,262,841    3,283,005
     Corporate ..........      127,140      367,101
                            ----------   ----------
                            $4,080,342   $4,276,251
                            ==========   ==========

    Depreciation:
     Healthcare .........   $   11,850   $    8,400
     Corporate .                30,916       30,008
                            ----------   ----------
                            $   42,766   $   38,408
                            ==========   ==========

    Capital Expenditures:
     Healthcare .........   $    3,182   $     --
     Corporate ..........       31,619      101,321
                            ----------   ----------
                            $   34,801   $  101,321
                            ==========   ==========


    NOTE 12 - Quarterly Results of Operations (Unaudited)

     Below is a summary of the quarterly  results of operations for each quarter
of 1996 and 1995:
<TABLE>
<CAPTION>

 1996                                     First         Second          Third         Fourth
<S>                                  <C>            <C>            <C>            <C>
Revenue ..........................   $   667,522    $   486,202    $   597,452    $   752,011
Gross profit .....................       255,754        190,197        285,266        453,428
                                         -------        -------        -------        -------

Net income (loss) ................   $   (69,705)   $  (140,519)   $  (162,415)   $  (317,521)
                                         =======       ========       ========       ========
Net income (loss) per common share   $      (.01)   $      (.01)   $      (.02)   $      (.04)
                                            ====           ====           ====           ====

1995
Revenue ..........................   $   847,282    $ 1,155,035    $   903,810    $   689,796
Gross profit .....................       263,691        406,717        360,050        226,624
                                         -------        -------        -------        -------
Net income (loss) ................   $   (23,032)   $    71,852    $   (36,042)   $  (188,352)
                                         =======         ======        =======       ========

Net income (loss)
   per common share ..............   $     (0.00)   $    (0.00)    $     (0.00)   $     (0.01)
                                           =====          =====          =====          =====
</TABLE>

NOTE 13 - Subsequent Events

     Annual Meeting of Shareholders

     On February 12, 1997, the Company held its annual meeting of  shareholders.
The following  proposals  were among those approved by the  shareholders  of the
Company:

* To amend the Certificate of Incorporation of the Company to change the name of
the Company from Juniper Features, Ltd. to Juniper Group, Inc.

* To amend the  Certificate  of  Incorporation  of the Company to eliminate  the
preemptive rights of holders of the Company's common stock (see Note 8).

* To amend the  Certificate  of  Incorporation  of the Company to  increase  the
authorized  common stock of the Company from  20,000,000  shares to  300,000,000
shares.

* To approve the Company's 1996 Stock Option Plan (see Note 9).

                                      F-17
<PAGE>








                                   SIGNATURES

     In accordance  with section 13 or 15(d) of the  Securities  Exchange Act of
1934,  the  Registrant  caused  this  report to be  signed  by the  undersigned,
thereunto duly authorized.


Date: March 26, 1997                        JUNIPER GROUP, INC.



                                            By: /s/ Vlado Paul Hreljanovic
                                                  Vlado Paul Hreljanovic
                                                  President and
                                                  Chief Executive Officer


     In accordance  with 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.


Signatures                             Titles                       Date


By:/s/ Vlado Paul Hreljanovic      Chairman of the Board,
   Vlado Paul Hreljanovic          President, Chief Executive
                                   Officer (Principal Executive
                                   and Financial Officer)       March 26, 1997


By: /s/ Harold A. Horowitz          Director                    March 26, 1997
   Harold A. Horowitz



By:/s/Peter W. Feldman              Director                    March 26, 1997
   Peter W. Feldman


<PAGE>




                                EXHIBIT INDEX





Exhibit                            Description

 3.2  Amendment to the Certificate of Incorporation of the Registrant, filed
      March 7, 1997.

10.5  Joint Venture Agreement between Juniper Healthcare Containment
      Systems, Inc. and Health Containment Corporation dated March 1, 1996

10.6  Employment Agreement between PCI, Inc. and Richard O. Vazquez, dated
      June 7, 1996

21.1  Susidiaries

23.1  Consent of Independent Certified Public Accountants

27.1  Financial Data Schedule