UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB


(Mark One)
 [X] Annual report under Section 13 or 15(d) of the  Securities  Exchange Act of
1934 for the fiscal year ended June 30, 1996

[ ]  Transition report under Section 13 or 15(d) of the Securities  Exchange Act
of 1934 (No fee required) for the transition period from ____________________ to
_______________________.



Commission file number:  0-19069

                                  ATC II, INC.
                 (Name of Small Business Issuer in Its Charter)

             Delaware                                      75-2395356
(State or Other Jurisdiction of                         (I.R.S. Employer
Incorporation or Organization)                          Identification No.)

            268 West 400 South, Suite 300 Salt Lake City, Utah 84101
               (Address of Principal Executive Offices) (Zip Code)

                                 (801) 575-8073
                (Issuer's Telephone Number, Including Area Code)


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

                          Common Stock, $0.01 Par Value
                                 Title of Class

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

                                    Yes  X  No

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

The issuer had no revenues for the year ended June 30, 1996.

The aggregate market value of the voting stock held by  non-affiliates  computed
by reference  to the average bid and asked  prices of such stock,  as of October
14,  1996,  was $0.00,  because the  Company's  Common Stock was not traded on a
stock market or quotation system.
es:
    The number of shares  outstanding  of the issuer's  common stock ($0.01 par
value), as of October 14, 1996 was 4,996,811.

                                   Total of Sequentially Numbered Pages:      19
                                                  Exhibit Index on Page:      16
<PAGE>
                                TABLE OF CONTENTS


                                     PART I

ITEM 1.   DESCRIPTION OF BUSINESS..............................................3

ITEM 2.   DESCRIPTION OF PROPERTY..............................................5

ITEM 3.   LEGAL PROCEEDINGS....................................................5

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................. 7

                                     PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER  MATTERS............7

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF   OPERATION..........7

ITEM 7.   FINANCIAL STATEMENTS ................................................9

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.......................10

                                    PART III

ITEM  9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
            COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT................ 10

ITEM 10.  EXECUTIVE COMPENSATION..............................................10

ITEM 11.  SECURITY OWNERSHIP OF BENEFICIAL OWNERS.............................11

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......................12

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K....................................14

                  SIGNATURES..................................................15

                  INDEX TO EXHIBITS...........................................16

<PAGE>
                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS

Business Development

         ATC II,  Inc. is a Delaware  corporation  with  corporate  headquarters
located in Salt Lake City,  Utah.  Hereinafter,  unless  the  context  indicates
otherwise,  the term "Company"  refers to ATC II, Inc., and its predecessors and
former  subsidiaries.  The  Company was  originally  organized  as ATC,  Inc. on
February  7, 1979 under the laws of British  Columbia,  Canada.  The Company was
redomiciled  as a Delaware  corporation  on November 20,  1990.  On December 13,
1990,  Amertelco,  Inc., a Delaware  corporation  and then the sole owner of the
Company,  merged into the Company.  The Company adopted its present name on July
27, 1993 in conjunction with the revival of its charter under Delaware law.

         From July 1984 through June 1992,  the Company's  primary  business was
conducted through its former subsidiary,  American  Telecommunications  Corp., a
Texas corporation ("American"),  which provided long-distance telecommunications
management  services  to the  hotel  industry.  On June 18,  1992,  the  Company
liquidated  its  interest  in  American.  For  more  information  on the sale of
American and the  litigation  which  resulted from this sale,  see the Company's
Form  10-KSB for fiscal  year  ended  June 30,  1995 and "Item 6 -  Management's
Discussion and Analysis or Plan of Operation."

         On August 31, 1993, the Company acquired all outstanding  capital stock
of  Carnegie  Film  Group,  Inc.  ("Carnegie")  in  exchange  for  shares of the
Company's common stock, par value $0.01 ("Common  Stock").  On the same day, the
Company acquired a $3.6 million  promissory note payable by Carnegie in favor of
Communications  and Entertainment  Corporation  ("ComEnt").  In exchange for the
note,  the Company  issued  shares of Common  Stock and  3,076,923  shares of 4%
Series A Cumulative Convertible Preferred Stock. The Company also guaranteed the
payment of a separate  $350,000  demand  note  executed  by Carnegie in favor of
ComEnt Funding Corp. ("ComEnt Funding"),  a subsidiary of ComEnt.  Subsequently,
the Company  itself  borrowed an additional  $150,000,  payable on demand,  from
ComEnt Funding.

         ComEnt filed suit against the Company due to the  Company's  failure to
make payments on the note the Company had  executed,  as well as the note it had
guaranteed. The lawsuit was dismissed pursuant to a Settlement Agreement entered
by and between the Company,  ComEnt,  ComEnt  Funding and Carnegie on August 15,
1994. Pursuant to the Settlement Agreement, which led to the cancellation of all
of ComEnt's  3,076,923  shares of Series A Convertible  Preferred  Stock and the
issuance  of 900,000  shares of a new Series B  Convertible  Preferred  Stock to
ComEnt.

         On October 2, 1995, the Company paid ComEnt Funding $20,000 in exchange
for the redemption of all Series B Convertible Preferred Stock and in settlement
of all claims.  This  payment  extinguished  all debts owed to ComEnt and ComEnt
Funding,  including all accrued  dividends on the preferred stock. All shares of
the Series B Convertible Preferred Stock were ultimately canceled by the Company
on July 2, 1996. For more  information  regarding the purchase of Carnegie,  see
the  Company's  Form 10-KSB for fiscal year ended June 30, 1995.  The Company no
longer has any shares of preferred stock outstanding.

         On  November  5,  1993,  the  Company  formed  Filmways   Entertainment
Corporation, a Delaware corporation ("Filmways"),  for the purpose of acquiring,
producing and marketing feature length films.

         From  August  1993  through  June  1994,  the  Company's  subsidiaries,
Carnegie and  Filmways,  engaged in the  distribution  of feature  length motion
pictures.  During the 1994 fiscal year, these subsidiaries discontinued all film
distribution  operations.  Effective June 23, 1994, the Company sold any and all
rights,  title and  interest it had in the common  stock of Carnegie to National
Media Inventory,  Inc. ("NMI"), an affiliate of the Company. In exchange for the
capital stock of Carnegie,  the Company received advertising credits in a weekly
Spanish language newspaper and a Spanish advertising circular. These advertising
credits were  subsequently  transferred  to ComCentral as settlement  for claims
ComCentral  had  asserted  against  the  Company.  For more  information  on the
disposition  of Carnegie,  see the  Company's  Form 10-KSB for fiscal year ended
June 30, 1995.
<PAGE>
         Effective  September 1, 1994, the Company transferred all of its rights
and interests in the stock of Filmways to Xeta Corporation pursuant to the order
of the United States District Court for the Northern  District of Oklahoma.  For
more information on this transfer to Xeta, see "Item 3 - Legal Proceedings."

         The Company,  through its  subsidiary,  Thistle  Properties,  Inc.,  an
Illinois  corporation  ("Thistle"),  entered into a Real Estate Sales  Agreement
dated June 20, 1994 (the "RES  Agreement").  Through the RES Agreement,  Thistle
purchased a manufacturing  plant located in Canton,  Illinois from  CyberAmerica
Corporation,   a  Nevada   corporation  then  known  as  The  Canton  Industrial
Corporation ("CyberAmerica").  From June 20, 1994 to May 12, 1995, Thistle owned
and managed the manufacturing  plant. On May 4, 1995,  Thistle received a Notice
of Default from CyberAmerica.  Thistle subsequently  informed  CyberAmerica that
due to Thistle's poor financial position,  neither Thistle nor the Company would
be able to  comply  with the  terms of the  Note.  Thistle,  with the  Company's
approval,  proposed to forfeit all payments  made to  CyberAmerica  and to allow
CyberAmerica  to  foreclose on the security  (100% of Thistle's  capital  stock)
provided by the Amended RES  Agreement in exchange  for a mutual  release of all
claims.  Effective  May 12,  1995,  the Company  and  Thistle  executed a Mutual
Release with  CyberAmerica,  through  which 100% of the capital stock of Thistle
was   transferred  to   CyberAmerica.   For  more   information  on  the  Canton
Manufacturing  plant,  see the Company's  Form 10-KSB for fiscal year ended June
30, 1995.

         Thistle entered into a Textile  Purchase  Agreement dated June 20, 1994
with Carousel,  Inc., a Utah  corporation,  pursuant to which Thistle  purchased
commercial  textiles in exchange for shares of Common  Stock.  On June 30, 1994,
the Company entered into Exchange  Agreements with Asset  Management  Trust, San
Pedro Securities,  Global Market Systems, and David Newren pursuant to which the
Company acquired  additional prepaid advertising  credits.  The textiles and due
bills were  transferred to ComCentral  according to the Compromise,  Release and
Indemnification  Agreement. For more information on this settlement, see "Item 6
- Management's Discussion and Analysis or Plan of Operations."

         Pursuant to a June 30, 1995 Purchase  Agreement  with Turner,  Turner &
Associates, a Washington corporation ("TTA"), the Company acquired the exclusive
right to license  products  produced under U.S.  Patents  Numbers  5,296,216 and
5,306,509 (the "Patents").  The Patents relate to an oral lavage,  the trademark
of certain products, and a protocol known as STOMASTAT(TM). In development since
1983, STOMASTAT(TM) is a peroxide and bicarbonate-based  solution that cleanses,
irrigates, and protects the oral cavity from stomatitis, a process which results
in mouth  ulcers or canker  sores.  The  Purchase  Agreement  was  rescinded  in
February 1996 because several  conditions of the Purchase Agreement had not been
met and both the  Company  and TTA  desired  an  alternative  structure  for the
purchase.  After  several  months of  unsuccessful  negotiations,  both  parties
decided to abandon this transaction.

Business of Issuer

         Due to the  liquidation  of Carnegie and Filmways and the  surrender of
Thistle to CyberAmerica,  the Company no longer has any operating  subsidiaries.
The  Company's  business is now  directed  toward  finding a suitable  merger or
acquisition  candidate who can provide the Company with the basis for successful
operations.  Since the  Company  lacks  significant  cash  flow,  any  merger of
acquisition  effected by the  Company  will  involve the  issuance of its Common
Stock.  As of the date of this  filing,  the  Company has  identified  potential
merger  and  acquisition  candidates;  however,  all  negotiations  are  in  the
preliminary stages and no definitive agreements have been reached.

         To help it find an appropriate  reorganization partner, the Company has
retained  the  services  of  Canton  Financial  Services  Corporation,  a Nevada
corporation  ("CFS").  CFS  provides  financial  consulting  services  including
preparing necessary documentation for capital raising,  handling shareholder and
public  relations  work,  and  introducing  the  Company  to  suitable  business
opportunities.  CFS introduced  the Company to TTA. CFS was originally  retained
pursuant to a June 30, 1994  Consulting  Agreement  which has been  renewed on a
month-to-month basis since that date. According to that Agreement,  CFS receives
a $30,000 monthly fee which the Company can pay in cash or by issuing restricted
common stock to CFS. CFS is a subsidiary of the aforementioned CyberAmerica. For
more  information  on  both  CFS  and  CyberAmerica,  see  "Item  12  -  Certain
Relationships and Related Transactions."
<PAGE>
         The  Company  has no full  time  employees.  However,  pursuant  to the
consulting agreement with CFS, the Company receives  consulting,  administrative
and other services from CFS as needed.  CFS employs  approximately  40 full-time
employees, many of whom rendered services to the Company during the fiscal year.

ITEM 2.           DESCRIPTION OF PROPERTY.

         In August 1996, the Company  relocated its corporate  headquarters from
6701 Baum Drive, Suite 345, Knoxville,  Tennessee,  37919 to 268 West 400 South,
Suite 300, Salt Lake City,  Utah,  84101.  This office space is currently  being
leased by the Company pursuant to the Consulting Agreement with Canton Financial
Services  Corporation.  The  Company  does  not own any  property,  and does not
anticipate the purchase of additional property in the near future.

ITEM 3.           LEGAL PROCEEDINGS

         The  Company  knows  of  no  material  legal  proceedings  or  material
developments in any legal proceedings involving the Company or its subsidiaries,
other than those discussed  below.  However,  due to the recent  resignations of
officers and directors of the Company and the  discontinuation of the businesses
of some  of the  Company's  subsidiaries,  there  may be  other  material  legal
proceedings  pending or  threatened  against the Company,  its  subsidiaries  or
former officers and directors of which current management is not aware.

         On February 5, 1993,  BG Acorn  Capital  Fund, a trust formed under the
laws of the Province of Ontario, Canada (the "Trust"), filed suit in the Supreme
Court of  British  Columbia  against  the  Company  and former  officers  of the
Company,  Richard L. Liu and Raymond R.  Cottrell.  The Trust  contends that the
Company  owed it $500,000  plus  interest at 10% from  December  1990 and sought
costs and further relief for the Company's  failure to repay  indebtedness.  The
Trust  alleged  that  funds  advanced  to  the  Company's  subsidiary,  American
Telecommunications Corp., were for the benefit of, and used by, the Company. The
Trust received a judgment  against  American  prior to filing this lawsuit.  The
Company contends that the court does not have  jurisdiction over it and that the
money is owed by  American,  not the  Company.  This action was set for trial on
September  7, 1994,  but the Trust did not proceed to trial at that time.  Trial
could be rescheduled by the Trust.

         On  October  6,  1993,  The  Private  Lessons  Partnerships,   L.P.,  a
California limited partnership ("PLP"),  filed suit in the Superior Court of the
State of California for the County of Los Angeles against the Company, Filmways,
Carnegie,  the officers of Filmways and Carnegie,  and other defendants.  PLP is
seeking  compensatory  damages of $315,000 and  punitive  damages for an alleged
breach of a distribution agreement and fraud. PLP has attached Carnegie's assets
in  California.  The suit  results  from an  alleged  breach  of a  distribution
agreement and fraud. The Company is defending the lawsuit on the grounds that it
is not  liable  for the  breach,  if any,  since  the  agreement  was  with  its
subsidiaries.

         On  September  18,  1992,  Xeta  Corporation,  an Oklahoma  corporation
("Xeta"),  filed  suit in the  United  States  District  Court for the  Northern
District  of  Oklahoma,  against the  Company  based on the alleged  breach of a
security  agreement.  On August 26, 1993, Xeta obtained Summary Judgment against
the Company and American in the principal sum of $119,379.42 plus $30,479.72 for
attorney's fees and costs.  The Company accrued the amount of the judgment as an
expense.  In December  1993,  the Company filed an appeal with the Tenth Circuit
Court of Appeals, challenging the Summary Judgment on various procedural issues.
The Company was  represented  by local  counsel on September  26, 1994,  at oral
arguments  of such  appeal.  On October 10,  1994,  the Tenth  Circuit  affirmed
Summary Judgment.  On July 21, 1994,  following several asset hearings and other
collections efforts, the Court issued an Order for Judgment Debtor to Appear and
Turn Over Assets and Property to the Plaintiff  (the  "Order").  Pursuant to the
Order,  the Company  transferred all outstanding  shares of the capital stock of
Filmways to Xeta.
<PAGE>
         On March 8,  1995,  Xeta  filed a  related  suit in the  United  States
District Court, in the Central District of Utah, case number 95CV-218G.  In this
suit,  Xeta is seeking to recover  $116,500  which it contends was  fraudulently
conveyed by the Company in order to avoid  payment on the judgment held by Xeta.
Xeta  brought suit against  CyberAmerica  Corporation  (then known as The Canton
Industrial Corporation),  the recipient of the alleged fraudulent conveyance, as
well as Richard Surber and Dr. Gerald  Curtis,  both directors of the Company at
the time of the transfer. On April 16, 1996, the Court announced its decision to
grant Xeta's Motion for Summary Judgment against CyberAmerica, but denied Xeta's
motion in regard to Mr.  Surber and Dr.  Curtis.  CyberAmerica  has appealed the
granting of Summary  Judgment  and that  appeal is  currently  pending.  If Xeta
ultimately   prevails  in  this  litigation,   CyberAmerica   will  likely  seek
indemnification against the Company for the full $116,500.

         In  February  1994,  Strategic  Growth  International,   Inc.  filed  a
complaint  in the  Supreme  Court of the  State of New York,  County of  Nassau,
against  the  Company in the amount of  approximately  $89,000 for an unpaid fee
allegedly  earned pursuant to a contract for investor  relations  services.  The
Company's  management  has  terminated the contract and is attempting to reach a
settlement.  If a  reasonable  settlement,  in light  of the  facts  and  actual
services  performed,  cannot be  reached,  the  Company  intends to defend  this
lawsuit to the extent the Company's resources permit it to do so.

         On December 30, 1994, Krishna Shah, an individual, filed a complaint in
the Superior  Court for the State of  California,  County of Los  Angeles,  case
number BC119166.  The complaint was filed against N. Norman Muller,  ComEnt, the
Company,  Carnegie Film Group, Jerry Minsky,  Perry Scheer,  Susan Bender, Larry
Meyers,  Robert E. Hesse and Double Helix Films,  Inc. Shah's complaint  alleged
that the  defendants  had made false  promises to the plaintiff  and,  through a
series of corporate mergers and acquisitions,  negligently injured the plaintiff
to the extent of $152,000. The suit seeks unspecified  compensatory and punitive
damages as well as emotional distress damages. Shah has filed a motion seeking a
default judgment against the Company, but this motion has yet to be granted. The
Company  believes  that the suit is without  merit and intends to respond in the
appropriate manner.

         On July 11, 1995,  the Company  filed a complaint in the State of Utah,
Third Judicial District Court against Louis Metzer, an individual  resident of a
foreign country, civil case number 950904843.  On November 1, 1994, Louis Metzer
entered into a stock purchase agreement with the Company,  wherein Metzer agreed
to  purchase  250,000  shares of the  Company's  Common  Stock in  exchange  for
$187,500.  On the same  date,  Metzer  entered  into a written  promissory  note
promising to pay the Company $187,500 plus 6% per annum on or before February 1,
1995.  Metzer has  defaulted on the  promissory  note and the Company is seeking
recovery  on said note.  Efforts to serve  Metzer  have been  unsuccessful.  The
Company is currently working to locate Metzer to complete service.

         On July 11, 1995,  the Company  filed a complaint  against  Christopher
Wells, an individual  resident of a foreign country, in the State of Utah, Third
Judicial  District  Court civil case  number  950904842.  On October  10,  1994,
Christopher  Wells  ("Wells")  entered into a stock purchase  agreement with the
Company,  in which Wells agreed to purchase  1,500,000  shares of the  Company's
Common Stock. The transaction was secured by a promissory note with a face value
of $562,500  entered into  between  both parties on October 10, 1994.  Wells has
defaulted on the promissory  note and the Company seeks to recover on said note.
Efforts to serve Wells have been unsuccessful.  The Company is currently working
to locate Wells to complete service.

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

     The Company did not submit any matters to a vote of security holders during
the fourth quarter of fiscal year 1996 and had not submitted any such matters as
of October 14, 1996.
<PAGE>
                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

         The common stock of the Company traded  over-the-counter  on the NASDAQ
Small Cap Market  under the symbol  "ATCI"  until  December 22, 1994 when it was
delisted for failure to maintain  minimum  listing  requirements.  The Company's
Common Stock has not publicly  traded  since that time.  Accordingly,  the table
below only quotes prices through the end of 1994.  The Company  intends to apply
to have its securities  traded on the OTC Bulletin Board,  and is in the process
of obtaining a quotation pursuant to Rule 15c2-11 under the Securities  Exchange
Act of 1934.  The table set forth below lists the range of high and low bids for
the  Company's  Common Stock as reported by NASDAQ for each  quarter  during the
Company's 1994 fiscal year. The prices in the table reflect inter-dealer prices,
without  retail  markup,  markdown or commission  and may not  represent  actual
transactions.  These prices HAVE been  adjusted for the 1-for-40  reverse  split
effected August 24, 1994.

 Calendar Year           Calendar Quarter             High             Low
   1994                    Third                     $6.00           $2.40
   1994                    Fourth (Partial Period)   $3.60           $2.40

         On August 16, 1994,  the Company's  shareholders  approved  one-for-ten
(1:10) and  one-for-four  (1:4)  reverse  splits of the  Company's  common stock
(effectively  amounting to a  one-for-forty  (1:40) reverse  split),  which took
effect on August 24, 1994. For more information, see the Company's Form 10-QSB/A
for the quarter ending September 30, 1994.

Holders

         As of October 14, 1996,  there were 423  stockholders of record holding
4,996,811 shares of the Company's Common Stock.

Dividends

         The  Company has not  declared  any cash  dividends  for the last three
fiscal years and does not  anticipate  paying any  dividends in the  foreseeable
future.  The  payment  of  dividends  is within the  discretion  of the Board of
Directors  and will  depend on the  Company's  earnings,  capital  requirements,
financial condition, and other relevant factors.

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

General

         The  following  discussion  should be read  together with the Company's
consolidated  financial  statements  and  notes  thereto  included  in this Form
10-KSB.

         From 1984 to 1993, the Company's business was in telecommunications and
producing and  distributing  feature length motion  pictures.  In June 1992, the
Company  began to divest  its  interest  in certain  unprofitable  subsidiaries.
Similar  divestitures  followed in fiscal  1993 and 1994.  In fiscal  1994,  the
Company  focused  its  efforts on  discontinuing  or winding  down  unsuccessful
operations,  resolving  existing and  potential  liabilities  and  searching for
attractive merger or acquisition partners and profitable business opportunities.
These  efforts,   which  continued  in  fiscal  1995  and  1996,  have  affected
inter-period  comparability  of the  Company's  operating  results and financial
condition.
<PAGE>
         On  December  29,  1994,  the  Company  and  ComCentral  Corp.,  a Utah
corporation  n/k/a Tianrong  Building Material  Holdings,  Ltd.  ("ComCentral"),
agreed to a  Compromise,  Release and  Indemnification  Agreement.  This settled
ComCentral's  claim  that  the  Company  breached  representations  it,  or  its
predecessor  in  interest,  allegedly  made  in a  1992  agreement  between  the
companies  whereby the Company  sold to  ComCentral  all of the common  stock of
American  Telecommunications  Corp.  ("American").  ComCentral  claimed that the
Company had misrepresented the value of American's assets and existing contracts
and asserted  damages of  $2,533,600.  The parties  agreed to fully settle these
claims with the Company's immediate transfer to ComCentral of textiles valued at
$626,500 and media credits valued at $775,000, and a future transfer of $250,000
worth of media credits.  ComCentral agreed to assume the payment obligation of a
$400,000  promissory note secured by the media credits.  ComCentral also assumed
the position of payee with respect to a  promissory  note on the textiles  which
was initially payable to Carousel,  Inc. by Thistle  Properties,  Inc., a former
wholly owned  subsidiary of the Company.  The Company's  current  management was
unaware of the existence of this  potential  liability  until it was notified by
ComCentral  in  January  1995.  For  more  information  on the  settlement  with
ComCentral,  see the  Company's  Form  10-KSB for the fiscal year ended June 30,
1995.

         In May 1994, CyberAmerica Corporation,  a Nevada corporation then known
as  The  Canton   Industrial   Corporation   ("CyberAmerica"),   served  Thistle
Properties, Inc., then a wholly-owned subsidiary of the Company ("Thistle"), and
the  Company  with a Notice of Default  on the Real  Estate  Lien Note  executed
between the parties.  Thistle  proposed to forfeit all payments  previously made
under the Real  Estate  Sales  Agreement  entered  by and  between  Thistle  and
CyberAmerica and to allow CyberAmerica to foreclose on the security (100% of the
capital  stock of  Thistle)  in  exchange  for a mutual  release of all  claims.
Effective  May 12, 1995 the Company and Thistle  executed a Mutual  Release with
CyberAmerica  by which the  Company  transferred  100% of the  capital  stock of
Thistle to CyberAmerica and by which CyberAmerica  released the Company from all
obligations with respect to the Canton Manufacturing plant. For more information
on this  transaction  see "Item 1 -  Description  of Business" and the Company's
Form 10-KSB for fiscal year ended June 30, 1995.

         Effective  September 1, 1994, the Company transferred all of its rights
and  interests  in the  stock of  Filmways  Entertainment  Corporation,  to Xeta
Corporation  pursuant to an order of the United  States  District  Court for the
District of Oklahoma.  For more information on this transfer,  see "Item 3 Legal
Proceedings."

         By the end of the 1994 fiscal year,  the Company had disposed of nearly
all of its  assets in an  attempt  to  extinguish  liabilities  and  restructure
operations.  The  Company's  emphasis  then  shifted  toward  finding a suitable
acquisition or merger candidate.

         Effective June 30, 1995, the Company entered into a Purchase  Agreement
with Turner,  Turner & Associates,  a Washington  corporation ("TTA"), and TTA's
shareholders.  According to the  Purchase  Agreement,  the Company  acquired the
rights to United States Patents  numbered  5,296,216 and 5,306,509.  The patents
were   developed   by  TTA  and   relate  to   STOMASTATTM,   a   peroxide   and
bicarbonate-based  solution  that  cleanses,  irrigates,  and  protects the oral
cavity from stomatitis, a process which results in mouth ulcers or canker sores.
The Company  intended to make the production and distribution of STOMASTATTM the
focal point of its operations.

         On  January  19,  1996  and in order to help  facilitate  the  Purchase
Agreement,  Richard H.  Turner,  the  president  of TTA,  was  appointed  as the
Company's president and director. The Purchase Agreement, however, was rescinded
in February 1996 because many of its conditions had not been met and because all
parties involved  determined that an alternative  structure would be preferable.
The Company  continued to negotiate with TTA for several months in an attempt to
reach a  second  agreement,  but no such  agreement  was  reached.  The  parties
ultimately discontinued all negotiations in May 1996. On May 6, 1996, Richard H.
Turner resigned as president and a director of the Company.  On August 20, 1996,
the Company  appointed Dr.  Gerald  Curtis as its  president and director.  Jack
Hartgrove and James  Thompson  resigned as officers and directors of the Company
immediately  after the  appointment  of Dr.  Curtis,  leaving Dr.  Curtis as the
Company's sole officer and director.

         Under new  management,  the  Company  is  continuing  its  search for a
suitable  merger or  acquisition  partner.  As of the date of this  filing,  the
Company has identified potential merger and acquisition candidates,  however all
negotiations  are in the  preliminary  stages and no definitive  agreements have
been reached.
<PAGE>

Plan of Operation

         The Company has not had any revenue from operations during the past two
fiscal  years.  The following  discussion  of the  Company's  plan of operations
should be read in conjunction with the audited financial  statements included in
this Form 10-KSB.

         As a result of the transfers of Carnegie,  Filmways,  and Thistle,  and
the rescission of the Purchase Agreement with TTA, the Company no longer has any
operating or other  significant  assets.  The Company does not currently produce
any goods or provide any  services,  and has no employees  aside from it current
president.  The Company's  business  plan  involves  merging with or acquiring a
suitable  business  entity  that  can  provide  the  Company  with a  basis  for
successful  operations.  While the  Company is  currently  in  negotiation  with
potential merger or acquisition candidates, all discussions are currently in the
preliminary stages, and no definitive  agreements have been reached. The Company
can provide no assurances that the Company will be able to locate an entity with
which to combine or that,  if such a  combination  is achieved,  that it will be
profitable, worthwhile or sustainable.

         Since the Company no longer has any significant  assets,  any merger or
acquisition that the Company ultimately effects will involve the issuance of the
Company's  Common Stock.  Such an exchange of the  Company's  Common Stock would
substantially  dilute the existing  ownership  position of the Company's current
shareholders.  A merger or acquisition  will also likely result in the Company's
recruitment of additional employees.

         The Company is in the process of  obtaining a quotation  for its Common
Stock pursuant to the  provisions of Rule 15c2-11 under the Securities  Exchange
Act of 1934. The Company hopes that  obtaining a quotation  will  facilitate the
Company's  efforts to  acquire  merger or  acquisition  candidates  through  the
issuance of Common Stock. However, the Company can provide no assurances that it
will be able to  obtain a  quotation  of its  Common  Stock  or  that,  if it is
successful in obtaining a quotation, that the Company will successfully effect a
merger or acquisition.

         In order to help it find a suitable merger or acquisition  partner, the
Company has retained the services of Canton Financial  Services  Corporation,  a
Nevada  corporation which provides  professional  business  consulting  services
("CFS").  CFS assists the company in preparing  the  documentation  necessary to
raise capital, finding suitable business opportunities, and handling shareholder
and public  relations work. CFS was originally  retained  pursuant to a June 30,
1994  Consulting  Agreement  which  originally had a one year term, but has been
renewed on a month-to-month  basis since that time. According to that Agreement,
CFS  receives  a $30,000  monthly  fee which the  Company  can pay in cash or by
issuing restricted common stock to CFS.

ITEM 7.  FINANCIAL STATEMENTS

         Please see Pages F-1 through F-13.
<PAGE>
                       ATC II, INC. AND SUBSIDIARIES

         INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES


                                                             PAGE
Consolidated Financial Statements (Submitted in response
     to Part II, Item 7):

     Independent Auditor's Report (Year Ended June 30, 1996) F-2

     Consolidated Balance Sheets - June 30, 1996             F-3

     Consolidated Statements of Loss - for the Years
      Ended June 30, 1996, and 1995                          F-4

     Consolidated  Statements of Stockholders' Equity/
      Deficit - for the Period from July 1, 1994
      through June 30, 1996                                  F-5

     Consolidated Statements of Cash Flows - for the Years
      Ended June 30, 1996, and 1995                          F-6

     Notes to Consolidated Financial Statements              F-7
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Stockholders and Board of Directors
ATC II, Inc.
Salt Lake City, Utah

We have audited the accompanying  consolidated balance sheet of ATC II, Inc. and
subsidiaries  as of June 30, 1996,  and the related  consolidated  statements of
loss, stockholders' equity, and cash flows for the years ended June 30, 1996 and
1995. 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 audits to obtain
reasonable  assurance about whether the  consolidated  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 provides 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 ATC II, Inc. and
subsidiaries as of June 30, 1996, and the results of their  operations and their
cash  flows  for the  years  ended  June 30,  1996 and 1995 in  conformity  with
generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going  concern.  As described more fully in Note 5 to
the consolidated financial statements, the Company has suffered recurring losses
from  operations and has an accumulated  deficit that raises  substantial  doubt
about its ability to continue as a going concern.  Management's  plans in regard
to these matters are also  described in Note 5. The financial  statements do not
include any adjustments that might result from the outcome of this uncertainty.

In addition,  as described  more fully in Note 4 to the  consolidated  financial
statements, the Company has several significant outstanding  contingencies.  The
ultimate outcome of these matters can not presently be determined.  Accordingly,
no provision for any  liability  that may result upon the final outcome has been
made in the accompanying consolidated financial statements.


Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
October 14, 1996
<PAGE>
<TABLE>
<CAPTION>

                          ATC II, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                                  June 30, 1996


     ASSETS

<S>                                                                <C>    
  Film distribution rights (Net of Amortization of $63,050)$ ..         252,200

Total Assets ..................................................    $    252,200


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
  Accounts payable ............................................    $    213,904
  Accrued expenses (Note 1) ...................................         379,354
  Notes payable-current (Note 2) ..............................         157,500

Total Current Liabilities .....................................         750,758


Total Liabilities .............................................         750,758

STOCKHOLDERS' DEFICIT

 Common Stock, $.01 par value;
     20,000,000 shares authorized;
     4,978,580 shares issued and outstanding ..................          49,786
  Paid-in capital .............................................      24,160,854
  Accumulated deficit .........................................     (24,709,198)

Total Stockholders' Deficit ...................................        (498,558)

Total Liabilities and Stockholders' Deficit ...................    $    252,200
</TABLE>

                                      F-3
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
                          ATC II, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENT OF LOSS
                       YEARS ENDED JUNE 30, 1996 AND 1995

                                                    1996        1995

<S>                                            <C>          <C>      
Sales ...................................      $   --       $      --
Cost of sales ...........................          --              --

Gross profit ............................          --              --

Operating expenses:
  General and administrative ............         2,981      1,126,214
  Amortization ..........................        63,050           --
  Salaries and consulting fees ..........        23,077      1,185,898

Total operating expenses ................        89,108      2,312,112

Loss from operations ....................       (89,108)    (2,312,112)

Other income (expense):
  Interest expense ......................       (21,030)      (207,384)
  Asset valuation adjustment ............          --         (486,850)
  Loss in value of investments ..........          --         (214,779)

Total other income (expense) ............       (21,030)      (909,013)

Income (loss) from continuing operations       (110,138)    (3,221,125)

Loss from discontinued operations
(Note 3) ................................          --         (582,769)

Net loss before preferred dividends .....      (110,138)    (3,803,894)

Preferred dividends (Note 6) ............        15,750         31,500

Net loss before extraordinary items .....      (125,888)    (3,835,394)

Extraordinary items:

Gain on forgiveness of debt
(net of tax of $0) (Note 6) .............        47,250           --

Net loss ................................   $    (78,638) $(3,835,394)


Loss per share (Note 1):
  Loss from continuing operations .......   $      (0.04) $     (1.26)
  Loss from discontinued operations .....   $       0.00  $     (0.23)
  Extraordinary item ....................   $       0.02  $        --

Loss per share ..........................   $      (0.02) $      (1.49)

Weighted average shares outstanding .....   $  2,875,299  $ 2,550,446
</TABLE>
   The accompanying notes are an integral part of these financial statements.
                                       F-4
<PAGE>
<TABLE>
<CAPTION>
                                                    ATC II INC. AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                                                      YEAR ENDED JUNE 30, 1996



                                 Series A       Series A      Series B       Series B        Common         Common
                                 Preferred      Preferred     Preferred      Preferred        Stock          Stock
                                  Shares         Amount         Shares        Amount         Shares         Amount
                               -------------  -------------  ------------  -------------  -------------  -------------

<S>                             <C>           <C>            <C>           <C>            <C>            <C>     
Balance at June 30, 1994 ....   3,076,923     $    30,769    $     --            --        503,689       $  5,037

Shares issued for services ..           --           --            --            --       9,481,331        94,813

Shares issued for cash ......           --           --            --            --         476,711         4,767

Shares issued for assets ....           --           --            --            --       1,043,750        10,438

Conversion of preferred stock     (3,076,923)     (30,769)      900,000       900,000          --            --

Move redeemable stock
  above equity section ......           --           --            --            --            --            --

Transferred Thistle to Canton
  (Note 7) ..................           --           --            --            --            --            --

Net loss for the year
  ended June 30, 1995 .......           --           --            --            --            --            --
                                ------------   ----------    ----------    ----------    ----------    ----------

Balance at June 30, 1995 ....   $       --           --        900,000     $  900,000    11,505,481 $     115,055

Redemption of preferred stock
  (Note 6) ..................           --           --        (900,000)     (900,000)         --            --

Factional shares ............           --           --            --            --             (73)           (1)

Cancellation of shares
  (Note 8) ..................                        --            --            --      - (8,468,156     (84,682)

Stock issuance for consulting
  services ..................           --           --            --            --       1,941,328        19,414

Net loss for the year
  ended June 30, 1996 .......           --           --            --            --            --            --
                                ------------   ----------    ----------    ----------    ----------    ----------

Balance at June 30, 1996 ....   $       --           --      $     --            --      4,978,580 $       49,786
                                ============   ==========    ==========    ==========    ==========    ==========

                             The accompanying notes are an integral part of these financial statements.
</TABLE>


                                                               F-5(a)
<PAGE>
<TABLE>
<CAPTION>
                                                    ATC II INC. AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                                                      YEAR ENDED JUNE 30, 1996

                                                                                   Total
                                    Paid-in        Accumulated     Valuation    Stockholder
                                    Capital         Deficit        Allowance      Deficit
                                 --------------  --------------  ------------- --------------

<S>                             <C>             <C>              <C>           <C> 
Balance at June 30, 1994 ....   $ 21,552,719    $  (20,795,166)  $   (441,684) $     351,675

Shares issued for services ..        975,366              --             --        1,070,179

Shares issued for cash ......        633,694              --             --          638,461

Shares issued for assets ....        903,624              --             --          914,062

Conversion of preferred stock       (869,231)             --             --              --

Move redeemable stock
  above equity section ......           --                --             --          (900,000)

Transferred Thistle to Canton
  (Note 7) ..................           --                --          441,684         441,684

Net loss for the year
  ended June 30, 1995 .......           -          (3,835,394)           -         (3,835,394)
                               --------------   -------------   ------------    ------------

Balance at June 30, 1995 ....   $ 23,196,172  $   (24,630,560)  $        -         (1,319,333)

Redemption of preferred stock
  (Note 6) ..................        880,000             --             --           880,000

Factional shares ............           --               --             --                (1)

Cancellation of shares
  (Note 8) ..................         84,682             --             --              --

Stock issuance for consulting
  services ..................           --               --             --            19,414

Net loss for the year
  ended June 30, 1996 .......           --            (78,638)          --           (78,638)
                                 --------------   -------------   ------------    ------------

Balance at June 30, 1996 ....   $   24,160,854 $     (24,709,198) $      --          (498,558)
                                  ==============   =============   ============    ============

                             The accompanying notes are an integral part of these financial statements.
</TABLE>

                                                               F-5(b)

<TABLE>
<CAPTION>
                          ATC II, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                   FOR THE YEARS ENDED JUNE 30. 1996 AND 1995

                                                           1996        1995
<S>                                                    <C>         <C>  
    Cash flow from operations:
        Loss from continuing operations                $  (78,638) $(3,221,125)
        Adjustment to reconcile loss to net cash
          provided by (uses for) continuing operations:
         Bad debt                                            -        750,000
         Depreciation and amortization                     63,050        -
         Loss on valuation adj. inventory, receivables       -        701,629
         Gain on forgiveness of debt                      (47,250)       -
         Shares issued for services                        19,414    1,070,179
       Change in assets and liabilities net of acquisitions:
         Accounts, notes, and other receivables              -         40,850
         Prepaid expenses                                    -         61,086
         Accounts payable                                  22,394     (68,483)
         Accrued expenses                                  21,030    (253,643)
    Cash used for continuing operations                      -       (919,507)

    Gain (loss) from discontinued operations:                -       (582,769)
       Adjustments to reconcile gain (loss) to net cash
        provided by (used for) discontinued operations:
         Disposal of Thistle and Filmways                    -        830,719
         Depreciation                                        -         30,847

    Cash provided by (used for) discontinued operations      -        278,797
    Cash provided by (used for) operating activities         -       (640,710)

    Cash flow from investing activities:

    Cash flow from financing activities:
    Proceeds from stock issuances                            -        638,461

    Cash provided by (used for) financing activities         -        638,461

    Net increase (decrease)in cash                           -         (2,249)

    Cash, beginning of year                                  -          2,249

    Cash, end of year                                  $     -     $     -

    Supplemental cashflow information:
       Cash paid for interest                          $     -     $  207,384

    Noncash investing and financing transactions:
       Purchase of assets with common stock                  -        914,062
</TABLE>

   The accompanying notes are an integral part of these financial statements.
                                       F-6
<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Organization  - ATC II, Inc.  (ATC II) was  incorporated  under the laws of
British Columbia, Canada in 1979 under the name ATC, Inc. ATC II was redomiciled
as a Delaware  corporation on November 20, 1990. Its primary business  operating
segments have been in telecommunications, entertainment, and real estate. ATC II
is actively pursuing opportunities in the aforementioned spheres, as well as any
other business opportunity.

     Filmways  Entertainment  Corporation  was  incorporated  in  the  State  of
Delaware on November 5, 1993. Its primary business was the distribution of films
in the  United  States  and  internationally.  Filmways  was  awarded to another
company in settlement of a lawsuit on September 1, 1994.

     Thistle Properties,  Inc. (Formerly known as TAC of Illinois) was organized
in  the  State  of  Illinois.   ATC  II  purchased   Thistle  from  CyberAmerica
Corporation,  a Nevada  corporation,  formerly  known as the  Canton  Industrial
Corporation  (CyberAmerica)  to hold commercial rental real estate (see Note 7).
Thistle was returned to  CyberAmerica  after Thistle  defaulted on a loan on May
12, 1995.

     Principles of Consolidation - The consolidated financial statements for the
year ended June 30, 1996  include the  accounts of ATC II, Inc.  (formerly  ATC,
Inc.) only.

     The  consolidated  financial  statements  as of June 30,  1995  include the
accounts  of ATC  II,  Inc.  and  its  subsidiaries,  Thistle  Properties,  Inc.
(Thistle)  until May 12, 1995,  when Thistle was returned to  CyberAmerica;  and
Filmways  Entertainment  Corporation  until September 1, 1994, when Filmways was
awarded to another company in settlement of a lawsuit.

     Collectively, these entities are referred to as the Company. See Note 3 for
discussion of the disposition of  subsidiaries  during the year. All significant
intercompany transactions and accounts have been eliminated.

     Accounting Method - The Company's  financial  statements are prepared using
the accrual method of accounting.

     Property  and  Equipment -  Depreciation  is computed on the  straight-line
method over the  estimated  useful lives.  Major  renewals and  betterments  are
capitalized  while  expenditures  for  maintenance  and  repairs  are charged to
operations as incurred.

     Property and equipment are recorded at cost.  Depreciation  expense for the
year ended June 30, 1995 was included in the "discontinued operations" (see Note
3) and amounted to $30,847.

     Net (Loss) Income per Common Share - The  computation  of net (loss) income
per  common  share is based on the  weighted  average  number of  common  shares
outstanding  during  the  period.  Employee  stock  options  and stock  purchase
warrants are not included because their effect is immaterial.  In August of 1994
the Company authorized a 1-for-40 reverse split of its outstanding common stock.
All share and per share information in these financial statements and notes have
been retroactively

                                    F-7
<PAGE>

NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     restated to reflect this reverse split.

     Income Taxes - The Company and its subsidiaries  file separate tax returns.
The  Company  adopted  Statement  of  Financial  Accounting  Standards  No,  109
"Accounting  for Income  Taxes" in the fiscal  year ended June 30,  1994 and has
applied the  provisions of the  statement on a  retroactive  basis to the fiscal
year ended June 30, 1993 which resulted in no significant adjustments.

     Statement of Financial  Accounting Standards No. 109 "Accounting for Income
Taxes"  requires an asset and liability  approach for financial  accounting  and
reporting for income tax purposes.  This statement  recognizes (a) the amount of
taxes  payable  or  refundable  for  the  current  year  and  (b)  deferred  tax
liabilities  and assets for future  tax  consequences  of events  that have been
recognized in the financial statements or tax returns.

     Deferred income taxes result from temporary  differences in the recognition
of accounting transactions for tax and financial reporting purposes.  There were
no temporary differences at June 30, 1996 and 1995, accordingly, no deferred tax
liabilities or assets have been recognized for temporary  differences as of June
30, 1996 and 1995.

     The  Company  had  cumulative  net  operating  loss  carryforwards  of over
$5,000,000 at June 30, 1996, and 1995. No effect has been shown in the financial
statements for the net operating loss  carryforwards as the likelihood of future
tax  benefit  from  such  net  operating  loss  carryforwards  is not  presently
determinable.  Accordingly, the potential tax benefits of the net operating loss
carryforwards have been offset by valuation reserves of the same amount.

     Cash and  Cash  Equivalents  - The  Company  considers  all  highly  liquid
investments  with a maturity of three  months or less when  purchased to be cash
equivalents.

     Accrued  Expenses - Accrued  expenses  include $85,715 in accrued  interest
expense,  $149,858  to settle a judgement  against  the Company  from a previous
lawsuit, $113,781 in accrued attorneys fees, and $30,000 for consulting fees.

     Film  Distribution  Rights - On September 20, 1993 the Company entered into
an agreement to acquire all ownership rights,  title and interest in (subject to
existing distribution agreements) five motion picture films for 25,000 shares of
common  stock  valued  at $0.02  per  share  (average  price  during  period  of
negotiation  and sale).  The film  distribution  rights are amortized  over five
years  using the  straight  line  method.  At June 30, 1995 the film rights were
written-down by $486,850 to reflect the current market price as established by a
film distribution company.

     Intangible  assets - Film  Distribution  Rights  are  amortized  using  the
straight  line method over the 60 month period they are expected to benefit.  At
June 30,  1995 the film  rights  were  written-down  by  $486,850 to reflect the
current  market  price  as  established  by a  film  distribution  company.  The
amortization of the rights for the period ended June 30, 1996 was $63,050.

     Method of determining uncollectability of receivables - Aged receivables in
excess  of 90  days  are  reviewed  on an  individual  basis  to  determine  the
collectibility of such account.

                                    F-8
<PAGE>

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     An allowance is created for the estimated  uncollectible accounts. When all
efforts to collect an account  have  failed,  the  receivable  is cleared to the
allowance account.  If the write off exceeds the allowance account it is cleared
to bad debt expense. At June 30, 1995 all of the receivables were written off as
uncollectible.

NOTE 2 - NOTES PAYABLE

     At June 30, 1996 notes payable consist of the following:

     Various notes payable on demand or are currently due totalling  $130,000 at
an interest rate of 15% per annum.

     Note payable due on demand for $27,500 at 8% per annum.

     Accrued interest on the above notes at June 30, 1996 was $85,715.

NOTE 3 - DISCONTINUED OPERATIONS

     Reserve-A-Phone Systems, Inc. (RAP) RAP had no income during the year ended
June 30, 1994. Expenses  associated with the winding up of operation,  and legal
expenses  incurred in regard to RAP were written-off to discontinued  operations
in the amount of $44,618.  During the year ended June 30, 1995, the Company also
settled a dispute  relating to a prior contract by issuing assets resulting in a
loss of $601,500.

     Thistle Properties, Inc. (Thistle) On May 4, 1995 Thistle received a Notice
of Default from CyberAmerica,  on the Real Estate Lien Note attached to property
(See Note 7). The Company  subsequently allowed CyberAmerica to foreclose on the
security  (100% of Thistle's  capital stock) in exchange for a mutual release of
all claims.  The loss of $42,166 recorded on the books of Thistle is recorded as
a loss from discontinued operations.

     Filmways  Entertainment  Corporation (Filmways) Effective September 1, 1994
the Company transferred all of its rights and interests in the stock of Filmways
to Xeta  Corporation  pursuant to the order of the United States  District Court
for the Northern District of Oklahoma. The accounts of Filmways were written-off
to discontinued operations resulting in a gain of $45,883.

NOTE 4 - LITIGATION

     The  Company is a litigant  in several  law suits  resulting  from the poor
financial  condition  of the  Company  and its prior  subsidiaries.  The Company
received a summary judgement  against it in the amount of $149,859.  This amount
has not yet been paid.  However,  the Company has recorded  this expense  during
1994,  and the  liability is recorded as an accrued  expense for the years ended
June 30, 1996 and 1995.

     The potential exposure from other litigation at June 30, 1996 is $1,139,879
plus punitive  damages and interest.  The actual amount of possible loss can not
be estimated at this time.  Management  believes  that the outcome of any of the
actions against the Company

                                    F-9
<PAGE>

NOTE 4 - LITIGATION (Continued)

     may have a  material  impact  on its  financial  position  and  results  of
operations.  The  financial  statements  have not been  adjusted  to reflect the
outcome of these contingencies.

     On July 21, 1994  following  several  asset  hearings and other  collection
efforts,  the United States District Court of the Northern  District of Oklahoma
issued an Order for Judgment  Debtor to Appear and Turn over Assets and Property
to the Plaintiff  (the Order).  The Order  required the Company to turn over and
relinquish  possession  to the Plaintiff all the assets of Carnegie and Filmways
and all documents relating to accounts receivables of Carnegie and Filmways.

     The Company did not turn over the five films known as the Weintraub Library
as part of its  required  compliance  with the Order  because  the  library  was
outside the scope of the Order.  The library had previously been  transferred to
another wholly owned subsidiary,  Thistle Properties,  Inc. Thistle subsequently
transferred  the  Weintraub  Library to ATC II prior to  receiving  the  default
notice from CyberAmerica (See Note 3).

     On August 15, 1994 the Company entered into a Settlement Agreement with the
holder of the 3,076,923 shares of Series A Convertible Preferred Stock in which,
among other things,  the Series A Convertible  Preferred Stock was exchanged for
900,000 shares of Series B Convertible  Preferred  Stock. The Series B Preferred
Stock is convertible,  share for share into Common Stock at the holders' option.
The Preferred  Stock pays a 7%  cumulative  dividend and will be redeemed for $1
per share if not  converted  after  five  years  from the date of  issuance.  On
October 6, 1995,  the Company  redeemed  900,000  shares of preferred  stock for
$20,000 (Note 6).

     During July 1995,  the  Company  filed  complaints  in the State of Utah to
recover damages from unexecuted common stock subscriptions.  The Company alleges
that the stock  agreements  of 250,000  and  1,500,000  valued at  $187,500  and
$562,500.  Both cases are in exploratory  stages. The financial  statements have
not been adjusted to reflect the possible collections of these lawsuits.

NOTE 5 - GOING CONCERN

     The  accompanying  consolidated  financial  statements  have been  prepared
assuming  the  Company  will  continue  as a  going  concern.  As  shown  in the
accompanying   consolidated   financial  statements  the  Company  has  incurred
substantial  operating  losses  in recent  years and as of June 30,  1996 has no
current assets to pay the current  liabilities.  These factors raise substantial
doubt about the Company's ability to continue as a going concern.

     The  Company's  continued  existence  is dependent on its ability to obtain
additional debt or equity financing or finding suitable  business  opportunities
to provide  profitable  operations.  Management's  plans are to seek  merger and
acquisition candidates that will provide profitable operations.

     The consolidated  financial  statements do not include any adjustments that
might be necessary if the Company is not able to continue as a going concern.

                                   F-10
<PAGE>

NOTE 6 - STOCKHOLDERS' EQUITY

     Preferred stock. On October 2, 1990  shareholder  approval was obtained for
the creation of 5,000,000  shares of Class "A" Preferred shares with a par value
of $0.01, 4% cumulative  convertible preferred stock. At June 30, 1994 3,076,923
share were issued and outstanding which are convertible into 3,076,923 shares of
ATC II common stock with an initial liquidation preference of $1.30.
The preferred stock was issued for the purchase
     of a note from an outside comapny. (see Note 3).

     On August 15, 1994 the Company entered into a Settlement Agreement with the
holder of the 3,076,923 shares of Series A Convertible Preferred Stock in which,
among other things,  the Series A Convertible  Preferred Stock was exchanged for
900,000 shares of Series B Redeemable  Convertible Preferred Stock. The Series B
Preferred  Stock is  convertible,  share  for  share  into  Common  Stock at the
holders' option. The Preferred
     Stock pays a 7%  cumulative  dividend  (3.5% in the first year) and will be
redeemed  for $1 per share if not  converted  after  five years from the date of
issuance. If the Company fails to pay dividends for six consecutive quarters, it
must redeem outstanding shares upon demand of the holders at $1.00 per share. At
June 30, 1995 the Company was in arrears for four quarters, or $31,500.

     On October 6, 1995, the Company  redeemed  900,000 shares of the redeemable
preferred  stock for  $20,000.  CyberAmerica  paid the  $20,000 in behalf of the
Company to redeem the stock.  The accounts  payable  includes  the $20,000.  The
remaining par value of $880,000 was reflected in paid-in capital.

     The  Agreement  released the Company from any  obligation  to pay preferred
dividends of $15,750 for 1996 and $31,500 for 1995.  The  extraordinary  item of
$47,250 ($.02 per share)  represents  the Company's  gain on the  forgiveness of
preferred  dividends  in 1995 for $31,500 and $15,750 in 1996.  The Company does
not have any income tax adjustment due to tax carryforwards. (See Note 1)

     Private  placement.  During the year ended June 30, 1995 the Company issued
476,711 shares of common stock for cash in the amount of $638,461.

     During the year ended June 30, 1995 the Company issued  1,043,750 shares of
common stock for assets (primarily stock in other companies) valued at $914,062.
It was later  determined that the stock received was worthless and was therefore
written off.

     At June 30, 1995 the Company had issued 2,668,152 shares of common stock to
an escrow agent to hold pending an agreement  regarding a business  opportunity.
The negotiations were subsequently withdrawn and the shares returned during July
of 1996.

     During the year ended June 30, 1995 the Company issued  9,481,331 shares of
common  stock to various  consultants  and  officers of the Company for services
rendered valued at $1,070,179.

     On May 5, 1996,  the Company  issued  1,941,328  shares of common stock for
consulting services performed by Canton Financial Services, Inc. (CFS), a wholly
owned subsidiary of CyberAmerica. (See Note 7)


                                   F-11
<PAGE>

NOTE 6 - STOCKHOLDERS' EQUITY (Continued)

     Options.

     In March,  1990, the Company  authorized an Employee Incentive Stock Option
Plan  permitting  the  issuance of options to purchase up to 5,833 shares of the
Company's  common  stock.  In  addition,  the Board of  Directors  approved  the
issuance  to non-  employee  directors  of up to 1,333  shares of the  Company's
common  stock.  The options are to be issued at market  value at the time of the
grant. At June 30, 1996 options to purchases 46,417 shares of common stock at an
exercise price between $30.00 and $72.00 were outstanding.

     Warrants.

     The Company, from time to time, grants warrants at exercise prices equal to
or above market price in  consideration  of loans to the Company,  settlement of
lawsuits, forgiveness of debt, or purchases of assets. At June 30, 1996 warrants
to purchase  30,885 shares of common stock at an exercise  price between  $40.00
and $122.80 were outstanding.

NOTE 7 - RELATED PARTY TRANSACTIONS

     Property  purchase.  Effective June 30, 1994 the Company purchased property
located  in  Canton,  Ill.  from  CyberAmerica,  a  Company  owning  19%  of the
outstanding   common  stock.   The  Company  also  purchased  its  wholly  owned
subsidiary, Thistle, from CyberAmerica to hold the property.

     The purchase  price of the property  was  recorded at  predecessor  cost as
follows:

          Short-term note payable        $    428,000
          Long-term debt                      397,000
          Assume EPA Liability                160,000
          Property tax payable                150,783
            Total                           1,135,783
          Net predecessor cost of property   (694,099)
          Valuation allowance             $   441,684

     During the year ended  June 30,  1995,  the  Company  paid  $60,000 in cash
applied to the principal of the short-term note,  $118,000 in interest payments,
and issued $250,000 of media due bills in partial satisfaction of the short-term
note.  Effective May 12, 1995 the Company  allowed  CyberAmerica to foreclose on
the security (100% of Thistle  capital stock) because  Thistle was in default on
the loan to CyberAmerica. The loss on this property was recorded in discontinued
operations.

     Consulting  agreement.  The Company has entered into a consulting agreement
with Canton Financial Services (CFS) (a wholly owned subsidiary of CyberAmerica)
to  provide  general  business  consulting  and  administrative   services.  The
agreement is dated April 29, 1994. The Company will pay CFS $30,000 per month in
cash or in shares of  restricted  stock of the  Company  at the rate of one half
(1/2) the average bid price over a ten day period ending the 14th of the month.


                                   F-12
<PAGE>

NOTE 8  - RECISSION OF AGREEMENT

     During June 1995,  the Company  signed a Purchase  Agreement  with  Turner,
Turner & Associates,  a Washington  corporation (TTA). According to the Purchase
Agreement, the Company acquired all rights and interests in U.S. Patents numbers
5,296,216 and 5,306,509 (the Patents).  In exchange for the Patents, the Company
issued  8,468,156  shares of its common  stock to a designee  of TTA and CFS for
services to be performed.  The Purchase Agreement was subsequently  rescinded in
February  1996 because  conditions  had not been met by the Company and TTA. The
Company continued to negotiate with TTA in an attempt to acquire the Patents. On
May 5, 1996, the Company ceased all negotiations with TTA. On June 13, 1996, the
Company  cancelled  the  8,468,156  shares  previously  issued  to  all  parties
involved.

                                   F-13

<PAGE>

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

         There  have been no  changes  in the  Company's  principal  independent
accountants during the two most recent fiscal years.

                                    PART III



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

Directors and Executive Officers

      Name                                   Age         Title(s)
      Gerald Curtis                          63          President and Director

     Dr. Gerald Curtis was appointed as president and director of the Company on
August 20, 1996.  Dr. Curtis  served a previous term as the Company's  president
from May 1994 to June 1995.  Dr. Curtis has been a licensed  dentist for over 20
years and has been a partner in real estate development and sales companies. Dr.
Curtis was previously a partner in a movie production  company and has also held
executive positions with oil and gas companies.

Compliance with Section 16(a) of the Exchange Act

         Based solely upon a review of the forms furnished to the Company during
the fiscal year, the Company is not aware of any person,  who at any time during
the fiscal year ended June 30, 1996 was a director, officer, or beneficial owner
of more than ten percent of the  Company's  Common Stock and failed to file on a
timely basis reports  required by Section 16(a) of the  Securities  Exchange Act
with respect to that fiscal year, other than the following: Dr. Curtis failed to
file Form 3 within 10 days of his  appointment as the Company's  president and a
director, but has since filed that document with the Commission.

ITEM 10. EXECUTIVE COMPENSATION

Executive Compensation

         No  compensation  in excess of $100,000  was awarded to,  earned by, or
paid to any executive officer of the Company during the 1996 fiscal year.

         The following table provides  summary  information for each of the last
three fiscal years concerning cash and non-cash  compensation paid or accrued by
the  Company  to or on behalf of:  Dr.  Gerald  Curtis,  the  Company's  current
president,  who also  served as the  Company's  president  from May 1994 to June
1995, and James L. Thompson,  the Company's  president from June 1995 to January
1996.

<PAGE>
<TABLE>
<CAPTION>


                                                     SUMMARY COMPENSATION TABLE
                                                 Annual Compensation                Awards        Payouts
                                                                  Restricted       Securities                    Other
                                                 Other Annual        Stock         Underlying      LTIP       Compensation
 Name & Position    Year    Salary    Bonus($)   Compensation    Award(s) ($)    Options/SARs(#)    Payouts
 ---------------    ----    ------    --------   ------------    ------------    ---------------    -------    ------------
<S>                 <C>        <C>       <C>           <C>          <C>                 <C>            <C>         <C>
Gerald Curtis       1996       0         0             0               0                0              0           0
Current President   1995       0         0             0            47,5311             0              0           0
                    1994       0         0             0            9,3752              0              0           0
James Thompson      1996       0         0             0               0                0              0           0
Former President    1995       0         0             0               0                0              0           0

</TABLE>

1.Gerald Curtis received shares of restricted Common Stock for services rendered
during fiscal 1995.  The value above is the product of the closing  market price
of unrestricted  stock on the date of grant and the number of restricted  shares
issued (57,629) net of consideration  paid by Gerald Curtis.  There is, however,
no market for  restricted  shares of the Company's  Common Stock and the numbers
above do not  therefore  reflect the actual value of the shares  received by Dr.
Curtis.  Dividends  declared by the Company on its Common Stock,  if any,  would
also be applicable to those shares.

2.Gerald Curtis received shares of restricted Common Stock for services rendered
during fiscal 1994.  The value above is the product of the closing  market price
of unrestricted  stock on the date of grant and the number of restricted  shares
issued (2,500) net of consideration paid by Gerald Curtis. There is, however, no
market for restricted shares of the Company's Common Stock and the numbers above
do not therefore  reflect the actual value of the shares received by Dr. Curtis.
Dividends  declared by the Company on its Common  Stock,  if any,  would also be
applicable to those shares.

Director Compensation

         Directors  may receive a fixed fee or  reimbursement  of  expenses  for
attendance  at meetings  of the  directors.  Directors  are not  precluded  from
serving in any other capacity as an officer, agent, employee, or otherwise,  and
receiving  compensation therefor. No director received any cash compensation for
services as a director in the fiscal year ended June 30, 1996.

ITEM 11. SECURITY OWNERSHIP OF BENEFICIAL OWNERS
<TABLE>
<CAPTION>

         The  following  table sets forth  certain  information  concerning  the
Company's  stock  ownership  as of October  14,  1996 with  respect to: (i) each
person  who is known to the  Company to be the  beneficial  owner of more than 5
percent of the Company's  common stock;  (ii) all  directors;  (iii) each of the
executive officers;  and (iv) directors and executive officers of the Company as
a group:
                                     Name and Address                   Amount and Nature of
   Title of Class                  of Beneficial Owner                  Beneficial Ownership       Percent of Class

<S>                              <C>                                          <C>                       <C>  
    Common Stock                    Am-Russ CTV, Inc.                         1,000,000                 20.0%
   $0.01 par value              6701 Baum Drive, Suite 345
                                Knoxville, Tennessee 37919

    Common Stock          Canton Financial Services Corporation                945,663                  18.9%
   $0.01 par value            268 West 400 South, Suite 300
                                Salt Lake City, Utah 84101

    Common Stock        Dr. Gerald Curtis, President and Director              72,998                    1.5%
   $0.01 par value                 1401 East 3900 South
                                Salt Lake City, Utah 84124

    Common Stock            Directors and Officers as a Group                  72,998                    1.5%
   $0.01 par value

</TABLE>
<PAGE>
Change of Control

         The  Company  is not aware of any  arrangements  which may  result in a
future change of control in the Company.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Proposed Transactions with Turner, Turner & Associates

         During the past year, the Company had been engaged in negotiations with
Turner,  Turner & Associates,  a Washington  corporation ("TTA"). The purpose of
these negotiations was the transfer from TTA to the Company of certain rights in
U. S. Patents Numbers 5,296,216 and 5,306,509 (the "Patents"). TTA developed the
Patents,  which relate to an oral lavage, a trademark of certain products, and a
protocol known as STOMASTATTM.  In furtherance of the proposed transaction,  the
Company  appointed  Jack E. Hartgrove and James L. Thompson as directors in June
1995.  Hartgrove  and  Thompson  helped  introduce  the Company to TTA, and were
issued  shares of Common  Stock which were held in escrow in exchange  for their
services rendered in arranging an agreement between the parties.

         On June 30, 1995,  the Company  signed a Purchase  Agreement  with TTA.
According  to the  Purchase  Agreement,  the  Company  acquired  all  rights and
interests  in the  Patents in  exchange  for $10  Million to be paid in cash and
Common  Stock.  To  facilitate  the  transfer of the  Patents,  Richard  Turner,
chairman  of  TTA,  was  appointed  as the  Company's  president  and one of its
directors on January 19, 1996. The Purchase Agreement, however, was subsequently
rescinded in February 1996 because many of its  conditions  had not been met and
because both parties determined an alternative  structure would be optimal.  The
Company continued to negotiate with TTA in an attempt to acquire the Patents. On
May 5, 1996,  the Company ceased all  negotiations  with TTA because the parties
had not made any progress toward reaching a second agreement.  All shares issued
pursuant to the Purchase Agreement were returned to the Company and canceled.

         Richard  Turner  is  deemed  to have  had a  material  interest  in the
proposed  transaction  between the Company and TTA because of his  positions  as
president  of  the  Company  and  Chairman  of  TTA  during  the  aforementioned
negotiations.  Jack  Hartgrove  and James  Thompson,  who were also officers and
directors of the Company during the negotiations with TTA, may also be deemed to
have had a material interest in the proposed  transaction because they were both
entitled to receive  shares of the Company's  Common Stock once an agreement was
reached with TTA. For more information on the proposed transaction with TTA, see
"Item 1 - Description of Business."

Transactions with CyberAmerica Corporation

          On August 23, 1994, Thistle Properties,  an Illinois corporation and a
subsidiary  of  the  Company  ("Thistle"),  entered  into a  Real  Estate  Sales
Agreement (the "RES Agreement") with CyberAmerica Corporation (then known as The
Canton Industrial Corporation).  Pursuant to the RES Agreement, Thistle acquired
a manufacturing plant located in Canton,  Illinois from CyberAmerica in exchange
for  $4,000,000  in cash and the  Company's  Common Stock and the  assumption by
Thistle of  liabilities  related to the plant.  Thistle and  CyberAmerica  later
amended the RES  Agreement by lowering the purchase  price to $850,000  based on
the determination of the Company's  independent  auditors that the RES Agreement
was  not  an  "arms-length"   transaction  because  the  Company  was  receiving
consulting services from Canton Financial Services Corporation ("CFS"), a Nevada
Corporation and subsidiary of CyberAmerica.

         On May 4, 1995, Thistle received a Notice of Default from CyberAmerica.
Thistle, with the Company's approval, forfeited all payments to CyberAmerica and
allowed  CyberAmerica  to foreclose on the security  (100% of Thistle's  capital
stock) provided by the amended RES Agreement in exchange for a mutual release of
all claims.  Effective May 12, 1995,  the Company and Thistle  executed a Mutual
Release with  CyberAmerica,  through  which 100% of the capital stock of Thistle
was transferred to CyberAmerica.

          The transactions by and between the Company, Thistle, and CyberAmerica
may be considered to be interested transactions because CFS, who was acting as a
financial  consultant  to the Company,  was a  subsidiary  of  CyberAmerica  and
therefore had an indirect  financial interest in these  transactions.  Moreover,
Richard Surber, a director of the Company when these transactions  occurred, was
also the president  and a director of  CyberAmerica.  The Company  estimates the
amount of this  interest  to be  $441,684,  the  difference  between the amended
purchase price and  CyberAmerica's  book value of the plant net of  depreciation
($694,099), plus the liabilities Thistle assumed in connection with the purchase
($310,783).  For  more  information  about  these  transactions,   see  "Item  1
Description of Business."
<PAGE>
Transactions with Christopher Wells

         On October 1, 1994,  the Company  entered into a  Consulting  Agreement
with Christopher Wells.  Pursuant to this agreement,  the Company retained Wells
to introduce  the Company to business  opportunities  and merger or  acquisition
candidates in Europe.  In consideration  of these services,  the Company granted
Wells an option to purchase 90,000 shares of the Company's Common Stock at $0.75
per share which was exercised on or about  November 11, 1994.  This  transaction
made Wells a beneficial owner of more than 5% of the Company's Common Stock.

         On  October  10,  1994,  the  Company  entered  into a  Stock  Purchase
Agreement  with  Wells to sell  1,500,000  shares of Common  Stock  pursuant  to
Regulation S for  $1,250,000,  or $0.75 a share.  The  agreement  called for the
Company to issue the shares in  increments of 500,000 and for Wells to execute a
recourse promissory note in favor of the Company.  Wells subsequently  defaulted
on the promissory note, and the Company has filed a complaint  against Wells for
payment on the promissory  note. The Company is currently trying to locate Wells
to complete service of process. For more information on this matter, see "Item 3
- Legal  Proceedings"  and the Company's  Form 10-KSB for fiscal year ended June
30, 1995.

Transactions with Louis Metzer

         On October 1, 1994,  the Company  entered into a  Consulting  Agreement
with Louis Metzer, a resident of the Cayman Islands ("Metzer"). Pursuant to this
agreement,  the Company  retained  Metzer to  introduce  the Company to business
opportunities  and merger or acquisition  candidates in Europe. In consideration
of these services the Company granted Metzer an option to purchase 90,000 shares
of the Company's Common Stock at $0.75 per share which was exercised on or about
November 11, 1994. This  transaction made Metzer a beneficial owner of more than
5% of the company's Common Stock.

         On  November  1,  1994,  the  company  entered  into a  Stock  Purchase
Agreement  with  Metzer  to sell  250,000  shares of Common  Stock  pursuant  to
Regulation  S for  $187,500,  or $0.75 a share.  The  agreement  called  for the
Company to issue the shares and for Wells to execute a recourse  promissory note
in favor of the company.  Metzer subsequently  defaulted on the promissory note,
and the  Company  has  filed a  complaint  against  Metzer  for  payment  on the
promissory  note.  The Company is currently  trying to locate Metzer to complete
service of process.  For more  information  on this matter,  see "Item 3 - Legal
Proceedings."

Transactions with Avi Herson

         On October 7, 1994,  the Company  entered into a  Consulting  Agreement
with Avi Herson, a resident of the Cayman Islands  ("Herson").  Pursuant to this
agreement,  the Company  retained  Herson to  introduce  the company to business
opportunities  and  merger or  acquisition  candidates  in  Europe,  to  perform
business and managerial  services for any European business the Company acquires
and to perform  other  services from time to time at the request of the board of
directors.  In  consideration of these services the company issued 90,000 shares
of the  company's  Common Stock  pursuant to  Regulation S to Herson on or about
November 29, 1994. This  transaction made Herson a beneficial owner of more than
5% of the Company's  Common Stock.  Based solely on the closing  market price of
the  Company's  Common  Stock as  reported  by NASDAQ on  November  29, 1994 the
Company believes the value of Herson's interest in this transaction is $180,000.
<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)       Index to  Exhibits.  Exhibits  required  to be attached by Item 601 of
          Regulation  S-B are listed in the Index to Exhibits  beginning on page
          16  of  this  Form  10-KSB,  which  is  incorporated  herein  by  this
          reference.

(b)       Reports on Form 8-K.  The Company did not make any filings on Form 8-K
          during the fourth quarter of the fiscal year ending June 30, 1996.


                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized, this 15TH day of October 1996.

         ATC II, INC.


          /s/ Dr. Gerald Curtis
         Dr. Gerald Curtis, President


     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  registrant and in the capacities and on
the dates indicated.


Signature                      Title                            Date

/s/ Dr. Gerald Curtis          President and Director           October 15, 1996
------------------------
Dr. Gerald Curtis
<PAGE>
                                INDEX TO EXHIBITS


EXHIBIT      PAGE
 NO.         NUMBER              DESCRIPTION

3(i)           *    Articles of Incorporation  of the Company,  filed as Exhibit
                    3.1 to Registrant's Registration Statement on Form S-4 filed
                    June 2, 1990, as amended.


3(ii)          *    By-laws  of  the   Company,   filed  as  Exhibit   3(ii)  to
                    Registrant's  Registration  Statement on Form S-4 filed June
                    2, 1990, as amended.


4(i)           *    Form of Common Stock certificate.



4(ii)          *    Form of Designation, Preferences and Rights of 4% Cumulative
                    Convertible  Preferred  Stock  of the  Registrant,  filed as
                    Exhibit 3.4 to the Registrant's  Form 8-K,  reporting events
                    as of October 7, 1993.

                               MATERIAL CONTRACTS

10(i)(a)       *    Consulting   Agreement   between   the  Company  and  Canton
                    Financial Services, Inc., effective April 29, 1994, filed as
                    exhibit of like number to the  Registrant's  Form 10-KSB for
                    the period ending June 30, 1994.

10(i)(b)       *    Real Estate Sales Agreement between Thistle Properties, Inc.
                    and The Canton Industrial Corporation, dated August 23, 1994
                    and effective June 29, 1994, filed as exhibit of like number
                    to the  Registrant's  Form 10-KSB for the period ending June
                    30, 1994.

10(i)(c)       *    Commercial lease between The Canton  Industrial  Corporation
                    and P & O Manufacturing Corporation,  dated August 15, 1994,
                    and  Assignment  and  Assumption  of  Lease  by  The  Canton
                    Industrial  Corporation to  Registrant,  filed as exhibit of
                    like number to the  Registrant's  Form 10-KSB for the period
                    ending June 30, 1994.

10(i)(d)       *    Exchange  Agreement  between the Company and National  Media
                    Inventory, Inc. effective June 23, 1994, filed as exhibit of
                    like  number  to  the  Registrant's   Form  10-KSB  for  the
                    periodending June 30, 1994.

10(i)(e)       *    Exchange  Agreements  between  the  Company  and  San  Pedro
                    Securities  Ltd.,  Asset Management Trust Ltd., David Newren
                    and Globe  Marketing  Systems all  effective  June 30, 1994,
                    filed as exhibit  of like  number to the  Registrant's  Form
                    10-KSB for the period ending June 30, 1994.

10(i)(f)       *    Textile purchase Agreement between Thistle Properties,  Inc.
                    and Carousel, Inc. effective June 20, 1994, filed as exhibit
                    of like  number  to the  Registrant's  Form  10-KSB  for the
                    period ending June 30, 1994.

10(i)(g)       *    Settlement  Agreement between the Company and Communications
                    and Entertainment Corp.  effective August 15, 1994, filed as
                    exhibit of like number to the  Registrant's  Form 10-KSB for
                    the period ending June 30 1994.

10(i)(h)       *    Stock Purchase  Agreement  between the Company and Lexington
                    Sales Corporation  Limited effective July 22, 1994, filed as
                    exhibit of like number to the  Registrant's  Form 10-KSB for
                    the period ending June 30, 1994.
<PAGE>
10(i)(i)       *    Consulting  Agreement  between  the Company and Kerry R. Fox
                    effective  September  23,  1994,  filed as  exhibit  of like
                    number to the Registrant's  Form 10-KSB for the periodending
                    June 30, 1994.

10(i)(j)       *    Registration  Rights  Agreement  dated August 31, 1993 among
                    ATC and holders of Carnegie Film Group,  Inc.  Common Stock,
                    filed as Exhibit  10.74 to  Registrant's  Form 8-K reporting
                    events as of October 7, 1993.

10(i)(k)       *    Registration  Rights Agreement dated August 31, 1993 between
                    ATC and ComEnt,  filed as Exhibit 10.75 to Registrant's Form
                    8-K reporting events as of October 7, 1993.

10(i)(I)       *    Letter   dated  April  19,   1993  from  Budget   Rent-a-Car
                    Corporation  to  Reserve-A-Phone  Systems,  Inc.,  filed  as
                    Exhibit  10.76 to  Registrant's  Form  10-KSB for the period
                    ending June 30,1993, as amended.

10(i)(m)       *    Guaranteed  Demand  Promissory Note dated October 4, 1993 in
                    the  original  principal  amount of $150,000  payable to the
                    offer of ComEnt  Funding  Corp.  By ATC II,  Inc.,  filed as
                    Exhibit  10.77 to  Registrant's  Form  10-KSB for the period
                    ending June 30, 1993, as amended.

10(i)(n)       *    Security and Pledge  Agreement  dated as of October 4, 1993,
                    filed as Exhibit 10.78 to  Registrant's  Form 10-KSB for the
                    period ending June 30, 1993, as amended.

10(i)(o)       *    Note Purchase  Agreement dated April 7, 1993 between Unibank
                    A/S and MJC Leasing Corp. II., filed as Exhibit 10.83 to the
                    Registrant's  Form  10-KSB  for the period  ending  June 30,
                    1993, as amended.

10(i)(p)       *    Demand  Promissory Note dated March 31, 1993 in the original
                    principal amount of $350,000 payable to ComEnt Funding Corp.
                    By MJC  Leasing  Corp.  II.,  filed as Exhibit  10.84 to the
                    Registrant's  Form  10-KSB  for the period  ending  June 30,
                    1993, as amended.

10(i)(q)       *    Security and Pledge Agreement dated March 31, 1993, filed as
                    Exhibit 10.85 to the Registrant's Form 10-KSB for the period
                    ending June 30 1993, as amended.

10(i)(r)       *    Agreement  dated April 12, 1993 between MJC Leasing Corp. II
                    and ComEnt  Funding  Corp.,  filed as  Exhibit  10.86 to the
                    Registrant's  Form  10-KSB  for the period  ending  June 30,
                    1993, as amended.

10(i)(s)       *    Termination and Settlement Agreement dated November 24, 1993
                    between  Richard L. Liu and ATC II,  Inc.,  filed as Exhibit
                    10.90 to the Registrant's Form 10-KSB, for the period ending
                    June 30, 1993, as amended.

10(i)(u)       *    Termination and Settlement Agreement dated November 24, 1993
                    between  Robert  Hesse and ATC II,  Inc.,  filed as  Exhibit
                    10.92 to the Registrant's  Form 10-KSB for the period ending
                    June 30, 1993, as amended.
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10(i)(v)       *    Amendment  to  Real  Estate  Sales  Agreement   between  the
                    Company, Thistle properties, Inc., and The Canton Industrial
                    Corporation  effective  June 20,  1994,  filed as exhibit of
                    like  number to  Registrant's  Form  10-KSB  for the  period
                    ending June 30, 1994.

10(i)(w)       *    Stock Purchase Agreement between the Company and Christopher
                    Wells effective  October 10, 1994,  filed as exhibit of like
                    number to  Registrant's  Form  10-KSB for the period  ending
                    June 30, 1994.

10(i)(y)       *    Stock  Purchase  Agreement  between  the  Company  and Louis
                    Metzer effective  November 1, 1994, filed as exhibit of like
                    number to  Registrant's  Form  10-KSB for the period  ending
                    June 30, 1994.

10(i)(z)       *    Consulting  Agreement  between the Company and Louis  Metzer
                    effective  October 1, 1994,  filed as exhibit of like number
                    to  Registrant's  Form 10-KSB for the period ending June 30,
                    1994.

10(i)(aa)      *    Consulting  Agreement  between  the  Company  and Ari Herson
                    effective  October 7, 1994,  filed as exhibit of like number
                    to  Registrant's  Form 10-KSB for the period ending June 30,
                    1994.

10(i)(bb)      *    Consulting  Agreement  between the  Company and  Christopher
                    Wells  effective  October 1, 1994,  filed as exhibit of like
                    number to  Registrant's  Form  10-KSB for the period  ending
                    June 30, 1994.

10(i)(cc)      *    Compromise,  Release and  Indemnification  Agreement between
                    the Company and  ComCentral  Corp.  effective  December  29,
                    1994,  filed as Exhibit 10 to  Registrant's  Form 10-QSB for
                    the period ending December 31, 1994.

10(i)(dd)      *    Purchase  Agreement  between the Company and Turner,  Turner
                    and Associates  effective June 30, 1995, filed as Exhibit 10
                    to Registrant's  Form 8-K Current Report dated September 26,
                    1995.

10(i)(ee)      *    Rescission Agreement between the Company,  Turner,  Turner &
                    Associates,  Robert E. Turner, Richard H. Turner, and Sherry
                    L. Ruxer signed February 21, 1996.

10(ii)(a)      *    Consulting  Agreement  between the Company and Bert Martinez
                    effective April 29, 1994, filed as exhibit of like number to
                    the Registrant's  Form 10-KSB for the period ending June 30,
                    1994.

10(ii)(b)      *    Consulting  Agreement  between the Company and Bert Martinez
                    effective June 23, 1994,  filed as exhibit of like number to
                    the Registrant's  Form 10-KSB for the period ending June 30,
                    1994.

10(ii)(c)      *    Employment  Agreement  between the  Company  and Dr.  Gerald
                    Curtis  dated  August  23,  1994,  filed as  exhibit of like
                    number to the Registrant's Form 10-KSB for the period ending
                    June 30, 1994.
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10(ii)(d)      *    Employment  Agreement between the Company and Tony Geonnotti
                    dated  August 23,  1994,  filed as exhibit of like number to
                    the Registrant's  Form 10-KSB for the period ending June 30,
                    1994.

16(i)          *    Form  8-K/A   (Amendment  No.  2)  dated  October  25,  1994
                    containing  the  response  from  Swalm &  Associates  to the
                    dismissal as accountants for ATC II, Inc.

21             *    Subsidiaries of the Company, filed as exhibit of like number
                    to the  Registrant's  Form 10-KSB for the period ending June
                    30, 1994.



*  Incorporated  herein by reference from the Company's Form 10-KSB/A for fiscal
year ended June 30, 1995 filed with the Commission on August 30, 1996.

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