FORM 10-KSB
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 ANNUAL REPORT
      Pursuant Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended                         Commission file number
-------------------------                         ----------------------
    November 30, 1997                                  2-76262-NY
                         Laser Master International,Inc.
                         -------------------------------
             (Exact name of registrant as specified in its charter)

              New York                                11-2564587
              --------                                ----------
     (State or other jurisdiction of               (I.R.S. Employer
      incorporation or organization)             Identification Number)

     1000 First Street, Harrison, N.J.                    07029
     ---------------------------------                    -----
  (Address of principal executive Offices)              (Zip Code)

                                 (201) 482-7200
                                 --------------
              (Registrant's telephone number, including area code)

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

                                         Name of each exchange on
        Title of each class                 which registered

    Common  Stock Par Value $.01 Per Share      Nasdaq  Bulletin  Board
    --------------------------------------      -----------------------
          Securities registered pursuant to Section 12(g) of the Act:

                                      None
                                      ----
                                (Title of Class)


                                (Title of Class)

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

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the close of the period covered by this report.


     Common Stock - Par Value $.01               10,615,380
     -----------------------------               ----------
              Class                          Outstanding Shares

   Aggregate Market Value of Non-Affiliate Stock at January 31, 1998 -  
   ---------------------------------------------------------------------
   approximately $3,485,190.
   -------------------------


<PAGE>







                                     PART I
Item 1.  BUSINESS
(a) General:

     The Company was founded in 1981 and prints for the textile industry and the
gift wrap paper industry. The company sells its products and services nationwide
thru its direct  sales force and  resellers.  In addition the company has a real
estate  division  that owns the factory  building in Harrison,  New Jersey.  The
building 247,000 square feet of which 49% is rented to two unaffiliated  tenants
and 51% is rented to  Flexo-Craft  Prints  Inc.  Flexo-Craft  Prints Inc. is the
printing  company and is engaged in the use of a  computerized  laser  system to
accomplish  Flexographic  printing for industrial  and  commercial  printing and
engraving, and counts among its customers large corporations,  some of which are
listed on the NY Stock Exchange.

     Flexo-Craft (Process)

     The  principal  operation of  Flexo-Craft  is to utilize a ZED laser in its
process.  A laser is a device which emits a  "coherent"  wavelength  (color).  A
large degree of control is thus afforded, and as a consequence, an exceptionally
high density of power can be delivered  to a  well-defined  area by focusing the
light energy. Using a computer driven system the laser beam makes grooves in the
form of designs and patterns onto a rubber material. The rubber material is then
sealed on a steel or aluminum cylinder which is then placed on a printing press.
In the heat transfer printing process the ink is injected into the grooves using
a computer  driven  process and then the rubber coated  cylinder  prints on heat
transfer paper. The heat transfer paper is sold to  manufacturers  who then seal
it onto textile  materials.  The same process is used for gift wrap paper except
that the paper itself is the final product.  One of the six color presses prints
heat  transfer  paper and the other six color press prints gift wrap paper.  The
new eight  color  press can print  either  paper and in  addition  can allow the
company  to  print  for  the  wallpaper,  home  furnishings,  carpet  and  other
industries. It also is three times faster than the newest six color press.

The Company  either  accepts  patterns  from the  customer or can design its own
patterns using a computerized  color separating  system. In addition the Company
has a extensive  supply of rubber coated cylinders with designs already engraved
which can be used numerous times and for many years.

INDUSTRY SEGMENT INFORMATION

During  the last two  fiscal  years  ending  November  30,  1997 and  1996,  the
following is a listing of the percentage of revenue which contributed toward the
total revenue of the Company.

                            1997     l996
                            ----     ----
Heat Transfer                55%      57%
Gift Wrap                    42%      40%
Roll Covering                 3%       3%
                            ----     ----
Total %                     100%     100%

     The Company does not consider itself to be in a seasonal business;  however
prior to the  Christmas  Season,  its  Christmas  gift  wrap  business  tends to
increase in the percentage of volume during the season.


                                       -2-

<PAGE>


COMPETITION

Flexo Craft is subject to competition insofar as the laser engraving application
to industrial and commercial printing engraving is concerned.

There is no assurance that other  companies with far greater  resources will not
engage in the same  business as Flexo Craft.  Flexo Craft  competes with a major
competitor  in the use of the  laser in its  business.  There  are  three  other
companies who engage in a business similar to that of the Company.  In addition,
Flexo Craft competes with many other companies who use  conventional  methods of
processing, which do not include the use of the laser.


The Company presently sells to approximately 150 customers. The Company does not
depend  upon one  customer  or a few that  would  materially  affect  its sales,
however,  the loss of a certain  number of its  customers  would have a material
effect upon the business of the company.

The Company has  approximately  three to four  competitors  in its Heat Transfer
Business;  approximately  twelve in its Gift Wrap Business;  and two to three in
its Roll Covering Business.

The  Company  competes  with its  competitors  principally  with  respect to the
quality of its  product and the ability of the Company to deliver its product on
a timely basis to its customers.  Generally,  price is not the most  significant
factor with  respect to a customer,  as the customer is most  interested  in the
quality of the product delivered to it.

The Company does not have sales  representatives  and maintains a sales staff of
six individuals who visit the customers of the Company on a national basis.

EMPLOYEES

The Company  currently has employed  seventy-eight  people, of which five are in
Management  and  seventy  are  Members of Local  1718 of the  United  Production
Workers.  The  Company  generally  enjoys  favorable  relations  with its  union
employees, and has not in its history had any strike or any work stoppage.

OTHER INFORMATION

The  Company  is not  dependent  on a single  customer  or a  limited  number of
customers.  No  material  portion  of  the  Company's  business  is  subject  to
government  contracts.  Compliance  with federal,  state or local  environmental
protection laws has no material affect on the capital expenditures,  earnings or
competitive position of the Company.

         Backlog of orders:

                          Dollar amount of backlog and percentage expected to be
                          filled during the fiscal year.

As of:

November 30, 1997             $2,500,000              100%
November 30, 1996              2,000,000              100%



                                       -3-

<PAGE>

    The backlog of orders,  as stated,  is not affected by the seasonal cycle of
the industry  throughout  the year. The Company filled all of its backlog orders
during its last fiscal year ended November 30, 1997 and  anticipated  being able
to fill all it current backlog orders during its fiscal year ending November 30,
1998.

Flexo  Craft  orders are  generally  subject to  cancelable  purchase  orders or
contracts.  The rate of cancellation of orders has been insignificant.  Although
the stated  backlog may be used as a guideline in  determining  the orders which
may be delivered, the backlog is subject to change by reason of several factors,
including  possible  cancellation,  and  should  not be  relied  upon  as  being
necessarily indicative of the company's revenues or profits within the indicated
period, or otherwise.

ITEM 2. PROPERTIES

The Company owns all the issued and outstanding  common stock of Harrison Realty
Corp., which is the owner of the real property, plant and office facility of the
Company.  The  building  owned  by  Harrison  Realty  Corp.  is a  single  story
industrial  building  located at 1000 First Street,  Harrison,  New Jersey.  The
building was  constructed in 1994 and is fully detached and contains a sprinkler
system and heavy duty  electrical  wires,  required by the Company's Flexo Craft
facilities for use in its printing  process.  The building area is approximately
240,000 square feet,  which is 51% utilized by the Company.  The building has an
existing  mortgage in the sum of  $1,895,000  as well as a second  mortgage  for
$606,667.  This building is  approximately  five times larger than the company's
previous facility in Brooklyn. In addition since everything is on a single floor
the company will be able to operate much more efficiently in the future.

The Company  currently has two tenants who are not affiliated  with the Company,
and have executed leases at 1000 First Street.  Information about the tenants of
Harrison Realty Corp. can be found in Note 1 to the financial statements.

ITEM 3. LITIGATION

There are no proceedings  contemplated or threatened by any Government or agency
against the Company of any of its Subsidiaries.

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

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter of the fiscal year covered by this report.

                                     PART II

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

The quarterly high and low prices of the Company's common stock are as follows:

    (1) The Company's common shares are quoted on the Nasdaq Bulletin
        Board.

                                       -4-


<PAGE>


    (2)  The  quarterly  high and low prices of the  Company's  common  stock as
         traded were as follows:

                             1997                1996
                         High   Low            High   Low
                         -----  -----         ------  ----
First Quarter            1-1/2    7/8         2        3/4
Second Quarter             3/4    1/2         3-1/8  1-1/8
Third Quarter              1/2    3/8         2-1/4  1-1/8
Fourth Quarter           11/16   5/16         1-1/2  21/32


    (3) The  approximate  number of  shareholders of record on November 30, 1997
        was 585.

    (4) No cash  dividends  have ever been  declared nor are any expected in the
        near future.

    (5) Mr. Mendel Klein is the owner of 3,625,000 shares.  Pursuant to Rule 144
        of the 1933 SEC ACT, he is  permitted  to sell 7,725 shares in every six
        month period.  The offering of these shares could have an adverse effect
        on the market price of the stock.

ITEM 6.     SELECTED FINANCIAL DATA  -  fiscal year ended

                11/30/97    11/30/96    11/30/95     11/30/94    11/30/93
             -----------  ----------   ----------  ----------   ----------
Revenues     $12,007,663  $11,499,811  $8,800,394   $8,270,936  $9,347,934
Net Income   $ (573,484)  $   362,119  $(178,957)   $  276,471  $  771,837
                                                              
Earnings Per
Share              (.06)          .04       (.03)         .05         .13
Cash Dividend declared
per common share     -0-         -0-        -0-        -0-      -0-

At Year End:

Totl Assets $15,224,075 $15,967,150 $13,861,245 $14,842,777 $8,251,805

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

PRINTING SEGMENT

Net sales for the year ended  November 30, 1997 totaled  $11,660,251 as compared
to  $11,118,846  for the year ended  November 30,  1996,  for an increase of 5%.
Management  attributes  the increase in sales to the fact that the company began
to enter new markets for its printed paper products such as home furnishings. As
the 8 color press begins to  contribute  in 1998  management  is expecting to be
able to enter additional  markets.  The 8 color press was finally completely and
successfully  upgraded  and  repaired by the  manufacturer  in January 98. The 8
color press which was  delivered  and  assembled  in 1995 had no impact on sales
this year but is  beginning  to make an  impact  in 1998 and will  significantly
increase  sales in the future.  The new 8 color press was expected to contribute
towards  sales and profits in 1997 but still needed  further  modifications  and
upgrading  which has now been  finished.  The  Company  expects to operate  more
efficiently in 1998 and management anticipates a solid increase in sales.


                                       -5-


<PAGE>


Gross  profit  percentage  for 1997 was 22% compared to 31% for the year before.
This was a result of  disruptions  in the  printing  process due to the repeated
problems from the 8 color press.  Selling  expenses were 7% of sales compared to
14% in the previous year. The Company EC significantly  reduced selling expenses
to  control  costs  as  it  became  apparent  that  there  would  be  production
limitations due to the problems with the 8 color press. 

REAL ESTATE SEGMENT

Rental income for the years 1997 compared to 1996  decreased 8%. During 1997 the
operating  (loss) from the real estate  division  was ($ 28,199)  compared to ($
74,489) in 1996.  The  Company  had  substantial  start up  expenses  in the new
factory  building  in  Harrison,  New  Jersey  in  1996.  The  Company  has  two
unaffiliated tenants with monthly rental income of $28,855. This segment expects
to be  profitable  in the future now that the start up expenses  and  renovation
period is over.

CORPORATE EXPENSES

General  and  administrative  expenses  for  fiscal  1997  were  16% of sales as
compared to 10% of sales for the  preceding  year.  The  increase was due to the
fact the company  upgraded its computer  system which resulted in training costs
and computer software costs and non-recurring  expenses of professional fees and
consultants.  A Interest and finance  charges paid by the Company  during fiscal
1997  decreased  slightly  from  the  previous  year  due to the  fact  that the
company's  average debt level  decreased  from the previous  year.  The Company
does not expect any significant additional borrowings for the upcoming year.

LIQUIDITY AND CAPITAL RESOURCES:

The Company ended its fiscal year with a current ration of 1.87 compared to 2.34
in the previous  year end.  Working  capital and cash  aggregated  approximately
2,434,079 and 412,353 respectively at November 30, 1997 as compared to 3,179,239
and 396,777  respectively  at  November  30,  1996.  The  Company  believes  its
financial  position at November 30, 1997 will enable it to take advantage of any
new opportunities that may arise.

In fiscal 1997 cash flow  provided  from  operations  was $ 818,809  compared to
$(1,237,428) in 1996. The decrease in inventory levels is primarily attributable
to  decreased  inventory  levels  necessary  to  support  shorter  lead times in
obtaining raw  materials.  Accounts  receivable  decreased by $347,845 which was
because of the fact that the  company is  collecting  faster and is  stricter on
giving credit terms.  Accounts  payable  increase of $125,475 was because of the
company's  ability to obtain better credit terms because of its improved payment
history.  Net cash used by investing  activities  during 1997 was $176,964 which
was  primarily  because  of  fixed  assets  acquisitions.  Management  does  not
anticipate  any  significant  capital  expenditures  in 1998.  Net cash  used by
financing  activities  during 1997 was $626,269.  This was primarily because the
company reduced debt levels. 

The Company  anticipates that its capital resources provided from its cash flow
from  operations  and  anticipated  financing  will be  sufficient  to meet  its
financing requirements for at least the next 12 month period.



                                      - 6 -



<PAGE>



Inflationary Impact:

Since the inception of operation,  inflation has not significantly  affected the
operating results of the company. However, inflation and changing interest rates
have had a  significant  effect on the  economy in general and  therefore  could
affect the operating results of the company in the future.


                                      - 7 -


<PAGE>



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



                        LASER MASTER INTERNATIONAL, INC.
                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES



                                                               Pages   
                                                               ------
Report of Independent Auditors -----------------------------    10
                                                              
Consolidated Balance Sheets - November 30, 1997 ------------    11-12
                                                              
Consolidated Statements of Operations for the Fiscal Years    
 ended 1997 & 1996 -----------------------------------------    13
                                                              
Consolidated Statements of Stockholders Equity for the        
 Fiscal Years ended 1997 & 1996 ----------------------------    14
                                                              
Consolidated Statements of Cash Flows for the Fiscal Years    
 ended 1997 & 1996 -----------------------------------------    15
                                                              
Notes to Consolidated Financial Statements -----------------    16-25
                                                            











All other schedules called for under  Regulation S-X are not submitted  because
they are not  applicable or not required to because the required  information is
included in the financial statements or notes thereto.


                                      - 8 -



<PAGE>
















                        LASER MASTER INTERNATIONAL, INC.

                                  ANNUAL REPORT

                                FISCAL YEAR ENDED

                                NOVEMBER 30, 1997
















                                      -9-


<PAGE>


                              GOLDSTEIN AND MORRIS
                       CERTIFIED PUBLIC ACCOUNTANTS, P.C.
                              36 WEST 44TH STREET
                            NEW YORK, NEW YORK 10036


EDWARD B. MORRIS                                       TELEPHONE (212) 789-9800
ALAN J. GOLDBERG                                       FACSIMILE (212) 789-8090
---------------
ALBERT M. GOLDSTEIN


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANT


The Board of Directors and Stockholders
Laser Master International, Inc.
and wholly owned subsidiaries

We have  audited the  accompanying  consolidated  balance  sheet of Laser Master
International,  Inc.  and  subsidiaries  as of November 30, 1997 and the related
consolidated  statements of operations,  stockholders  equity and cash flows for
the two years ended November 30, 1997. These consolidated  financial  statements
are the responsibility of the Company's  Management.  Our  responsibility is to
express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated  financial position of Laser
Master  International,  Inc.  and  subsidiaries  as of November 30, 1997 and the
consolidated  results  of its  operations  and its cash flows for the two years
ended  November  30,  1997 in  conformity  with  generally  accepted  accounting
principles.







New York, New York
February 26, 1998                       /s/ Goldstein and Morris
                              







































                                     - 10 -

<PAGE>


                        LASER MASTER INTERNATIONAL, INC.
                          AND WHOLLY OWNED SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                      AS OF



                                              NOVEMBER 30
                                                 1997
                                                 ----
ASSETS

CURRENT ASSETS:
Cash in Bank                                  $   412,353
Short Term Investments-
Note 23                                           462,625
Accounts Receivable-Net
 Notes 4                                        2,237,504
Merch. Invent.-Note 2 and 5                     1,947,440
Prepaid Expenses                                   64,722
Loans Receivable                                  127,347
                                              -----------
TOTAL CURRENT ASSETS                            5,251,991
                                              -----------
FIXED ASSETS:- Note 2
Factory Building and
 Improvements - Note 6                          4,976,808
Land - Factory Site                               215,000
Mach'y & Equip. - Note 7                        8,124,395
Engraving Invent. - Note 9                        878,456
Installation Cost                                 942,797
Furniture & Fixtures                              131,956
                                              -----------
Total                                          15,269,412
Less: Accumulated Depreciation -   
      Note 8                                    5,558,589
                                              -----------
TOTAL FIXED ASSETS                              9,710,823
                                              -----------
OTHER ASSETS:
Deferred Charges - Note 3                          80,177
Restricted Cash - Note 25                         181,084
                                              -----------
TOTAL OTHER ASSETS                                261,261
                                              -----------
TOTAL ASSETS                                  $15,224,075
                                              ===========











The  accompanying  notes to financial  statements  are an integral  part of this
statement and should be in conjunction herewith.


                                  -11-

<PAGE>


                        LASER MASTER INTERNATIONAL, INC.
                          AND WHOLLY OWNED SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                      AS OF



                                              NOVEMBER 30
                                                  1997
                                                  ----
LIABILITIES

CURRENT LIABILITIES:
Accounts Payable                              $   941,222
Accrued Expenses and Taxes
  Payable                                         208,029
Loan Payable - Note 18                          1,113,660
Current Portion of Long Term
  Debt - Note 17                                  555,001
                                              -----------
TOTAL CURRENT LIABILITIES                       2,817,912
                                              -----------
LONG TERM LIABILITIES:
Long Term Debt, Net of Current
 Portion - Note 17                              4,776,666
                                              -----------
TOTAL LONG TERM LIABILITIES                     4,776,666
                                              -----------
TOTAL LIABILITIES                               7,594,578
                                              -----------
COMMITTMENTS & CONTINGENCIES - Notes 9&10

STOCKHOLDERS' EQUITY:
Capital Stock-Authorized 
 50,000,000 shares - $.01 par value 
 Issued & Outstanding - 10,615,380
 shares                                           106,154
Additional Capital Paid
in Excess of Par                                5,424,412
Unrealized Gain on Securities                      10,000
Retained Earnings                               2,088,931
                                              -----------
TOTAL STOCKHOLDERS' EQUITY                      7,629,497
                                              -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY                          $15,224,075
                                              ===========














The  accompanying  notes to financial  statements  are an integral  part of this
statement and should be read in conjunction herewith.


                                      -12-

<PAGE>

                        LASER MASTER INTERNATIONAL, INC.
                          AND WHOLLY OWNED SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                              FOR THE YEARS ENDING


                                NOVEMBER 30       NOVEMBER 30
                                   1997              1996
                                   ----              ----

REVENUES
Product Revenues                $11,660,251       $11,118,846
Rental Income                       347,412           380,966
                                -----------       -----------
TOTAL REVENUES                   12,007,663        11,499,812

COST OF SALES
Cost of Product Revenues          9,017,036         7,646,450
Cost of Rental Income               315,458           276,050
                                -----------       -----------
TOTAL COST OF SALES               9,332,494         7,922,500
                                -----------       -----------
GROSS PROFIT                      2,675,169         3,577,312

OPERATING EXPENSES
Selling Expenses                    946,437         1,662,596
Gen'l & Adm Expenses              1,990,722         1,164,100
Non-recurring exp-moving              -                33,554
                                -----------       -----------
TOTAL OPERATING EXPENSES          2,937,159         2,860,250
                                -----------       -----------
OPERATING INCOME                   (261,990)          717,062
                                -----------       -----------
Interest Expense                    421,337           455,050
Investment and Other Income         (71,827)         (138,123)
                                -----------       -----------
Income Before Inc. Tax Exp.        (611,500)          400,135
Provision for Income Taxes          (38,016)           38,016
                                -----------       -----------
NET INCOME (LOSS)                  (573,484)          362,119
                                ===========       ===========

Earnings (Loss) Per Share       $      (.06)      $       .04
                                ===========       ===========
Weighted Average Number of
 Common Shares Outstanding       10,494,990         8,166,468
                                ===========       ===========


The  accompanying  notes to financial  statements  are an integral  part of this
statement and should be read in conjunction herewith.








                                      -13-

<PAGE>

                        LASER MASTER INTERNATIONAL, INC.
                          AND WHOLLY OWNED SUBSIDIARIES
                            CONSOLIDATED STATEMENTS'
                             OF STOCKHOLDER'S EQUITY
                                 THE YEAR ENDED
                            NOVEMBER 30, 1997 & 1996




                    Common   Additional
          Common     Stock    Paid-In    Retained  Unrealized
          Shares     Amount   Capital    Earnings  Gain        Total
          ------     ------   -------    --------  ----        -----



Balance
12/1/95   5,958,335  59,583  $2,141,984   2,300,296         $4,501,863
----------------------------------------------------------------------
*         4,416,265  44,163  $3,134,836                     $3,178,999
Year ended
11/30/96                                   362,119            362,119
----------------------------------------------------------------------
Bal.
11/96   10,374,600 $103,746  $5,276,820  $2,662,415         $8,042,981
----------------------------------------------------------------------
Year ended
11/30/97  *240,780   *2,408    *147,592    (573,484) 10,000   (413,484)
----------------------------------------------------------------------
Bal.
11/97   10,615,380 $106,154  $5,424,412  $2,088,931 $10,000 $7,629,497










* Issuance of common stock at $1 per share in private placement net of costs.









The  accompanying  notes to financial  statements  are an integral  part of this
statement and should be read in conjunction herewith.





                                      -14-


<PAGE>

                        LASER MASTER INTERNATIONAL, INC.
                          AND WHOLLY OWNED SUBSIDIARIES
                     CONSOLIDATED STATEMENTS' OF CASH FLOWS
                               FOR THE YEARS ENDED



                                     NOVEMBER 30     NOVEMBER 30
                                        1997            1996
                                        ----            ----
Cash flows from 
operating activities:
 Net Income                          $ (573,484)     $   362,119

Adjustments to reconcile net
income (loss) to net cash
provided by operating activities
 Depreciation Expense                   492,277          470,574
 Amortization Expense                    10,607           10,508

Increase (Decrease) in cash flows 
from operations resulting from 
changes in:
 Accounts Receivable                    347,845         (281,088)
 Inventories                            165,754       (1,407,229)
 Prepaid Expenses                       (24,995)          50,381
 Sundry Receivable                     (127,347)            -
 Accounts Payable                       125,475         (426,152)
 Accrued Expenses                       402,677          (16,641)
                                     -----------     -----------
Net cash provided by
Operations                              818,809       (1,237,428)
                                     -----------     -----------
Cash flows from investing activities:
 Net (Purchase) of short
  term investments                      (57,402)         (49,839)
 Fixed Assets                           (93,406)      (1,299,303)
 Other Assets                             1,860          (22,024)
 Deferred Taxes                         (38,016)          38,016
 Unrealized Gain                         10,000             -
                                    ------------      -----------
Net Cash used in Investing             (176,964)      (1,333,150)
                                     -----------     -----------
Cash flow provided from (used 
for) financing activities:
 Proceeds from Capital                  150,000        3,178,999
 Proceeds from Debt                       1,234          150,000
 Repayments of Debt                    (777,503)      (1,170,390)
                                     -----------     -----------
Net cash provided by
financing activities                   (626,269)       2,158,609
                                     -----------     -----------
Net increase (decrease) in
cash                                     15,576         (411,969)

Cash at beginning of year               396,777          808,746
                                     -----------     -----------
Cash at end of year                  $  412,353      $   396,777
                                     ===========     ===========


The  accompanying  notes to financial  statements  are an integral part of this
statement and should be read in conjunction herewith.


                                      -15-

<PAGE>

                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                   CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

NOTE 1. GENERAL

        The company was founded in 1981 and prints for the textile  industry and
        the gift  wrap  paper  industry.  The  company  sells its  products  and
        services  nationwide  through its direct sales force and  resellers.  In
        addition the Company has a real estate  division that rents space in the
        factory buildings owned by the Company.

        Name and brief description of companies under common control:

        a. FLEXO-CRAFT PRINTS INC.

           The  company  has for  approximately  15 years  been  engaged  in the
           business of  commercial  printing  and  engraving,  utilizing a laser
           technique.  The  company  principally  prints  an  extensive  line of
           patterns and designs which are sold to industrial  customers  engaged
           in the manufacture of textile products and gift wrap paper.

        b. PASSPORT PAPERS INC. & EAST RIVER ARTS INC.

           These Companies are Sales Corporations which sell products printed by
           Flexo Craft Prints Inc.  They each sell under their own labels and in
           their respective markets.

        c. HARRISON REALTY CORP.

           This company owns and operates a 240,000 sq. ft. factory  building in
           Harrison,  New Jersey.  There are two unaffiliated  tenants currently
           occupying 49% of the space.  One tenant  occupies  62,600 sq. ft. and
           pays  $14,338  per month  plus  utilities  and  water  with the lease
           expiring June 30, 1999. The other tenant  occupies 53,600 sq. ft. and
           pays  $14,517  per month  plus  utilities  and  water  with the lease
           expiring  January 1, 2000.  Each of these two tenants are responsible
           for their  percentage  of real estate tax  increases for the terms of
           their leases.

           The cost of the land,  buildings and  improvements  is $4,773,388 and
           the accumulated  depreciation is $455,031 at November 30, 1997. There
           is no  contingent  rental  income for any of the  periods in which an
           income statement is presented.

           The minimum rental income expected from noncancellable leases:

           At November 30,
           -----------------------------------------------------------
           1998                                             $  346,260
           1999                                                274,570
           Subsequent years                                     14,517
           -----------------------------------------------------------
           Minimum Rental Payments                          $  635,347

 NOTE 2.   SIGNIFICANT ACCOUNTING POLICIES

       (a) The consolidated  financial  statements include the accounts of Laser
           Master  International  Inc.  and its wholly owned  subsidiaries.  All
           significant   intercompany   balances  and  transactions   have  been
           eliminated in consolidation.



                                      -16-

<PAGE>

                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                   CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

        (b) Revenue Recognition:
            Sales are recorded when title passes (either at shipment or customer
            acceptance).  Rental Income is earned based on tenant  occupancy per
            leases on the accrual basis.

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

        (d) Depreciation  of fixed assets is  calculated  on the  straight  line
            method based on estimated useful lives of 31-1/2 years for buildings
            and  improvements  and 10 to 30 years for  machinery,  equipment and
            furniture.  Maintenance  and  repairs  are  charged to  expenses  as
            incurred.

        (e) Income Taxes:
            Income taxes are computed in accordance  with Statement of Financial
            Accounting  Standards (SFAS) No. 109, "Accounting for Income Taxes".
            This statement  requires the use of the asset and liability approach
            for financial  accounting and reporting of income taxes.  Under this
            method,  deferred  tax  assets and  liabilities  are  recognized  on
            temporary  differences  between the  carrying  amounts of assets and
            liabilities for financial statement purposes and income tax purposes
            using enacted  rates  expected to be in effect when such amounts are
            realized or settled. 

            Deferred  income  taxes  and  liabilities  are  computed  for  those
            differences  that have future tax  consequences  using the currently
            enacted  tax laws and  rates  that  apply to the  income.  Valuation
            allowances are established,  if necessary to reduce the deferred tax
            asset that will,  more  likely  than not,  be  realized.  Income tax
            expense is the current tax payable or refundable for the period plus
            or minus the next change in the deferred tax assets or liabilities.

        (f) Use of Estimates:
            Management  uses estimates and  assumptions  in preparing  financial
            statements.  Those  estimates  and  assumptions  affect the reported
            amounts of assets and  liabilities,  The  disclosure  of  contingent
            assets and liabilities, and the reported revenues and expenses.

        (g) Concentrations of Credit Risk for Cash
            The company's cash balances,  including  restricted  cash, which are
            maintained in various banks are insured up to $100,000 for each bank
            by the Federal  Deposit  Insurance  Corporation.  The  balances at
            times, may exceed these limits.

        (h) Fair Value of Financial  Instruments  
            The  carrying  value  amounts  of cash,  prepaid  expenses,  accrued
            expenses and loans  payable  approximate  fair value  because of the
            short  maturity of these items.  It is not practical to estimate the
            fair value of long term debt  because  quoted  market  prices do not
            exist and estimates could not be made through other means.




                                     - 17 -

<PAGE>

                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                   CONSOLIDATED NOTES TO FINANCIAL STATEMENTS


NOTE 3. DEFERRED CHARGES
        The above account consists  principally of costs that were incurred upon
        the financing of the Company's factory building in Harrison,  New Jersey
        and the new eight color printing press. The financing was done through a
        tax  exempt  bond issue  through  the New  Jersey  Economic  Development
        Authority.  These costs include EDA fees, legal fees, other professional
        fees and other closing  costs.  The costs are being  amortized  over the
        length  of  the  loans  based  on  using  a  straight   line  method  of
        amortization.

NOTE 4. ACCOUNTS RECEIVABLE - NET
        The  allowance  for  doubtful  accounts is  $254,500  for the year ended
        November 30, 1997.

NOTE 5. INVENTORIES
        Inventories are summarized as follows: 

                                                1997    
                                             ---------- 
        Raw material & components            $  606,762 
        Work-in-process                         203,340 
        Finished goods                        1,137,338 
                                             ---------- 
                                             $1,947,440 
                                             ========== 

NOTE 6. FACTORY BUILDING AND IMPROVEMENTS
        One of the wholly owned  subsidiaries  of the company,  Harrison  Realty
        Corp.  owns the factory  building in Harrison,  New Jersey.  The factory
        building  is  240,000  sq.  ft. of which  49% is rented to  unaffiliated
        tenants.  The  building has a lst mortgage on it from Fleet Bank and the
        New Jersey EDA as well as a 2nd mortgage from Fleet Bank.

NOTE 7. MACHINERY AND EQUIPMENT
        The  machinery  and  equipment is owned by the wholly  owned  subsidiary
        Flexo-Craft   Prints  Inc.  It  consists  of  various  pieces  of  heavy
        equipment,  the  acquisition of which has been financed on an individual
        basis at the time of purchases  and  installation.  For details of these
        encumbrances,  reference is made to the  consolidated  schedule of total
        debt.

NOTE 8. INCOME TAXES
        The components of the deferred tax asset  (liability)  are summarized as
        follows:

                                                       1997
                                                    ----------
        Tax credit carryforwards ----------------  $   83,787
        Net operating loss carryforwards---------     174,018
        Allowance for doubtful accounts----------      86,530
                                                    ----------
        Gross deferred tax assets----------------     344,335
                                                    ----------
        Deferred Tax Liabilities:
        Accelerated depreciation ----------------     183,621
                                                    ----------
        Total net deferred tax assets -----------     160,714
        Less: Valuation Allowance                    (160,714)
                                                    ----------
        Net deferred tax assets -----------------   $    -
                                                    ==========



                                     - 18 -
<PAGE>

                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                   CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

CARRYFORWARD OF NET OPERATING LOSSES
The company has  available as benefits to reduce  future  Federal  income taxes,
subject  to  applicable   limitations,   the   following   net  operating   loss
carry-forwards and tax credits:

                             Tax Net
            Year          Operating Loss       Investment
           Expires         Carryforward        Tax Credit
           -------        --------------     ---------------
            1998          $      -            $     -
            1999                 -                83,787
            2000                 -                  -
            2001                 -                  -
            2011               21,459               -
            2013              511,818               -
            --------       --------------     ---------------
            Total          $  533,277          $  83,787
                           ==============     ===============


RECONCILIATION BETWEEN STATUTORY TAX RATE AND EFFECTIVE TAX RATE

                                       Fiscal Year Ended
                                      11/30/97    11/30/96 
                                      --------    -------- 
  Prov. computed at statutory rate    $   -      $ 136,046

  Tax effect of loss carryforward         -       (136,046)

  Deferred Income Tax                   (38,016)    38,016
                                      ---------  ----------
  Provision for Income Taxes          $ (38,016) $  38,016
                                      =========  =========


NOTE 9. EMPLOYMENT CONTRACTS
        The Company has entered into a five year  employment  agreement with the
        company's Chairman of the Board,  President and Treasurer commencing May
        1996.  Under the agreement,  Mr. Klein's annual salary will be $125,000.
        In addition he has the right to purchase  240,000 shares of common stock
        each year at $1 per share for a five year period.

        The Company has also entered into employment  contracts for the services
        of three key  employees  for a period of five years from May 1996,  each
        for an annual salary of $50,000.

        Each of the three key  employees  received  options to purchase  115,000
        shares each year for five years at $1.00 per share.  The total number of
        options for each employee is 575,000.

NOTE 10. CONTINGENT LIABILITIES
         The Company is contingently  liable to Fleet Bank for letters of credit
         in the amount of $4,825,972  issued in conjunction  with the New Jersey
         Tax Exempt Bonds which financed the company's new factory  building and
         8 color  press.  Fleet  Bank has a lst lien on the  assets of  Harrison
         Realty and 2nd and 3rd liens on the assets of Flexo-Craft. Per the loan
         agreement the company is  prohibited  from paying cash  dividends.  The
         loan agreement to Fleet Bank contains  various  covenants.  The Company
         was not in  compliance  with one of these  covenants,  however a waiver
         from the bank was received.


                                     - 19 -


<PAGE>

                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                   CONSOLIDATED NOTES TO FINANCIAL STATEMENTS


NOTE 11. EARNINGS (LOSS) PER SHARE
         Earnings  (loss)  per  common  and  common  equivalent  share have been
         computed  using the weighted  average  share of common stock and common
         stock  equivalents   outstanding   provided  that  the  effect  is  not
         anti-dilutive.

NOTE 12. PENSION PLAN

         The  Company  has a  non  contributory  defined  benefit  pension  plan
         covering all eligible  employees  begun in 1993.  The plan provides for
         normal  retirement  at age 65,  or at  least  age 62 with 30  years  of
         service, and optional early retirement.  The benefits payable under the
         plan are generally  determined  on the basis of an employees  length of
         service and earnings.  The Company's  funding  policy is to make annual
         contributions  to  the  extent  such   contributions   are  actuarially
         determined and tax deductible.

         The plan covers all salaried and hourly employees of the Company except
         those  covered  under  a  collective  bargaining  agreement.   Eligible
         employees  participate in the plan after completing one year of service
         and attaining age 21. The benefit formula is 22.75% of average pay plus
         22.75%   average  pay  in  excess  of  covered   compensation   reduced
         proportionately  for years of service less than 35. Pension Plan Assets
         are primarily invested in short and intermediate term cash investments.

         Assumptions:

         The  present  value of  benefits  used to  determine  the net  periodic
         pension cost,  the projected  benefit  obligation  and the  accumulated
         benefit obligation are based on the following actuarial information:

         1. Mortality                     1983-A
         2. Discount Rate:                7.50% Compounded Annually
         3. Withdrawal                    Not used
         4. Salary Projection:            3% per year
         5. Return on Plan Assets:        7.50% Compounded Annually
         6. Increase in 415 Limit:        3.0%

         Asset Valuation Method: Fair Market Value
         Net Periodic Pension Cost for Fiscal Year Ended:

                                     11/30/97       11/30/96
                                    ----------     ----------
         1. Service Cost            $  13,983     $  11,458
         2. Interest Cost              15,037        12,769
         3. Return on assets           29,788        14,454
         4. Net Amort. & deferral      22,046        10,277
                                    ---------     ----------
            Net Pension Cost        $  21,278     $  20,050
                                    =========     ==========







                                     - 20 -

<PAGE>

                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                   CONSOLIDATED NOTES TO FINANCIAL STATEMENTS


         Reconciliation of Funding Status:
                                                11/30/97    11/30/96
                                                ---------  ---------

         1. Projected Benefit Obligation        $(229,916) $(194,484)
         2. Assets at Fair Value                  215,000    155,210
         3. Funding Status                        (14,516)   (39,274)
         4. Unrecognized Net Transition
            Obligation                             71,618     76,226
         5. Unrecognized Prior Service Cost          -          -
         6. Unrecognized Net (Gain)/Loss as
            of November 30                         32,217    (20,791)
         7. Prepaid/(Accrued) Pension Expense      24,885     16,161

         Additional Liability as of November 30,
                                                11/30/97    11/30/96
                                                ---------  ---------
         1. Projected Accumulated Benefit
            Obligation                          $ 212,204  $ 182,508
         2. Fair Value of Assets                  215,000    155,210
         3. Projected Funded Status                (2,796)    27,298
         4. Prepaid/(Accrued) Pension Exp.         24,885     16,161
         5. Additional Liability                     -        43,459

         For financial  reporting purposes a pension plan is considered unfunded
         when the fair  value of the plan  assets is less  than the  accumulated
         benefit  obligation.  When that is the case a minimum pension liability
         must be recognized for the sum of the unfunded  amount plus any prepaid
         pension cost.  An intangible  asset can be recorded as an offset to the
         extent of unrecognized prior service cost and unrecognized transitional
         obligation.

NOTE 13. LONG TERM DEBT
                                                     11/30/97
                                                   -----------

Mortgage Payable - Fleet Bank - Requires monthly                    
principal payments of $3,889 plus interest at
9% per annun. maturing 11/30/02 - Collateralized 
by 2nd mortgage on factory bldg.                       606,667

NJ EDA Tax Exempt Bond - 72% of Libor Rate-
Effect. rate 5.5% -Monthly principal payments
begin 8/1/96 thru 7/31/04 at $33,750 per month-
Collateralized by the 8 color printing press         2,830,000

NJ EDA Tax Exempt Bond - 72% of Libor Rate-  
Monthly principal payments begin 8/1/95
thru 7/31/14 approx. $9,000 per month
Effective rate 5.5% - Collateralized by
factory building Harrison, New Jersey                1,895,000
                                                   -----------
Total                                                5,331,667
Less current portion                                   555,001
                                                   -----------
Total                                              $ 4,776,666
                                                   ===========





                                     - 21 -


<PAGE>

                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                   CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

               DEBT MATURITIES IN THE FIVE YEAR PERIOD FOLLOWING

                               NOVEMBER 30, 1997

                            11/30/98     $ 1,663,660
                            11/30/99         561,668
                            11/30/00         561,668
                            11/30/01         561,668
                            11/30/02         561,668
                            Thereafter   $ 2,559,995
           
NOTE 14. LOAN PAYABLE

         The Company has a line of credit with Merrill Lynch in the
         amount of $2,500,000. The interest rate is at 30 day
         commercial paper plus 2.6% with a rate at 8.2% at 11/30/97.
         The loan is collateralized by accounts receivable.

NOTE 15. INDUSTRY SEGMENT INFORMATION

                                        11/30/97     11/30/96
Sales to Unaffiliated Customers:       -----------  -----------
 Printing                              $11,660,251  $11,118,846
 Real Estate                               347,412      380,966
                                       -----------  -----------
Total                                   12,007,663   11,499,812

Earnings (loss) from Operations:
 Printing                                 (545,285)     436,608
 Real Estate                               (28,199)     (74,489)
                                       -----------  -----------
Total                                     (573,484)     362,119

Identifiable Assets:
  Printing                               9,870,234   10,002,677
  Real Estate                            5,191,808    5,105,329
                                       -----------  -----------
Total                                   15,062,042   15,108,006

Capital Expenditures:
 Printing                                    6,927      812,965
 Real Estate                                86,479      433,796
                                       -----------  -----------
Total                                       93,406    1,246,761

Depreciation & Amortization Exp.
 Printing                                  347,177      325,863
 Real Estate                               145,100      144,711
                                       -----------  -----------
Total                                  $   492,277  $   470,574
                                       ===========  ===========

NOTE 16. SHORT TERM INVESTMENTS

         In 1995 the company adopted Statement of Financial Accounting Standards
         (SFAS) No. 115,  Accounting for Certain  Investments in Debt and Equity
         Securities.  The cumulative  effect of the adoption of SFAS 115 did not
         have a material impact on the company.

         The  company  has  classified  its  entire   investment   portfolio  as
         available-for-sale.  Available-for-sale  securities  are stated at fair
         value with unrealized gains and losses included in shareholders equity.
         The amortized cost of debt  securities is adjusted for  amortization of
         premiums and accrection of discounts to maturity.  Such amortization is
         included in interest income.  Realized gains and losses are included in
         other income  (expense).  The cost of  securities  sold is based on the
         specific identification method.

                                     - 22 -

                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                   CONSOLIDATED NOTES TO FINANCIAL STATEMENTS


NOTE 17. RESTRICTED CASH
         Restricted cash consists of short term United States Treasury Bill Fund
         with 30 day  maturities.  The account is restricted  for the purpose of
         funding a sinking fund toward the payment of NJ EDA obligations.

NOTE 18. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
          Cash paid during the year for:
                                1997        1996
                              ---------  ---------
         Interest             $ 423,219  $ 453,164

NOTE 19. LOANS RECEIVABLE
         Consists of amounts due from officers  which are due on demand  with
         interest at the prime lending rate.

NOTE 20. STOCK OPTIONS
         In 1995, the Financial  Accounting  Standard Board issued Statements of
         Financial  Accounting  Standards  No. 123 (SFAS 123).  "Accounting  for
         Stock-Based Compensation".  SFAS 123 provides companies with the option
         of expensing the "fair value" of stock options granted.  With regard to
         the Company's  stock options,  no accounting is made until such time as
         the options are exercised unless the option price is less than the fair
         value of Company  stock on the grant date.  The Company does not intend
         to change  its  current  accounting  method  regarding  stock  options.
         Therefore,  SFAS 123 will  not  impact  future  operating  results.  In
         addition  the quoted  market  price was below the  option  price on the
         grant date so no expense would have been recorded.

         A summary  of option  transactions,  including  those  options  granted
         pursuant to the terms of certain employment and other agreements, is as
         follows:

                                   Option         Weighted Average
                                   Shares         Exercise Price
                                 ------------     -----------------

Balance, Dec. 1, 1995                -                   -
Granted                            1,920,000           1.05
Exercised                            -                   -
Cancelled                            -                   -
                                 ------------      ----------------
Balance, Nov. 30, 1996             1,920,000           1.05
Granted                              345,000           1.00
Exercised                             -                  -
Cancelled                           (100,000)         (1.00)
                                 ------------      ----------------
Balance, Nov. 30, 1997             2,165,000           1.05
                                 ============      ================     



                                      -23-


<PAGE>

                        LASER MASTER INTERNATIONAL, INC.
                         AND WHOLLY OWNED SUBSIDIARIES
                   CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

A summary of options outstanding as of November 30, 1997 is as follows:

                                   Weighted Average
                    Exercise       Remaining           Number of Shares
Number Outstanding  Price          Contractual Life    Exercisable
------------------  -----          ----------------    -----------

      100,000        2.00              .4 Years           100,000
    2,065,000        1.00             3.4 Years         1,345,000
    ---------                                           ---------
    2,165,000                                           1,445,000
    =========                                           =========

Warrants to Purchase Common Stock
---------------------------------
At November 30, 1997, the Company had outstanding warrants as
follows:

     Number         Exercise       Expiration
     of Shares      Price          Date
     ---------      --------       ------------
      300,000        $1.00         May 10, 1999
      500,000        $2.00         May 10, 1999



The company has stock plans approved by the shareholders, which provide for the
granting of options and restricted stock to officers, key employees and
consultants. Options are granted at no less than fair market value on the date
of grant and become exercisable in increments, in some instances partially
conditioned on the attainment of specific performance objectives, and expire
five years from the date of grant.





                                      -24-




<PAGE>

     ITEM 9. DISAGREEMENTS OF ACCOUNTING AND FINANCIAL DISCLOSURES
             -----------------------------------------------------

                        NONE














                                     - 25 -

<PAGE>


                             PART III



ITEM 10. DIRECTORS AND OFFICERS OF THE REGISTRANT

Name              Age         Position               Term
----              ---         --------               ----

Mendel Klein      65     President, Treasurer       1 Year
                         Chairman of the Board

Leah Klein        62     Vice-President,            1 Year
                         Secretary, Director

Mirel Spitz       39     Vice-President,            1 Year
                         Director

Mendel Klein and Leah Klein are spouses.
Mirel Spitz is their daughter.


ITEM 11. REMUNERATION OF DIRECTORS AND OFFICERS

                   Capacity in which remuneration
Name               was received                        Annual Salary
----               ------------                        -------------

Mendel Klein       President, Treasurer, Chairman       $125,000
                   of the Board

Leah Klein         Vice-President, Secretary, Director     -0-

Mirel Spitz        Vice President, Director,               -0-
                   Office Manager

Mr.  Mendel  Klein,  pursuant to an  employment  contract  entered into with the
company,  which became  effective  upon  completion of the public  offering,  is
entitled to receive an annual salary of $125,000.  Additionally,  Mr. Klein will
participate in group life, accident and hospitalization insurance,  provided for
all key employees,  and he will have the use of a company owned  automobile.  No
other officer or director has a contract of employment  with the company.  There
are no consulting agreements in existence between the company and any officers.














                                     - 26 -


<PAGE>


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT

(a) Security Ownership of Certain Beneficial Owners


                  Name and Address      Number of      Percent
Title of Class    of Beneficial Owner   Shares Owned   of Class
--------------    -------------------   ------------   --------

Common Stock      Mendel Klein          3,625,000         35%
$0.01 Par Value   38 Harrison Avenue
                  Brooklyn, N.Y. 11211


Set forth above is certain information concerning persons or firms who are known
by the Company to own  beneficially  more than 5% of the Company's  common stock
and voting shares on March 6, 1998.

(b) Security  Ownership of  Management  None,  other than Mendel  Klein,  listed
    above.

(c) Changes in Control
    The Company knows of no contractual  arrangements  which may at a subsequent
    date result in a change in control of the company.













                                     - 27 -

<PAGE>



                                 PART IV



ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
         AND REPORTS ON FORM 8-K


(A) Financial Statements, Financial Statement Schedules, and Exhibits

    1. Financial Statements. See Item 8 for the Financial Statements
       of the Company filed as a part hereof (Exhibits omitted)

    2. Financial Statement Schedules. See Item 8 for the Financial
       Statement Schedules of the Company filed as a part hereof.


















                                      -28-

<PAGE>



        OFFICERS:
         Mendel Klein, President, Treasurer
         Leah Klein, Vice President & Secretary
         Mirel Spitz, Vice President

         DIRECTORS:
         Mendel Klein, Chairman

         Leah Klein, Director
         Muriel Klein, Director

         AUDITORS:
         Goldstein and Morris, Certified Public Accountants, P.C.

         COUNSEL:
         Baratta & Goldstein, P.C.

         TRANSFER AGENT:
         American Stock Transfer Company





























                                     - 29 -


<PAGE>




                                   SIGNATURES


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



                                   LASER MASTER INTERNATIONAL INC.


                                   BY /s/ Mendel Klein
                                      ------------------------------
                                      Mendel Klein, President and
                                      Chief Financial Officer


Dated:  March 9, 1998


Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities  Act of
1934,  this report has been signed below by the  following  persons on behalf of
the Registrant, and in the capacities and on the dates indicated.



/s/ Mendel Klein
----------------------
Mendel Klein, Director
March 9, 1998


/s/ Leah Klein
----------------------
Leah Klein, Director
March 9, 1998


Mirel Spitz
----------------------
Mirel Spitz, Director
March 9, 1998














                                     - 30 -