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

                                   FORM 10KSB

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

                   For the Fiscal Year Ended December 31, 1998

                        Commission File Number: 0-19170

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

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


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

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

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

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

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

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

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

State issuer's revenues for its most recent fiscal year. - $1,420,871.

     The aggregate  market value of the Common Stock held by  non-affiliates  of
the Registrant  was  approximately  $5,806,551  based upon the $2.44 average bid
price of these  shares on the NASDAQ  Stock  Market for the period March 1, 1999
through March 16, 1999.

     As of March 16, 1999,  there were  2,379,734  outstanding  shares of Common
Stock, $.001 par value per share.

<PAGE>

                                     PART I


ITEM 1. DESCRIPTION OF BUSINESS

     Juniper Group, Inc.'s (the "Company")  principal businesses are composed of
two (2) segments, healthcare and entertainment.

     Healthcare:  The  healthcare  operations  are conducted  through two wholly
owned subsidiaries of Juniper Medical Systems, Inc. ("JMSI"),  which is a wholly
owned subsidiary of the Company:

     (a) PartnerCare, Inc. ("PCI") is a managed care revenue enhancement company
     providing various types of services such as: Physician Practice Management,
     Managed Care Revenue  Enhancement,  Comprehensive  Pricing  Reviews,  MSOs,
     Receivable  Financing  (through a subsidiary of PCI,  PartnerCare  Funding,
     Inc.) to newly  evolving  integrated  hospital and physician  markets,  and
     Write-off Review, appeals of any third party rejections denials of accounts
     and  recovery of any third party bad debt  accounts,  including  commercial
     insurance, managed care, MediCare, Medicaid, Champus, etc.

     (b) Juniper  Healthcare  Containment  Systems,  Inc.  ("Containment")  is a
     company which  develops and provides full service  healthcare  networks for
     insurance companies and managed care markets in the Northeast U.S.

     In addition,  the Company holds a 49% interest in Nuclear Cardiac  Imaging,
Inc.("NCI"), a New Jersey corporation.  NCI is a newly formed company developing
the business of  providing  cardiac  Spect  Imaging to  cardiologists  at their
offices  without  charge to the doctor.  NCI charges  the  insurance  carrier or
managed care company directly.

     Entertainment:  The entertainment  segment is conducted principally through
Juniper  Pictures,  Inc.  ("Pictures"),  a wholly  owned  subsidiary  of Juniper
Entertainment,  Inc.  ("JEI"),  a wholly owned subsidiary of the Company,  which
engages in the acquisition,  exploitation and distribution of rights to films to
the various  media  (i.e.,  home video,  pay-per  view,  pay  television,  cable
television,  networks and  independent  syndicated  television  stations) in the
domestic and foreign marketplace.

     The Company was incorporated in July 1987 under the name Juniper  Features,
Ltd.  as a New York  corporation,  and  commenced  entertainment  operations  in
January 1988. In late 1991, the Company recognized an opportunity to expand into
healthcare and formed JMSI in September,  1991. In December 1991, JMSI, acquired
all of the outstanding capital stock of PCI. Containment commenced operations in
September  1992.  Containment  and PCI operate their business from the Company's
Great Neck  location.

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

     In order to effect the Company's  reincorporation  in Nevada,  in 1997, the
Company was merged into a newly formed,  wholly-owned  subsidiary of the Company
incorporated in Nevada.  The Nevada  subsidiary,  named Juniper Group, Inc., was
formed on January 22, 1997.

Business of Issuer

         (i)  Healthcare Cost Containment Services and Revenue Enhancement

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

     During the last few years,  the country has experienced an explosive growth
of managed care markets. The Company's new direction into the managed care arena
parallels the evolving growth within these markets.  The New York Times reported
that  managed  care  plans   enrolled  85%  of  employees  in  1997,   which  is
substantially higher than the 48% enrollment just five years ago. PartnerCare is
riding a wave of new  opportunities,  especially those arising from the plethora
of contracts executed between hospitals, physicians and managed care companies.

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

     PCI's program also includes the profiling of managed care contracts and the
performance bench marking of these agreements.  PCI validates whether or not the
projected  financial value anticipated from these  arrangements can be obtained.
PCI's  assessments  include line item audits of claims  generated  through these
relationships,  as well as trending  reviews to identify,  and document  "Silent
PPO"  activity.  PCI also  identifies  managed  care  claims  that have not been
properly  paid, or have been  written-off.  PCI then actively  pursues payors to
expedite payments to the hospital for rebilled claims.
<PAGE>
     These programs have given the Company an opportunity to service the growing
number of hospitals and  integrated  networks  that are facing the  complexities
associated with managed care contracts.  These  relationships  result in payment
errors on claims and non-compliance issues that foster sizable revenue losses to
hospitals.  PCI's new product lines target these problems and provides  services
which recapture lost revenue.

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

*        Managed Care Contract Compliance

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

*        Line Item Reviews and Administration

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

*        Regulatory Compliance

     With the growth of managed care companies and the increasing  dependence of
hospitals  and  physicians on such  companies  for payment,  the scrutiny of the
managed care contracts between the hospitals and physicians and the managed care
companies for proper compliance becomes critically important.

     During 1998,  PCI has reviewed  managed care  contracts  for  hospitals and
physicians to ensure compliance and proper  reimbursement.  It has, through this
process,  identified unreimbursed claims on behalf of its clients. For one major
hospital system, PCI has identified over $1.5 million in unreimbursed claims.

*        Silent PPO Reviews

     In the present era of managed care, hospitals often contract with a PPO for
the PPO to bring  patients to the  hospital  in  exchange  for a discount on the
hospital's  fees.  A  practice  has  arisen  whereby a PPO may sell or lease the
discounts that it has with a hospital to another PPO (with whom the hospital has
no agreement  to provide  discounted  fees) and,  unknown to the  hospital,  the
patients  of the  second  PPO  receive  substantial  discounts  even  though the
hospital never agreed to such an  arrangement.  This is referred to as a "Silent
PPO".  This  causes  the  hospital  to  lose  substantial  fees  because  it  is
discounting fees that it never agreed to.

     PCI performs  reviews for hospitals and hospital  groups to identify Silent
PPOs and thus save substantial revenues for its clients.

*         Receivable Financing

     In May 1998  PCI  formed  PartnerCare  Funding,  Inc.  ("PCFI").  PCFI,  in
conjunction  with PCI,  arranges loan  financing  based upon the  receivables of
hospitals  and  physician  groups,  thus  allowing  such  groups  to have a more
flexible  cash flow.  As of December 31, 1998,  PCFI has  arrangements  with two
integrated  systems  in New  York.  An  integrated  system  is a  grouping  of
hospitals and physicians.

                  (b) PartnerCare Synergy

     In March  1999,  the  Company  formed a joint  venture  called  PartnerCare
Synergy  ("PCS")  with  Synergy,  Inc.,  a Texas  corporation.  PCS will provide
professional  quality services to the healthcare industry by specializing in the
recovery of denied third party insurance claim to hospitals and physicians.  PCS
also  provides  services for  retrospective  audits of paid-out  (zero  balance)
managed care accounts for contract compliance and payment accuracy.

                  (c)  Healthcare Cost Containment Services

     Although revenues from previously existing contracts were recognized during
1998, new arrangements  ceased as of December 17, 1997. As of December 31, 1998,
the Company is not providing such services to providers or networks.
<PAGE>
     Containment is a provider of healthcare cost containment services for third
party  healthcare  payors.  Containment  provides  its clients  with  savings on
hospital expenditures through a geographically tailored network of high-quality,
cost-effective  healthcare  providers.  In  addition,  Containment  provides its
clients with timely, informative data claims analysis and reporting. Containment
assists  third  party  healthcare  payors,   including  group  health  insurance
companies,  in  reducing  their  costs  associated  with the  delivery of health
services.  Containment  arranges  with  networks  of  healthcare  providers  and
facilities (preferred provider organizations,  "PPOs") to discount their charges
in return for prompt  payment and access to a higher  volume of patients.  Group
health  insurance  companies  agree to channel  their  enrollees  to a preferred
provider  organization  network,  resulting in lower insurance premiums to their
clients. Containment provides supervision through sub-contractors to ensure that
the appropriate and necessary  medical services are provided to the patient in a
cost effective manner.  Containment also provides health network coverage to its
insurance clients and their enrollees.

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

     From 1992  through  December  17,  1997,  Containment  has had an  on-going
agreement  with  The  Guardian  Life  Insurance  Company  ("Guardian"),  whereby
Containment  was paid a percentage of the savings it generated for the insurance
company.  Containment  provided  this  service  for  Guardian  in New Jersey and
Connecticut.

     The  Company  has,  over the past  several  years,  worked  closely  with a
healthcare professional to bring the Company both health insurance company group
plan customers as well as professional  healthcare  providers and networks.  The
healthcare  professional has assisted in arranging the  relationships  among the
Company,  the Guardian,  and the network of providers  previously under contract
with  Containment.  The  agreement  with  the  healthcare  professional  for his
services continued until December 17, 1997 and provided that the Company pay the
healthcare  professional  commissions  at  varying  rates and grant  options  to
purchase  common stock if certain  contract  renewals  were  realized or certain
revenue levels were achieved.
   
Competition

     Based upon data  generated by the healthcare  industry and U.S.  Government
sources,  healthcare expenditures have increased from $249 billion in 1980 (9.1%
of gross  national  product) to an estimated  $700 billion in 1990 (12% of gross
national product). It is anticipated that healthcare expenditures will exceed $1
trillion  in the year  2000.  Many have  modified  their  traditional  insurance
coverage or made available to their  employees the opportunity to participate in
HMOs and PPOs. In a national survey by Foster Higgins,  reported by the New York
Times on January 20,  1998,  "managed  care plans  enrolled  85% of employees in
1997,  up from 77% in 1996,  and only 48%  five  years  ago."  The same  article
reported that 1997 was "the biggest one year shift out of traditional  indemnity
coverage  since  1994."  This has  enabled  them to take a more  active  role in
managing  healthcare  benefits  and  costs.  In  response  to the trend  towards
self-insurance  and increasing  competition  from HMOs and PPOs, group insurance
carriers have sought to control premium  increases  through the adoption of cost
containment programs.

     Although  its MCREP  services  are  different  from those  offered by other
hospital  consulting  services,  the Company  competes for  consulting  business
primarily with revenue-optimization services companies. The Company competes for
its MCREP clients by distinguishing  its services from those provided by revenue
optimization service companies, which generally do not use benchmark performance
levels of managed care  agreements or target  "Silent PPO" practices as does the
Company. Numerous companies of varying size offer revenue-optimization  services
that may be  considered  competitive  with the  Company.  The  Company  does not
believe that any single company commands  significant market share. Larger, more
established  consulting firms have an enhanced competitive position, due in part
to established  name  recognition and direct access to hospital  clients through
the provision of other services.  Small firms, although not necessarily offering
those  particular  services  comparable to those of the Company,  compete on the
basis of price.

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

     The  Company's  1998  growth  initiative  has also  driven  new  sales  and
marketing strategies, resulting in a growing interest in PCI's new product lines
which  capture  unrecovered  dollars that  hospitals are entitled to under their
managed  care  agreements.  The  initiatives  have  also been  received  well by
national hospital chains,  regional hospital networks, and larger hospitals that
have numerous managed care contracts. The result has been a growing portfolio of
hospital contracts in the New York Metropolitan area. Efforts have been underway
to address these requirements  which, when completed,  will foster greater sales
opportunities.

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

     As of December 31, 1998, PCI had five contracts for its MCREP  business,  a
decrease from fourteen at December 31, 1997.  Revenue to PCI is contingent  upon
generating revenue for each hospital under contract. For each contract in place,
based upon PCI's experience, each contract may be expected to average revenue on
an  annualized  basis of  approximately  $110,000.  The annual  revenue for each
contract fluctuates significantly depending upon many factors including, but not
limited to, the number of managed care agreements the hospital had entered,  the
capacity  of the  hospital's  information  system,  the nature of the work under
contract and the length of the period under contract.

Major Customers

     In 1998,  New York  Hospital  accounted for 51% of the total revenue of the
Company. In 1997, New York Hospital accounted for 7% of the total revenue of the
Company.  Throughout  the year  the  Company  performed  two  distinct  types of
services  for New York  Hospital and is arranging to add a third type of service
in 1999.

     In 1998, Guardian accounted for 19% of the total revenue of the Company. In
1997, Guardian accounted for 62% of the total revenue of the Company.  Effective
December 17, 1997, the Company no longer has any  contractual  arrangement  with
the Guardian. The loss of this business was replaced with a settlement agreement
between the  Company and a  healthcare  professional  with whom the  Guardian is
doing  similar  business.  The loss of the contract  with  Guardian  will have a
material  adverse effect on the  operations of the Company after 1998.  However,
the Company is  pursuing  contracts  with other  insurance  companies  and other
healthcare  providers,  such  as  the  New  York  Hospital  contract  which,  if
successful, may reduce the impact of the loss of Guardian's business.
 
     The Company does not have any other  customers the loss of which would have
a materially adverse effect upon the Company.

         (ii)     Entertainment

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

     During 1998 and 1997,  the Company  significantly  curtailed its efforts in
the  distribution  of film  licenses  to commit and focus its  resources  on the
growth of the healthcare segment,  which during that time was, and currently is,
the most  efficient  and cost  effective  strategy  for the  Company to maximize
revenue.  In 1998, the Company began directing  efforts toward  reestablishing a
foothold in the film industry.  The Company expects to begin recognizing  growth
in revenues from the sale of film licenses in 1999.

     Pictures  acquires  worldwide rights to films which are saleable to various
markets.  In acquiring the rights to a film,  Pictures analyzes the viability of
the product for  distribution in an effort to target the film's audience appeal.
Armed with its analysis,  Pictures markets the film, using sales representatives
and the efforts of its officers,  to the various media in a selective manner. In
addition,  Pictures  aids the media to which it markets its films by producing a
strategy   for   the    presentation    of   the   film,    with   a   view   to
programming/counterprogramming  against competitive media in the same market and
directing  a film to the proper  demographic  population  (i.e.,  female,  male,
child,  teenager and middle age) in order to produce the most favorable  outcome
regarding ratings and advertising revenue.
<PAGE>
     Pictures   acquires  its  film  rights  from  independent  film  production
companies.  Pictures monitors the industry for available films, concentrating on
content,  quality,  theme, actors and actresses,  plot, format and certain other
criteria to determine the film's  suitability for the home video,  pay-per-view,
pay/cable  and  commercial  media to which  Pictures  markets its product,  both
domestically and internationally.

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

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

Competition

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

Employees

     As of March 17, 1999, the Company had 7 full-time employees and 5 part-time
employees and independent contractors. Of the full-time employees, all 7 work at
the Company's offices, some of whom spend portions of their time at clients.

ITEM 2.  DESCRIPTION OF PROPERTY

     The  Company's  executive,  healthcare  and film  distribution  offices are
located at 111 Great Neck Road,  Suite 604,  Great Neck,  New York  11021.  This
property  consists  of  2,026  square  feet of  offices  and is  subleased  from
Entertainment  Financing  Inc.("EFI"),  an  entity  affiliated  with  the  Chief
Executive Officer of the Company,  currently at approximately  $6,000 per month.
EFI's lease,  and the Company's  sublease on this space expires on May 31, 2002.
EFI has agreed  that for the term of the  sub-lease  the rent paid to it will be
substantially the same rent that it pays under its master lease to the landlord.
In  addition,  in January  1995,  the  Company  opened an office in Boca  Raton,
Florida.  In September 1998, this office was closed.  This property consisted of
1900  square  feet  of  offices  and  was  sub-leased  from  EFI  Funding,  Ltd.
("Funding"),  an entity  affiliated  with the  Chief  Executive  Officer  of the
Company,  currently  at $1,150  per  month.  Funding's  lease and the  Company's
sublease on this space  expired on November 30, 1997,  and was being leased on a
month to month basis. Funding agreed that for the term of the sub-lease the rent
paid to it was  substantially  the same rent that it paid under its master lease
to the  landlord.  Minor  additional  charges are made by EFI and Funding to the
Company to cover administrative costs.

     In September 1998, NCI which is 49% owned by the Company,  opened an office
in New Jersey.  The property consists  approximately 950 square feet of offices,
currently at $1,400 per month. NCI's lease expires in September 2000.

ITEM 3. LEGAL PROCEEDINGS

     On May 22, 1996, Ordinary Guy, Inc. and Crow Productions, Inc. commenced an
action  against the  Company,  its CEO and an affiliate of the CEO in the United
States  District Court for the Eastern  District of New York seeking  damages in
the amount of $464,470.50, plus interest alleging that the Company has successor
liability  for a  judgment  entered in March of 1993 by the  Plaintiffs  against
Juniper Releasing,  Inc. ("Releasing"),  a company affiliated with the Company's
CEO.  It is  alleged  that the  Company  was  formed in 1989 as a  successor  to
Releasing and that the Company and others transferred assets out of Releasing to
avoid the  payment of  Releasing's  creditors.  This matter was settled in April
1998 for a payment of $310,000  which is paid out over three years  ending April
20, 2001. The payment is secured by 93,320 shares of the Company's common stock.
<PAGE>
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The Company held its annual meeting of  shareholders  on December 30, 1998.
The following resolutions were proposed and the vote tally was as set forth next
to each resolution:

(1)  The foregoing  nominees for election to the Board of Directors received the
     number of votes for their  election  set forth  opposite  their  respective
     names:

                                 VOTES CAST
                                ------------

                           FOR              WITHHELD
NOMINEES                 ELECTION           AUTHORITY

Vlado Paul Hreljanovic   1,568,816            10,420
Harold Horowitz          1,568,816            10,420
Marvin Rostolder         1,568,816            10,420

(2)  Proposal 2 proposed  that the Company's  certificate  of  incorporation  be
     amended to  increase  the number of  authorized  shares from  6,000,000  to
     75,000,000. The following number of shares were voted by proxy or by ballot
     for and against the proposal to amend the Certificate of  Incorporation  to
     increase  the total  amount of  authorized  shares  of  Common  Stock  from
     6,000,000 to 75,000,000.

         FOR  1,567,926           AGAINST 11,290          ABSTAIN     20     
              ---------                   ------                     ----
<PAGE>
(3)  Proposal 3 asked for approval of the Company's  1998 Stock Option Plan. The
     following number of shares were voted by proxy or by ballot for and against
     the ratification of the Company=s 1998 Stock Option Plan.

          FOR  1,567,726           AGAINST 11,510        ABSTAIN      0
               ---------                   ------                   ----

(4)  Proposal 4 sought  ratification  of the  appointment of the auditors of the
     Company for the fiscal year ended December 31, 1997.  The following  number
     of shares were voted by proxy or by ballot for and against the ratification
     of the appointment of the auditors for the year ended December 31, 1997.

          FOR  1,579,036          AGAINST     0          ABSTAIN     200
               ---------                     ---                    -----   

(5)  Proposal 5 was a proposal  requested  by a  shareowner  of the  Company and
     sought to remove the  Chairman  of the  Company.  The  following  number of
     shares  were voted by proxy or by ballot for and  against  the share  owner
     proposal.

          FOR   11,187           AGAINST   1,567,589     ABSTAIN    460
               -------                     ---------                ---   

(6)  Proposal  6  pertained  to  the  ratification  of  the  appointment  of the
     Company's  auditors  for the  fiscal  year ended  December  31,  1998.  The
     following number of shares were voted by proxy or by ballot for and against
     the  ratification  of the  appointment  of the  auditors for the year ended
     December 31, 1998.

          FOR 1,579,036          AGAINST     0           ABSTAIN     200   
              ---------                     ---                      ----

There were no broker non-votes.


                BALANCE OF PAGE HAS BEEN LEFT BLANK INTENTIONALLY
<PAGE>
                                     PART II

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

     The  Company's  common  stock is  traded  on the  National  Association  of
Securities Dealer Automated Quotation System ("NASDAQ") Small Cap Market,  under
the symbol "JUNI".  The Company's 12%  Convertible  Redeemable  Preferred  Stock
("Preferred  Stock")  is traded in the  Over-the-Counter  Market on the NASD OTC
Bulletin Board.  The Company's  Class A Warrants  expired on May 1, 1997 and the
Company's Class B Warrants expired on May 1, 1998. The following constitutes the
high and low sales  prices for the common  stock,  the Class A Warrants  and the
Class B Warrants  as  reported  by NASDAQ for each of the  quarters  of 1998 and
1997. The quotations  shown below reflect  inter-dealer  prices,  without retail
mark-up, mark-down or commission and may not represent actual transactions.

         1998                          HIGH                      LOW
         ----                          ----                      ---
FIRST QUARTER
Common Stock ...............(2)        9.38                      3.15
Class B Warrants ...........            (1)                       (1)

SECOND QUARTER
Common Stock ...............(2)        6.25                      1.10
Class B Warrants ...........            (1)                       (1)

THIRD QUARTER
Common Stock ...............           1.56                      0.75

FOURTH QUARTER
Common Stock ...............           1.44                      0.75

         1997                         HIGH                       LOW
         ----                         ----                       ---
FIRST QUARTER
Common Stock ...............(2)       10.95                     3.15
Class A Warrants ...........           (1)                       (1)
Class B Warrants ...........           (1)                       (1)

SECOND QUARTER
Common Stock ...............(2)        7.80                     3.15
Class A Warrants ...........           (1)                       (1)
Class B Warrants ...........          0.031                    0.031

THIRD QUARTER
Common Stock ...............(2)       14.05                     3.15
Class B Warrants ...........          0.063                    0.031

FOURTH QUARTER
Common Stock ...............(2)        8.60                     3.15
Class B Warrants ...........          0.219                    0.094

(1) Issue did not trade
(2) Prices have been adjusted to reflect a post 50 to 1 reverse stock split

     Preferred  Stockholders  are  entitled  to  receive  out of assets  legally
available  for  payment a dividend  at a rate of 12% per annum of the  Preferred
Stock  liquidation  preference  of $2.00 (or $.24 per annum) per share,  payable
quarterly  on March 1, June 1,  September 1 and December 1, in cash or in shares
of Common Stock having an equivalent fair market value.  Unpaid dividends on the
Company's  Preferred Stock cumulate.  The quarterly  payments due on September 1
and December 1, 1992,  and all payments due in 1993,  in 1994, in 1995, in 1996,
in 1997,  in 1998,  and the  payment due on March 1, 1999 have not yet been paid
and are  accumulating.  These  dividends  have not been declared  because earned
surplus is not available to pay a cash  dividend.  Accordingly,  dividends  will
accumulate until such time as earned surplus is available to pay a cash dividend
or until a post  effective  amendment to the  Company's  registration  statement
covering a certain number of common shares reserved for the payment of Preferred
Stock  dividends  is filed and declared  effective,  or if such number of common
shares are  insufficient  to pay  cumulative  dividends,  then until  additional
common shares are registered with the Securities and Exchange  Commission (SEC).
No  dividends  shall be  declared  or paid on the  Common  Stock  (other  than a
dividend  payable solely in shares of Common Stock) and no Common Stock shall be
purchased,  redeemed or acquired by the Company unless full cumulative dividends
on the Preferred  Stock have been paid or declared,  or cash or shares of Common
Stock have been set apart which is sufficient  to pay all  dividends  accrued on
the Preferred Stock for all past and then current dividend periods.
<PAGE>
     On March 16, 1999,  the Company  made a  selftender  for all of the 233,900
outstanding shares of 12% Non-Voting Convertible Redeemable Preferred Stock (the
"12%  Preferred") for 400,489 shares of the Company's Common Stock. The election
period for the holders of the 12%  Preferred  expires  April 16,  1999.  The 12%
Preferred that are the subject of this tender offer  constitutes  all of the 12%
Preferred  that is issued and  outstanding.  The  exchange  will be  computed as
follows:  each  holder  will be issued  the  number  of shares  that he would be
entitled  to  upon  conversion  under  the  Company's  existing  Certificate  of
Incorporation,  or an  aggregate  of 9,436  shares of Common Stock if all of the
holders of the 12%  Preferred  tender all of their  shares.  In  addition,  each
holder will be issued an amount of shares of Common Stock equal to the result of
dividing (a) the accrued dividend on the 12% Preferred share by (b) $0.9688, the
closing  price for the  Company's  Common Stock on December  31,  1998.  The 12%
Preferred  presently  entitle  the holder to  convert  to 0.04  shares of Common
Stock,  par value  $.001,  of the  Company,  and the  accrued  dividend,  before
conversion,  of 12% per annum, payable, when declared by the Board of Directors,
in cash or stock at the  Company's  option,  per  share of 12%  Preferred.  This
tender is conditioned upon the tender of at least 60% of the outstanding  shares
of the 12%  Preferred  or it will  be  withdrawn.  Shares  tendered  during  the
election  period will be held in escrow until the minimum  condition is reached.
Any  shareholders  not tendering  their 12% Preferred  will continue to have the
rights set forth in the Company's  Certificate of Incorporation.  The total cash
value of the arrearage of unpaid dividends as of December 31, 1998 is $364,884.
          
     The Company has not  declared  cash  dividends on its Common Stock and does
not  intend  to do so in  the  foreseeable  future.  If  the  Company  generates
earnings,  management's  policy is to retain such earnings for further  business
development.  It plans to maintain  this policy as long as  necessary to provide
funds for the Company's  operations.  Any future  dividend  payments will depend
upon the full payment of Preferred  Stock  dividends,  the  Company's  earnings,
financial  requirements and other relevant factors,  including  approval of such
dividends by the Board of Directors.

     As of  March  16,  1999,  there  were 229  shareholders  of  record  of the
Company's common stock, excluding shares held in street name.

Recent Sales of Unregistered Securities

     From January  through April of 1998,  the Company sold 90,775 shares of the
Company's common stock issued to non-US persons in offerings under Regulation S,
under the Securities Act of 1933, as amended, for $150,000, at prices from $1.62
to $2.25 per share.

     In 1998, the Company sold $625,000 of convertible debentures.  In 1997, the
Company  sold  $100,000 of  convertible  debentures.  During  1998,  $631,000 of
debentures were converted to 1,016,000 shares of the Company's common stock.

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

RESULTS OF OPERATIONS

Fiscal Year 1998 vs Fiscal Year 1997

     The Company's  revenues  increased to $1,421,000 in 1998 from $1,387,000 in
1997, representing a 2% increase.

     Revenue related to the Healthcare  segment increased to $1,375,000 in 1998,
from  $1,367,000 in 1997,  representing  a 1% increase.  The increase in revenue
during 1998 was  predominately  attributed  to PCI whose  revenue  increased  to
$1,105,000 in 1998,  from $513,000 in 1997.  This was the result of PCI's change
in direction  from a DRG audit  company to a Managed  Care  Revenue  Enhancement
company.

     Revenue related to entertainment increased to $46,000 in 1998 from $20,000
in 1997.

     Operating  costs decreased to $154,000 in 1998 from $606,000 in 1997, a 75%
decrease.  The  Healthcare  operating  costs  decreased to $136,000 in 1998 from
$599,000 in 1997, a 77% decrease.  As a percentage of revenue,  operating  costs
for the Healthcare  segment  decreased to 10% in 1998 from 44% in 1997.  This is
the  result  of the  joint  venture  arrangement  which  replaced  Containment's
previous business and resulted in lower gross revenue but substantially  greater
gross profit margins.

     Operating costs for  Entertainment  include film amortization and producers
royalties.  Where the  Company  acquires  licensing  rights  through  guaranteed
payments,  it records such guarantees on its balance sheet.  The amortization of
such  licensing  rights is  calculated  under  the film  forecast  method.  Film
amortization   represents   amortization  of  the  original   acquisition  price
capitalized on the balance sheet.  Producers  royalties  reflect current amounts
due  producer's  for their  share of current  revenue  for films with no minimum
guarantee obligation.
<PAGE>
     Selling,  general and  administrative  expenses  decreased to $1,709,000 in
1998 from $1,902,000 in 1997, a 10% decrease. The decreases in selling,  general
and administrative expenses were primarily attributable to the following: Public
Relations expenses of $129,000;  Salaries of $69,000;  office expense of $56,000
and Legal Expenses of $23,000; offset by increases in Commissions of $67,000 and
Interest of $32,000.

LIQUIDITY AND CAPITAL RESOURCES

     The Company had working  capital of $69,000 at December 31, 1998. The ratio
of current assets to current  liabilities  was 1.06:1 at December 31, 1998. Cash
flow used by operating activities during 1998 was $358,000.

     The Company has no material  commitments  for capital  expenditures  or the
acquisition  of films.  If cash flow  permits,  however,  the  Company  plans to
enhance its information system  capabilities to more efficiently and effectively
provide its healthcare services and to acquire additional films during 1999.

     Between January and April 1998, the Company raised an aggregate of $150,000
through the private sales of the Company's  stock,  pursuant to Section 4(2) and
Regulation S, prior to the most recent amendments to that regulation,  under the
Securities Act of 1933, as amended (the "Act").  Additionally,  during 1998, the
Company sold convertible  debentures  aggregating $625,000 and borrowed $185,000
from private lenders.

     The Company  believes  that it will need  additional  financing to meet its
operating cash  requirements for the current level of operations during the next
twelve  months,  and will  require  additional  capital in order to complete its
planned  expansion.  The Company has developed a plan to reduce its  liabilities
and improve cash flow through expanding  operations and raising additional funds
either  through  issuance of debt or equity.  From January 1, 1999 through March
16, 1999,  the Company raised  $100,000 from the sale of convertible  debentures
through offerings under private placements. The Company anticipates that it will
be able to raise the  necessary  funds it may require for the  remainder of 1999
through public or private sales of securities.  If the Company is unable to fund
its cash flow needs the Company may have to reduce or stop planned expansion, or
possibly scale back operations. The Company currently does not have any lines of
credit.

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

     During 1998 and 1997,  the Company  focused its  resources on the growth of
the healthcare  segment,  which, during that time, was and currently is the most
efficient  and  cost-effective  strategy  for the Company to  maximize  revenue.
Although  resources and capital remain limited,  the Company has begun directing
efforts  toward  reestablishing  a foothold  in the film  industry.  The Company
expects  to  continue  recognizing  growth  in  revenues  from  the sale of film
licenses in 1999.

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

     The  transition  to a Managed  Care  Revenue  Enhancement  company has also
required a retooling of the Company's  infrastructure as well as the development
of new marketing  strategies and materials.  The Company incurred  approximately
$2,750  and  $9,000  for  this  retooling  and  development  in 1998  and  1997,
respectively.  New contracts  which clearly  define PCI's new services have been
developed. In addition,  these contracts create payment terms which expedite the
collection process of PCI revenue from its new business.

     This also required new staffing  including the  recruitment  of experienced
personnel  from  the  insurance  and  managed  care   industry.   Infrastructure
initiatives,  especially those associated with information systems capabilities,
are continuing to be addressed  through  investments in new hardware,  software,
staffing and technical support, and the Company incurred  approximately  $88,000
and $31,000 on these initiatives in 1998 and 1997, respectively.
<PAGE>
     PCI  will  also  need  to  invest  in the  upgrading  of its  communication
resources,  since  telemarketing and sales initiatives  associated with national
companies  require  improvement  in the  number and  quality  of  communications
equipment.  These  additional costs have also been factored into PCI's expansion
into the national managed care arena. Fax capabilities,  electronic  mailing and
other  considerations to improve  connectivity  between PCI and its clients have
been actively reviewed and addressed.

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

Entertainment
-------------
     Although the Company's  resources and capital remain  limited,  the Company
has  begun  directing  efforts  toward  reestablishing  a  foothold  in the film
industry.  The Company expects to continue  recognizing  growth in revenues from
the sale of film licenses in 1999.

     In 1999, the Company will consider  searching for full time sales personnel
and utilizing outside sales representatives.  Initially,  the Company will begin
promoting its film library in the domestic television markets.  Secondarily,  it
will  utilize  representatives  to attend  film  festivals  and  penetrate  film
markets.

Year 2000
---------
The Company has completed the process of becoming  year 2000  compliant.  All of
the  Company's  systems  have been  updated so that none of its systems  will be
affected by the Year 2000. This process cost the Company less than $5,000.

The Company is in the process of  identifying  and  contacting  the hospitals it
services to determine the extent to which the Company's business may be affected
by those  third  parties  failure to remedy  their own Year 2000  issues.  It is
expected  that full  identification  will be completed  by March 31,  1999.  The
company does not currently have any formal information  concerning the Year 2000
compliance status of the hospitals it services but has received indications that
most of the hospitals are working on Year 2000 compliance. In the event that any
of the significant  hospitals that the Company  services do not successfully and
timely achieve Year 2000 compliance,  the Company's business or operations could
be adversely affected.

ITEM 7.  FINANCIAL STATEMENTS

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

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

         None

                                    PART III

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

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

                                    POSITIONS
NAME                       AGE      W/COMPANY                  DIRECTOR SINCE

Vlado Paul Hreljanovic     51       Chairman of the Board,          1987
                                    President, CEO and
                                    acting CFO

Harold A. Horowitz         48       Director                        1991

Marvin Rostolder           56       Director                        1998
<PAGE>
Yvonne T. Paultre          60       Secretary                        ---

Richard O. Vazquez         46       President-PCI                    ---
                                            
DIRECTORS
---------
     Vlado Paul Hreljanovic has been the President,  Chief Executive Officer and
Chairman of the Board since 1987. Upon graduation  from Fordham  University,  he
joined  KPMG  (formerly  Peat  Marwick  Mitchell  & Co.) as an  accountant.  Mr.
Hreljanovic  is and has been the  sole  shareholder,  officer  and  director  of
Entertainment Financing, Inc., which only business is as lessee of the Company's
offices in Great Neck,  New York,  and the  sub-lessor  of such premises to the
Company.

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

     Marvin  Rostolder  was elected to the Board of  Directors of the Company on
May 18, 1998. Mr.  Rostolder is the Chairman of the Board of Directors and Chief
Executive Officer of JM Marketing,  Inc., the licensee of SmallFrye Footwear. He
has served in that  capacity  since  March  1998.  Mr.  Rostolder  has served as
independent  consultant to various companies  including MedTech Co.,  BioImaging
Technology, Inc., Amba Sciences, Inc. and T.M. Marketing, Inc. From 1985 through
1998, Mr.  Rostolder served in various  capacities with North American  Transfer
Co., a  registered  Stock  Transfer  Agent and  Registrar.  Mr.  Rostolder  is a
graduate of the City University of New York and holds a Masters degree from Long
Island University in healthcare administration.

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

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

         Section 16(a) Beneficial Ownership Reporting Compliance

     To the Company's knowledge,  based solely on a review of copies of Forms 3,
4 and 5  furnished  to the Company  and  written  representations  that no other
reports  were  required  during the fiscal year ended  December  31,  1998,  the
Company's officers, directors, and 10% shareholders complied with all applicable
Section 16(a) filing requirements.

ITEM 10. EXECUTIVE COMPENSATION

     The following table sets forth information with respect to the compensation
of the Chief  Executive  Officer of the  Company  for  services  provided to the
Company and its subsidiaries in 1998, 1997 and 1996. No other executive  officer
received salary and bonus in excess of $100,000 in any such year.
<PAGE>
<TABLE>
<CAPTION>

SUMMARY COMPENSATION TABLE
                                                                                                          Long Term
                                                                                                         Compensation
                                           Annual                                                         Securities
                                        Compensation                                  Other Annual        Underlying
Name and Principal Position                 Year        Salary            Bonus       Compensation        Options (#)
---------------------------                 ----        ------            -----       ------------        -----------
<S>                                         <C>                                                                
Vlado Paul Hreljanovic                      1998        $175,460        $86,191 (1)     $31,200 (2)           -
Chairman of the Board and
Chief Executive Officer                     1997        $172,757        $19,500 (3)     $52,900 (4)           -

                                            1996        $267,774        $45,931 (6)     $56,800 (5)           -

</TABLE>

(1)  Paid in 57,461 shares of the Company's unregistered common stock, valued at
     $86,191 issued on January 1, 1998, in recognition of efforts exerted by Mr.
     Hreljanovic on behalf of the Company and its subsidiaries.

(2)  Other compensation for Mr. Hreljanovic in 1998 was primarily  comprised of,
     among other things, automobile repairs and insurance of $12,900, and health
     and life insurance of $18,200.

(3)  Paid in 13,000 shares of the Company's  unregistered  common stock, valued
     at $19,500 issued on June 18, 1997, in  recognition  of efforts  exerted by
     Mr. Hreljanovic on behalf of the Company and its subsidiaries.

(4)  Other compensation for Mr. Hreljanovic in 1997 was primarily  comprised of,
     among other things,  automobile payments,  including lease, maintenance and
     insurance of $30,600, and health and life insurance of $22,300.

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

(6)  Paid in 13,400 shares of the Company's  unregistered common stock valued at
     $45,931,  which  were  issued to Mr.  Hreljanovic  on July 1, 1996  (11,200
     shares),  and December 24, 1996 (2,200  shares),  in recognition of efforts
     exerted by Mr. Hreljanovic on behalf of the Company and its subsidiaries.
<PAGE>

Aggregate Option Exercises in Last Fiscal Year and Year-End Options
<TABLE>
<CAPTION>
                                                                        Number of
                                                                        Securities         Value of
                                                                        Underlying        Unexercised
                                                                       Unexercised       In-the-Money
                                           Shares                       Options at        Options at
                                          Acquired                     Year-end (#)      Year-end ($)
                                             On            Value       Exercisable        Exercisable
Name and Principal Position               Exercise       Realized     Unexercisable      Unexercisable
----------------------------              --------       --------     -------------      -------------                       
<S>                                        <C>            <C>          <C>                <C>    
Vlado Paul Hreljanovic                     -               -           384,880/0         $206,000/$0
Chairman of the Board and
Chief Executive Officer

</TABLE>

     Compensation of Directors:  In 1998, Mr.  Horowitz,  Mr.  Rostolder and Mr.
Feldman were issued  15,000  Shares each of the  Company's  unregistered  common
stock, valued at $5,625 each, in recognition of efforts exerted on behalf of the
Company as Board Members during 1998. Mr.  Horowitz and Mr.  Rostolder  received
options to  purchase  100,000 and 110,000  shares of common  stock at $.48,  per
share,  respectively,  as  additional  compensation  as a member of the Board of
Directors.

     Non-employee  directors are entitled to five hundred  ($500.00) dollars for
each meeting attended and to reimbursement for their  out-of-pocket  expenses in
attending such meetings.
<PAGE>
     Employment Agreements: Mr. Hreljanovic has an Employment Agreement with the
Company which expires on April 30, 2005, and that provides for his employment as
President and Chief Executive  Officer at an annual salary adjusted annually for
the CPI Index and for the reimbursement of certain expenses and insurance. Based
on the foregoing  formula,  Mr.  Hreljanovic's  salary in 1998 was approximately
$175,000.  Additionally,  the employment agreement provides that Mr. Hreljanovic
may receive shares of the Company's  common stock as  consideration  for raising
funds for the Company.  Due to a working capital deficit,  the Company is unable
to pay the entire salary in cash to Mr.  Hreljanovic  pursuant to his employment
agreement.  In  the  best  interests  of the  Company,  in  lieu  of  cash,  Mr.
Hreljanovic  has agreed to accept and the Board of  Directors  has  approved the
issuance  of shares of the  Company's  common  stock as  payment  for the unpaid
salary of 1998 and 1997.  The Company  issued  187,636 shares of common stock to
Mr.  Hreljanovic  in 1998 to  liquidate  the amount owed to him for his 1998 and
1997 salary and 57,461  shares of common stock as  additional  compensation  for
achieving certain performance benchmarks for obtaining new hospital contracts.

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

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

     Mr. Vazquez has an employment agreement, as amended, with PCI which expires
on June 30, 1999 and provides for his employment as President of PCI with annual
compensation of $135,000.  Unless terminated under the agreement, the employment
agreement  automatically  extends  to  June  30,  2000.  In  accordance  with an
amendment to Mr. Vazquez's employment agreement,  in 1998 he received options to
purchase  16,000  shares  of the  Company's  common  stock at $3.75 per share in
consideration  to forego receipt of 7,366 shares of common stock.  Additionally,
Mr.  Vazquez is entitled  to an annual  bonus to be  determined  by the Board of
Directors of the Company and options to purchase  23,600 shares of the Company's
Common Stock under the Company's 1996 Incentive  Stock Option Plan. Such options
will vest as Mr.  Vazquez  achieves  certain  annual gross  revenue  thresholds,
ranging  from  $1,000,000  to  $5,000,000  during  the  term  of his  employment
agreement.

 STOCK OPTION PLANS

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

     On December 7, 1989, a restricted stock,  non-qualified and incentive stock
option plan was adopted. The Company has authorized 7,500 shares of common stock
to be reserved for issuance thereunder. Under the terms of this plan, restricted
stock awards are authorized for employees.  Additionally,  non-qualified options
may be  granted  to  employees  directors,  consultants  and  others  who render
services to the Company.  5,392 shares of  restricted  stock have been issued to
employees, pursuant to the plans. In addition, 5,000 options have been issued to
the Chief Executive  Officer under the Plan. The Company intends to increase the
number of shares  authorized  under this Plan. Under the terms of the restricted
stock awards,  restricted  stock may be issued to employees in  consideration of
(i) cash in an amount not less than the par value thereof or such greater amount
as may be determined by the Compensation Committee of the Board of Directors and
(ii) the continued  employment of the employees  during the  restricted  period,
which will in no event be less than one year.

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

     The Company's  Incentive Stock Option aspect of the Incentive  Compensation
Plan provides for granting  incentive options to employees to purchase shares of
common  stock of the Company at option  prices  which are not less than the fair
market value of the Company's common stock at the date of grant, except that any
Incentive  Option granted to an employee  holding 10% or more of the outstanding
voting  securities of the Company must be for an option price not less than 110%
of fair market value.
<PAGE>
     Incentive Options granted under the Incentive Compensation Plan will expire
not more than 10 years from the date of the grant  (five  years from the date of
the grant in the case of a 10% Stockholder), and the Incentive Option agreements
entered into with the holders will specify the extent to which Incentive Options
may be exercised during their respective  terms. The aggregate fair market value
of the shares of common  stock  subject to  Incentive  Options that become first
exercisable  by an  optionee  in a  particular  calendar  year  may  not  exceed
$100,000.

 1996 Stock Option Plan

     On February  12, 1997,  the  shareholders  of the Company  adopted the 1996
Stock Option Plan. The Plan  supplements  the Company's 1989  Restricted  Stock,
Non-Qualified  and Incentive  Stock Option Plan. This Plan allows the Company to
grant   incentive   stock  options,   non-qualified   stock  options  and  stock
appreciation rights  (collectively  "options") to purchase up to an aggregate of
100,000  shares of  common  stock to  employees,  including  officers,  and to
non-employees involved in the continuing development and success of the Company.
The terms of the options are to be determined by the Board of Directors. Options
will not have expiration dates later than ten years from the date of grant (five
years from the date of the grant in the case of a 10%  stockholder).  The option
prices may not be less than the fair  market  value of the common  shares on the
date of grant, except that any option granted to an employee holding 10% or more
of the outstanding  voting securities of the Company must be for an option price
not less than 110% of fair market value. An option to purchase 16,000 shares of
common stock was granted to Mr.  Vazquez  under the plan.  No other options have
been granted as of the date of this report.

 1998 Stock Option Plan

     On December  30, 1998,  the  shareholders  of the Company  adopted the 1998
Stock Option Plan. The Plan  supplements  the Company's 1989  Restricted  Stock,
Non-Qualified  and Incentive  Stock Option Plan. This Plan allows the Company to
grant   incentive   stock  options,   non-qualified   stock  options  and  stock
appreciation rights  (collectively  "options") to purchase up to an aggregate of
5,000,000  shares of  common  stock to  employees,  including  officers,  and to
non-employees involved in the continuing development and success of the Company.
The terms of the options are to be determined by the Board of Directors. Options
will not have expiration dates later than ten years from the date of grant (five
years from the date of the grant in the case of a 10%  stockholder).  The option
prices may be set at any amount in the  discretion  of the Board's  Compensation
Committee. No options have been granted under the Plan.

 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table sets forth,  as of March 16,  1999:  (i) the name and
address  of each  person  who owns of  record  or who is  known by the  Board of
Directors to be beneficial owner of more than five percent (5%) of the Company's
outstanding common stock, (ii) each of the Company's Directors, and (iii) all of
the Company's Executive Officers and Directors as a group.

 NAME AND                           BENEFICIAL                PERCENT OF COMMON
 ADDRESS                            OWNERSHIP                 STOCK OUTSTANDING
 
 Vlado Paul Hreljanovic              340,837                       14.3%
 111 Great Neck Road
 Suite 604
 Great Neck, NY 11021

 Harold A. Horowitz                   28,000                        1.2%
 111 Great Neck Road
 Suite 604
 Great Neck, NY 11021

 Peter W. Feldman                     19,650                        0.8%
 777 Yamato Road
 Suite 135
 Boca Raton, FL  33134

 Marvin Rostolder                     15,000                        0.6%
 Hoffstat Lane
 Sands Point, Port Washington 11050

 Bluffdale Corporation               525,168                       22.1%
 c/o Harris Organization
 P.O. Box 0832-0858
 Panama City, Panama

 Officers and Directors as a
  group (5 Persons)                  411,177                       17.3%
<PAGE>
 ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  Company  paid  rent  under  two  subleases  during  1998 to  companies
affiliated with the Chief Executive  Officer of the Company.  The rents paid and
terms  under the  subleases  are the same as those under the  affiliate's  lease
agreements  with the  landlords.  Rent expense for the years ended  December 31,
1998, 1997, and 1996 was $77,000,  $75,000 and $95,000,  respectively.  In prior
years,  the Company  made  advances to or  received  advances  from one of those
companies for working capital  requirements.  As a result, at December 31, 1998,
the  balances  due from the  affiliates  were  approximately  $4,800  and  $900,
respectively.  Amounts  payable under those leases in 1999 and subsequent  years
are set forth below:

                                    1999            -   $61,962
                                    2000            -   $63,988
                                    2001 and
                                    thereafter      -   $93,027

     The  Company  acquired  distribution  rights  to two  films  from a company
affiliated  with the Chief  Executive  Officer  of the  Company,  for a ten-year
license  period,  which expires on June 5, 2003. The Company is obligated to pay
such company producers' fees at the contract rate. Such payments will be charged
against earnings.  In 1998 and 1997, no payments were made to such company,  and
no revenue was recognized from such films.

     During 1998, the Company's Chief  Executive  Officer made loans directly to
the Company,  made  payments to  unaffiliated  parties on behalf of the Company,
incurred travel expenses while conducting business for the Company, and received
repayments of loans and  reimbursement of certain expenses during the year. With
regard to loans to the Company,  interest  accrues at 12% per annum. The Company
also  made  advances  to its  Chief  Executive  Officer  for  business  expenses
anticipated  to be incurred by him during 1998.  At December  31, 1998,  the net
balance  due from the  Chief  Executive  Officer  for all  activities  above was
$102,000.

     In 1998,  the Company's  President and Chief  Executive  Officer was issued
57,461 shares of Common Stock, valued at $86,191 as additional  compensation for
services  performed in 1998,  and 17,000  shares  valued at $6,375 as directors'
compensation.  Further,  the Company issued 30,000 shares valued at an aggregate
of $11,250 to non-employee directors as directors' compensation.

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

 (a) Exhibits

 Exhibit  Description:

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

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

3.2  Amendment to the  Certificate of  Incorporation  of the  Registrant,  filed
     March 7, 1997 (3)

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

3.4  By-Laws of the Registrant (1)

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

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

4.1  1998 Stock Option Plan (2)

10.1 Admendment  to  Employment  Agreement  between the  Registrant  and V. Paul
     Hreljanovic, dated February 11, 1998

10.3 Consulting Agreement between Juniper Medical Systems, Inc. and Jeffrey Mann
     dated June 6, 1998
     
10.4 Consulting  Agreement  between  Registrant and Global Financial Group, Inc.
     dated November 24, 1998

10.5 Employment  Agreement between PCI, Inc. and Richard O. Vazquez,  dated June
     7, 1996 (3)

10.6 Agreement  between  PartnerCare,  Inc.and Synergy  Business  Services dated
     December 7, 1997
<PAGE>
21.1 Subsidiaries

23.1 Consent of Independent Certified Public Accountants

27.1 Financial Data Schedule
 ____________________________

(1)  Incorporated by reference to the Company's annual report on Form 10-KSB for
     the fiscal year ended December 31, 1996

(2)  Incorporated  by reference to the Company's  Proxy Statement for its Annual
     Meeting held on December 30, 1998

(3)  Incorporated by reference to the Company's annual report on Form 10-KSB for
     the fiscal year ended December 31, 1997

(b)      Reports on Form 8-K.

     The  Company  filed a Form 8-K on April 1,  1998,  relating  to the sale of
4,544,444 (prior to the fifty to one reverse stock split on May 18, 1998) shares
of the Company's  common stock at offering  prices of between $.045 and $.32 per
share in  accordance  with  Regulation S under the  Securities  Act of 1933,  as
amended.

     The Company filed a Form 8-K on April 28, 1998, relating to the settlement
of a litigation.

     The Company filed a Form 8-K on May 19, 1998,  relating to the fifty to one
reverse stock split of the Company's common stock.










                    BALANCE OF PAGE LEFT BLANK INTENTIONALLY


<PAGE>
                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS





 
                                                                      Page

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

Consolidated Balance Sheets as of December 31, 1998 and 1997........  F-3

Consolidated Statements of Income
for the two years ended December 31, 1998...........................  F-4

Consolidated Statements of Cash Flows
for the two years ended December 31, 1998...........................  F-5

Consolidated Statements of Shareholders'
Equity for the two years ended December 31, 1998....................  F-6

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













































                                       F-1
<PAGE>





               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS





Board of Directors and Shareholders
JUNIPER GROUP, INC.


    We have audited the  accompanying  consolidated  balance  sheets of Juniper
Group,  Inc. and  subsidiaries as of December 31, 1998 and 1997, and the related
consolidated  statements of income, cash flows and shareholders' equity for each
of the  years  then  ended.  These  consolidated  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

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

     In our opinion,  the consolidated  financial  statements  referred to above
present  fairly,  in all material  respects,  the financial  position of Juniper
Group,  Inc. and  subsidiaries as of December 31, 1998 and 1997, and the results
of their  operations  and their cash flows for each of the years then ended,  in
conformity with generally accepted accounting principles.

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




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






 
Great Neck, New York
March 30, 1999





















                                       F-2

<PAGE>


                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

                           CONSOLIDATED BALANCE SHEETS


                                                       December      December
                   ASSETS                              31, 1998      31, 1997
                                                       ---------    -----------
Current Assets
  Cash ...........................................   $   48,925     $   30,187 
  Accounts receivable - trade ....................      788,410        363,480  
  Due from affiliates ............................        8,085         15,570
  Investment in NCI                                     152,879           --
  Prepaid expenses and other current assets ......      215,764        141,098  
  Due from officer ...............................      101,755           --  
                                                      ----------     ----------
      Total current assets .......................    1,315,818        550,335 

  Film licenses ..................................    2,939,960      2,954,562 
  Property and equipment net of accumulated
    depreciation of $85,554 and $127,382,
    respectively .................................      141,677         98,911  
  Other assets ...................................      167,540          2,049
                                                     -----------    ----------
                                                     $4,564,995    $ 3,605,857
                                                     ===========   ===========

       LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Accounts payable and accrued expenses ..........   $1,023,541    $   835,427 
  Notes payable - current ........................      168,725        342,571 
  Due to producers - current .....................       47,178         62,086
  Due to officer .................................         -            68,662
  Due to shareholders ............................        7,000          7,000
                                                     -----------   -----------
       Total current liabilities .................    1,246,444      1,315,746

Notes payable - long term ........................      166,667         --
Due to producers - long term .....................       17,692         93,814 
                                                     -----------     ---------
       Total liabilities .........................    1,430,803      1,409,560
                                                     -----------    ----------

Shareholders' Equity
  12% Non-voting convertible redeemable
   preferred stock: $.10 par value, 875,000
   shares authorized, 233,900 and 235,900 shares
   issued and outstanding at December 31, 1998,
   and December 31, 1997: aggregate liquidation
   preference, $467,800 and $471,800 at December
   31, 1998 and December 31, 1997.................       23,390          23,590
  Common Stock - $.001 par value,75,000,000
   shares authorized, 3,072,204 and 759,915
   issued and outstanding at December 31, 1998
   and December 31, 1997, respectively ...........        3,072             760
  Capital contributions in excess of par:
   Attributed to preferred stock .................      208,523         210,303
   Attributed to common stock ....................    9,855,404       7,971,979
  Retained earnings (deficit) ....................   (6,956,197)     (6,010,335)
                                                     -----------    -----------
       Total shareholders' equity ................    3,134,192       2,196,297
                                                     -----------    -----------
                                                     $4,564,995     $ 3,605,857
                                                     ===========    ===========
 
                See Notes to Consolidated Financial Statements

                                       F-3
                                     <PAGE>

                               JUNIPER GROUP, INC
                            AND SUBSIDIARY COMPANIES

                        CONSOLIDATED STATEMENTS OF INCOME





                                                 Year Ended December 31,
                                                  1998            1997
                                              ------------    ------------
Revenues:
     Healthcare ..........................   $  1,374,871     $  1,366,666
     Entertainment .......................         46,000           20,000
                                              ------------    ------------
                                                1,420,871        1,386,666 
                                              ------------    ------------

Operating Costs:
     Healthcare ..........................        136,095          598,702   
     Entertainment .......................         17,795            7,338 
Selling, general and administrative expenses    1,708,874        1,902,429 
Settlement expense .......................        310,828             -
                                              ------------    ------------
                                                2,173,592        2,508,469 
                                              ------------    ------------
Net income (loss) before income (loss)
  from minority interest..................   $   (752,721)    $ (1,121,803)
Income (loss) from minority interest......       (193,141)           -
                                              -----------      -----------
Net income (loss) .........................      (945,862)      (1,121,803)    
                                              ============     ===========     
Weighted average number of shares outstanding   1,500,511          500,886 
                                              ============    ============
Net income (loss) per common share .......... $      (.67)    $      (2.35)
                                              ============    ============



































                 See Notes to Consolidated Financial Statements

                                       F-4
<PAGE>

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                     Year Ended December 31,
                                                       1998         1997
                                                     ---------    ---------
Operating Activities
Net income (loss) ................................  $(945,862)  $(1,121,803)
Adjustments to reconcile net cash provided
  by operating activities:
 Settlement expense...............................    310,828          -
 Amortization of film licenses ...................     14,601         9,167 
 Loss from minority interest .....................    193,141          -
 Depreciation expense ............................     22,239        37,668
 Gain on sale of assets                                (6,362)         -
 Payment of various expenses with equity .........    197,954       134,589
 Payment of directors' compensation with equity ..     17,625        18,000 
 Payment of employees' compensation with equity ..     11,040        32,208
 Payment of officers' compensation with equity....    253,589          -
Changes in assets and liabilities:
 Accounts receivable .............................   (459,930)      431,611
 Prepaid expenses and other current assets .......      8,667       (35,103) 
 Other assets ....................................       (690)        1,470 
 Due to/from officers and shareholders ...........    (42,705)       91,980
 Due from affiliates .............................      7,485        43,789
 Accounts payable and accrued expenses ...........     60,403      (342,309) 
                                                      ---------   ---------
 Net cash provided from (used for)
   operating activities ..........................   (357,977)     (698,733)
                                                      ---------   ---------
Investing activities:
 Purchase of equipment ............................   (96,479)      (21,841) 
 Purchase of film licenses ........................      --            --     
                                                      ---------   ---------
 Net cash provided from (used for) investing
   activities .....................................   (96,479)      (21,841) 
                                                      ---------   ---------

Financing activities:
 Reduction in borrowings ...........................  (253,414)     (75,815)
 Proceeds from borrowings ..........................   810,000      466,730   
 Payments to and on behalf of producers ............   (22,122)     (10,197)
 Proceeds from exercise of options .................      -         203,500 
 Proceeds from private placements ..................   150,000      151,950 
 Investment in NCI .................................  (211,270)        --
                                                      ---------   ---------
 Net cash provided from (used for)
   financing activities ............................   473,194      736,168  
                                                      ---------   ---------
 Net increase (decrease ) in cash ..................    18,738       15,594   
 Cash at beginning of period .......................    30,187       14,593  
                                                      ---------   ---------
 Cash at end of period ............................. $  48,925   $   30,187   
                                                      =========   =========


















                 See Notes to Consolidated Financial Statements


                                       F-5
<PAGE>


                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

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

<S>               <C> <C>         <C>             <C>             <C>              <C>          <C>               <C>       
Balance, December 31, 1996         $ 23,590        $210,303        $   381          $7,178,911   $(4,888,532)      $2,524,653

Proceeds from private
  placements                             -               -              69             151,881           -            151,950
Shares issued as payment for
  various expenses                       -               -              60             134,529           -            134,589
Shares issued as compensation
  to employees                           -               -              49              32,159           -             32,208
Shares issued to members of                                         
  the Board of Directors                 -               -              12              17,988           -             18,000
Shares issued from exercise of
  stock options                                                         62             203,438           -            203,500
Shares issued to convert debt
  to equity                                                            127             253,073           -            253,200
Net loss for the year ended
  December 31, 1997                      -               -               -                -       (1,121,803)      (1,121,803)
                                   _______         ________        _______          __________   ___________       __________   
Balance, December 31, 1997          23,590          210,303            760           7,971,979    (6,010,335)       2,196,297


Proceeds from private
  placements                             -               -              91             149,909           -            150,000
Shares issued as payment for
  various expenses                       -               -             416             332,287           -            332,703
Shares issued as compensation 
  to officer                             -               -             245             253,344           -            253,589
Shares issued as compensation
  to employees                           -               -              23              11,017           -             11,040
Shares issued to members of                                         
  the Board of Directors                 -               -              47              17,578           -             17,625
Shares issued to convert debt
  to equity                                                          1,490           1,117,310           -          1,118,800
Preferred stock conversion            (200)          (1,780)           -                 1,980           -               -
Net loss for the year ended
  December 31, 1998                      -               -             -                  -         (945,862)        (945,862)
                                   _______         ________        _______          __________   ___________       __________   
Balance, December 31, 1998         $23,390         $208,523        $ 3,072          $9,855,404  $ (6,956,197)      $3,134,192
                                   =======         ========        =======          ==========   ===========       ==========
</TABLE>






                 See Notes to Consolidated Financial Statements

                                       F-6
<PAGE>
                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - Summary of Significant Accounting Policies
 
  Principles of Consolidation

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

  Use of Estimates in the Preparation of Financial Statements

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

  Financial Instruments

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

  Supplemental Cash Flow Information

     Cash  paid for  interest  totaled $24,985 and  $12,237 in 1998 and 1997,
respectively.

     During 1998, the following  transactions occurred which did not require the
use of cash,  but  instead  were paid by the  issuance of the  Company's  common
stock:  payments to producers  amounting to $112,500;  officers  compensation of
$253,589; directors compensation of $17,625; payment of corporate debt amounting
to $1,006,300;  certain corporate expenses  amounting to $332,703;  and employee
compensation amounting to $11,040.

     During 1997, the following  transactions occurred which did not require the
use of cash but instead were paid by the issuance of the Company's common stock:
payments to producers amounting to $98,200; director's compensation of $18,000;
employee compensation  of $32,208;  payment of  corporate  debt  amounting  to
$155,000;  certain corporate expenses amounting to $134,589.

  Accounts Receivable

     The Company estimates an allowance for doubtful  accounts,  which allowance
amounted to  approximately  $436,000 and $108,000 at December 31, 1998 and 1997,
respectively.

  Film Licenses

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

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

                                       F-7
<PAGE>
                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 1 - Summary of Significant Accounting Policies (Continued)
 
     The Company maintains  distribution  rights to eight films for which it has
no financial  obligations unless and until the rights are sold to third parties.
The value of such  distribution  rights has not been  reflected  in the  balance
sheet.  The Company was able to acquire  these film  rights  without  guaranteed
minimum financial  commitments as a result of its ability to place such films in
various markets.
 
  Amortization of Film Licenses

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

  Property and Equipment

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

 Recognition of Revenue from License Agreements

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

  Operating Costs

     Operating  costs include costs directly  associated  with earning  revenue.
PCI's  operating  costs  include  salary  or fees  and  travel  expenses  of the
individuals  performing  the  services,  and  sales  commissions.  Containment's
revenue was associated with the settlement of a joint venture  arrangement  and,
therefore,  had no operating costs associated with it. Pictures  operating costs
include film amortization and producer's royalties.

  Major Customers

     In 1998 and 1997, New York Hospital accounted for 51% and 7%, respectively,
of the total revenue of the Company.  Throughout the year the Company  performed
two distinct  types of services for New York  Hospital and is arranging to add a
third type of service in 1999 expecting to further increase its fees.

     During 1998 and 1997,  the  Company had  revenues  from The  Guardian  Life
Insurance Company  ("Guardian"),  that represented 19% and 62% of total revenue,
respectively.  Effective  December  17,  1997,  the  Company  no longer  had any
contractual  arrangement  with  the  Guardian.  The  loss of this  business  was
replaced  with a  settlement  agreement  between the  Company  and a  healthcare
professional with whom the Guardian is conducting similiar business. The loss of
the contract with Guardian will have a material adverse effect on the operations
of the Company after 1998. However, the Company is pursuing contracts with other
healthcare providers and payors,  which if successful,  may reduce the impact of
the loss of the Guardian's business, and the dependence upon New York Hospital.

  Recapitalization

     On May 18, 1998, the Board of Directors  autorized a reverse stock split of
the Company's common shares at the rate of one share for each fifty  outstanding
shares.  All amounts from prior years have been restated  after giving effect to
this fifty to one reverse split.
  
 Net Income Per Common Share

     In February 1997, the Financial  Accounting  Standards  Board (FASB) issued
SFAS No. 128,  "Earnings per Share," which requires the presentation of both net
income per common share and net income per common share-assuming  dilution.  The
Company adopted the provisions of SFAS No. 128 effective  December 31, 1997. The
adoption  did not  impact  the  Company's  net  income  per  common  share.  The
provisions of SFAS No. 128 preclude the inclusion of any potential common shares
in the computation of any diluted  per-share amounts when a loss from continuing
operations exists. Accordingly, net income per common share-assuming dilution is
not presented.
<PAGE>
  Reclassifications

     Certain  amounts in the 1997  financial  statements  were  reclassified  to
conform to the 1998 presentation.

 
                                       F-8

<PAGE>
                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 2 - Accounts Payable and Accrued Expenses

     At December  31,  1998 and 1997,  accounts  payable  and  accrued  expenses
consisted  primarily  of legal  fees of  $360,000  and  $325,000,  respectively,
commissions of $56,000 and $51,000, respectively,  payroll taxes of $342,000 and
$167,000,  respectively, and the cost of Sub-contractors of nothing and $40,000,
respectively.  Other  accruals  relate to selling,  general  and  administrative
expenses incurred in the normal course of business.

NOTE 3 - Film Licenses

     At December  31, 1998 and 1997 film  licenses  amounted to  $2,939,959 and
$2,954,562, respectively. These reflect the Company's original acquisition price
less accumulated  amortization for the distribution  rights to 77 film licenses.
Such  amortization  amounted to $319,139  and  $304,536 at December 31, 1998 and
1997, respectively.

     The  Company has  directed  predominantly  all its time and efforts  toward
building the  healthcare  segment of the business.  Since early 1995, due to the
limited  availability  of capital,  personnel and resources,  the volume of film
sales activity was significantly  diminished.  Although the Company's  resources
and capital  remain  limited,  the Company has begun  directing  efforts  toward
reestablishing a foothold in the film industry. Growth in revenues from the sale
of film licenses is expected in 1999.

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

     Based upon the  Company's  estimates  of future  revenue as of December 31,
1998,  approximately 25% of the amortized film licenses will be amortized during
the three years ended  December 31, 2001.  Management  expects that greater than
60% of the film  licenses  applicable  to related  television  and films will be
amortized by 2003.

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

NOTE 4 - Notes Payable

     The  composition  of Notes  Payable at December 31, 1998 and 1997,  were as
follows:
 
                                                          1998             1997 
                                                          ----             ---- 
Demand Notes bearing interest at varying rate
of up to 2% per month                                  $ 58,387        $125,000 
12% Convertible Secured Promisory Notes
 maturing at June 30, 1999
 (see Note 6)                                            68,700         100,000

Settlement agreements and arbitration awards
 maturing at April 2001                                 207,236          76,800

Capital equipment loans maturing January 1999
 bearing interest at varying rates to 9.0%                1,069          40,771
                                                       --------        --------
                                                        335,392         342,571

Less current portion .........................          168,725         342,571
                                                       --------        --------
Long term portion ............................         $166,667        $   -  
                                                       ========        ========
      
                                 F-9
<PAGE> 
                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 5 - Producer's Minimum Guarantees and Participations

     Obligations  incurred in connection  with the acquisition of film licenses,
including minimum  guarantees,  producer's  participations  and settlements with
producers were $64,870 at December 31, 1998.  During 1998,  the Company  reduced
its obligations to producers by $135,000.

     The  following  schedule  summarizes  the  maturities  of the  balances  at
December 31, 1998:

                      1999                   $ 47,178
                      2000                      4,020
                      2001                      7,929
                      2002                        870
                      2003                      4,873
                                             --------
                                             $ 64,870
                                             ========


NOTE 6 - Shareholders' Equity

     Throughout  1998, the Company issued common stock through  various  private
placements  and the  exercise  of  options.  The prices at which the shares were
negotiated  and  sold  varied,  depending  upon  the bid and ask  prices  of the
Company's  common stock quoted on the NASDAQ stock  exchange.  In the aggregate,
the Company received $150,000 for 90,775 shares, and $355,450 for 130,786 shares
of common stock in 1998 and 1997, respectively.

     In connection with payments to creditors for notes payable and indebtedness
to  producers  (including  for the  acquisition  of films),  the Company  issued
1,490,096 and 127,553  shares,  valued at $1,118,800  and $253,200,  in 1998 and
1997,  respectively.  In connection with payables for operating activities,  the
Company issued 416,241 shares,  valued at $332,704,  and 59,684 shares valued at
$134,589 in 1998 and 1997, respectively. During the year, as compensation to its
Board of Directors,  the Company issued 47,000 shares of common stock, valued at
$17,625, and 12,000 shares valued at $18,000 in 1998 and 1997, respectively.
 
     Also, in 1998 and 1997,  the Company issued 23,000 shares and 49,336 shares
to employees as compensation, valued at $11,040 and $32,208, respectively.

     All shares issued in 1998 and 1997,  were not registered and, as such, were
restricted shares under the Securities Act of 1933, as amended.

     Net income  (loss) per common share for 1998 and 1997 has been  computed by
dividing net income  (loss),  after  preferred  stock dividend  requirements  of
$56,136 in 1998 and $56,520 in 1997,  by the weighted  average  number of common
shares outstanding throughout the year of 1,500,511 and 500,886, respectively.
 
  Options Granted

     In  January  1994,  in  connection  with  an  amendment  to the  Employment
Agreement for the  President and Chief  Executive  Officer,  the Company  issued
options to purchase  5,000 shares of common stock at $20.35 per share,  110% of
the market value at the effective  date (see Note 9). The options are for a term
of five years. At December 31, 1998, none of the options had been exercised.

     On October 4, 1994, the Company  engaged a consultant to assist the Company
in  public  relations  and  marketing  of  certain  products  and  services.  In
consideration  for these services,  the consultant  received options to purchase
2,000 shares of the Company's common stock at $15.50 per share. During 1997, the
option price was amended to $3.00 per share and all options were exercised.

     On February 26, 1996, the Company granted options to purchase 13,740 shares
of common stock to a consultant in  consideration  for  assistance in developing
new markets in Latin America in healthcare  services targeted to ethnic markets.
During 1996,  8,000 options were exercised.  On February 28, 1998, all remaining
outstanding options expired.

                                      F-10
<PAGE>
                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 6 - Shareholders' Equity (Continued)
     
     On August 1, 1997,  the Company  entered  into a consulting  agreement  for
promoting  and  marketing  of  PCI's  products  and  services  in the  state  of
Connecticut. As consideration, the Company granted an option to purchase 10,000
shares of common stock at $4.75 per share.  The term of the option was one year.
On September 30, 1997, all 10,000 options were exercised.

     On July 21, 1997,  the Company  entered into an agreement to receive public
relations  and  communication  services to  develop,  implement  and  maintain a
program  to  increase  the  investing  community's  awareness  of the  Company's
activities.  In addition  to  receiving a monthly  fee,  the Company  granted an
option to purchase  50,000 shares of common stock at an exercise  price of $3.00
per share.  The options were issued for a term through July 21, 2002. On October
1, 1997, all options were exercised.

     In accordance wth an amendment to the employment agreement of the President
of PCI, the Company  issued  options to purchase  16,000 shares of the Company's
common  stock at $3.75 per share in  consideration  to forego  receipt  of 7,366
shares of common stock issuable pursuant to the terms of his original agreement.
Additionally,  this key employee is entitled to an annual bonus to be determined
by the Board of Directors of the Company and options to purchase  23,600  shares
of the Company's  Common Stock under the Company's 1996  Incentive  Stock Option
Plan.  Such options will vest as certain  annual gross  revenue  thresholds  are
achieved  during the term of his  employment  agreement.  The exercise  price of
these  options will be equal to the fair market value of the shares on each date
such options vest.

     On December  30,  1998,  the Company  issued to the members of the Board of
Directors and officers of the Company, options to purchase 465,000 shares of the
Company's  common  stock for $.375 per share.  The term of the  options are five
years.  Additionally,  on  December  30,  1998,  the Company  issued  options to
purchase  180,000  shares of the  Company's  common  stock to three  consultants
(60,000 to each) for $.48 per share for services performed for the Company.  The
term of the options are five years.  Further,  on December 30, 1998, the Company
issued to the Chairman of the Board and  President  options to purchase  189,880
shares of the Company's  common stock for $.48 per share in  recognition  of his
success in raising funds for the Company  during 1998. The term of these options
are five years. At December 31, 1998, none of the options were exercised.

Convertible Preferred Stock

     The Company's  Preferred Stock entitles the holder to dividends  equivalent
to a rate of 12% of the  Preferred  Stock  liquidation  preference  of $2.00 per
annum  (or $.24 per  annum)  per  share  payable  quarterly  on March 1, June 1,
September  1,  December  1 in cash or  common  stock of the  Company  having  an
equivalent fair market value,  thereafter.  Further, each share of the Preferred
Stock is convertible at the holder's option into two shares of Common Stock.

     At December 31, 1998,  233,900 shares of Convertible  Preferred  Stock were
outstanding.   Pending  effectiveness  of  a  post-effective  amendment  to  the
Company's  registration  statement,  the  outstanding  Preferred Stock cannot be
converted.

     On March 16, 1999,  the Company  made a  selftender  for all of the 233,900
outstanding shares of 12% Non-Voting Convertible Redeemable Preferred Stock (the
"12%  Preferred") for 400,489 shares of the Company's Common Stock. The election
period for the holders of the 12%  Preferred  expires  April 16,  1999.  The 12%
Preferred that are the subject of this tender offer  constitutes  all of the 12%
Preferred  that is issued and  outstanding.  The  exchange  will be  computed as
follows:  each  holder  will be issued  the  number  of shares  that he would be
entitled  to  upon  conversion  under  the  Company's  existing  Certificate  of
Incorporation,  or an  aggregate  of 9,436  shares of Common Stock if all of the
holders of the 12%  Preferred  tender all of their  shares.  In  addition,  each
holder will be issued an amount of shares of Common Stock equal to the result of
dividing (a) the accrued dividend on the 12% Preferred share by (b) $0.9688, the
closing  price for the  Company's  Common Stock on December  31,  1998.  The 12%
Preferred  presently  entitle  the holder to  convert  to 0.04  shares of Common
Stock,  par value  $.001,  of the  Company,  and the  accrued  dividend,  before
conversion,  of 12% per annum, payable, when declared by the Board of Directors,
in cash or stock at the  Company's  option,  per  share of 12%  Preferred.  This
tender is conditioned upon the tender of at least 60% of the outstanding  shares
of the 12%  Preferred  or it will  be  withdrawn.  Shares  tendered  during  the
election  period will be held in escrow until the minimum  condition is reached.
Any  shareholders  not tendering  their 12% Preferred  will continue to have the
rights set forth in the Company's  Certificate of Incorporation.  The total cash
value of the arrearage of unpaid dividends as of December 31, 1998 is $367,944.
<PAGE>
Warrants

     On May 1, 1997, the Company's Class A Warrants expired. On May 1, 1998, the
Company's Class B Warrants expired.
     
     On May 31, 1995, the Company entered into an investment  banking  agreement
for a five year  period.  In  consideration,  the  Company  issued  warrants  to
purchase  11,350  shares of the Company's  common stock at an exercise price of
$6.75 per share.  The warrants are  exercisable  for five years,  commencing  at
various  dates from May 31, 1996 to May 31,  2001.  At December  31,  1998,  all
warrants were outstanding.  In connection with the investment  banking agreement
and the services  provided to complete that  agreement,  the Company issued to a
consultant,  warrants to purchase 1,135 shares of the Company's common stock at
an exercise price of $6.75 per share.  These warrants are  exercisable  for five
years,  commencing  at  various  dates  from May 31,  1996 to May 31,  2001.  At
December 31, 1998, all warrants were outstanding.

     On November 24,  1998,  the Company  entered  into a  consulting  agreement
whereby the consultant will perform corporate finance,  provide due diligence on
mergers  and  acquisition  candidates,   and  assist  the  Company  on  internal
structuring and the placement of new debt and equity issues.  In  consideration,
the Company granted  warrants to purchase 300,000 shares of the Company's common
stock at $.05 per share.  The warrants became  available 50% immediately and 50%
after 90 days from the date of the agreement. The term of the warrants are three
years. At December 31, 1998, none of the warrants were exercised.

Convertible Debt

     During July and August of 1997,  the Company issued a series of 12% Secured
Convertible Promissory Notes which, in the aggregate,  amounted to $100,000 (see
Note 4). The notes are secured by the Company's  Film  Licenses,  as well as the
personal guarantee, as to payment, of the President and Chief Executive Officer.
During  1998,  $31,300 of the Notes were paid.  At December 31, 1998 the Company
has loans remaining of $68,700.  The notes are convertible through June 30, 1999
into 49,964 shares of the Company's common stock  (conversion price of $1.375 or
70% of the closing price of the Company's common stock, whichever is less).


                                      F-11

                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 7 - Related Parties

     The  Company  paid  rent  under two  sub-leases  during  1998 and 1997,  to
companies  affiliated with the Chief Executive Officer. The rents paid and terms
under the subleases were  substantially  the same as those under the affiliate's
lease  agreements with the landlords.  Rent expense for the years ended December
31, 1998, and 1997 was approximately $77,000 and $75,000, respectively (see Note
8). In prior years,  the Company made advances to or received  advances from the
affiliates for working capital requirements.  As a result, at December 31, 1998,
the balances from one affiliate was approximately  $900 and the balance due from
the second affiliate was approximately $4,800.

     The  Company  acquired  distribution  rights  to two  films  from a company
affiliated with the Chief Executive Officer for a ten year license period, which
expires  on June  5,  2003.  The  Company  is  obligated  to pay the  affiliated
producers fees at the contract rate when revenue is recognized  from the sale of
the films. Such payments will be charged against earnings.  In 1998 and 1997, no
payments were made to the affiliate, and no revenue was recognized.

     The  Company  owns  distribution  rights to two films  which were  acquired
through  a company  affiliated  with the Chief  Executive  Officer,  that is the
exclusive  agent for the producers.  This  exclusive  agent is 100% owned by the
principal  shareholder of the Company, but receives no compensation for the sale
of the licensing rights. Additionally,  after recoupment of original acquisition
costs, the principal  shareholder has a 5% interest as a producer in the revenue
received by unaffiliated  entities. The Company has received no revenue relating
to these films during 1998 and 1997.
   
     At December 31, 1997,  the balance due from a company  affiliated  with the
Chief  Executive  Officer was  $13,805.  This balance was the result of advances
made, from time to time, to the affiliated  company during 1991 and 1992.  Based
upon the affiliates inability to repay these amounts since 1992, the outstanding
balance of $13,805 was written-off during 1998.

     Throughout 1998, the Company's principal shareholder and officer made loans
to, and payments on behalf of the Company and received payments from the Company
from time to time.  The largest  net balance due from the officer was  $121,000.
The net  outstanding  balance  due from the officer at December  31,  1998,  was
$102,000.

     One of the  Company's  directors was a partner in a law firm engaged by the
Company as general counsel in years prior to 1997. The Board member is no longer
affiliated with the law firm.  During 1998, as consideration  for his efforts on
behalf of the  Company,  the Board  Member  received  15,000  Shares,  valued at
$5,625.  During  1998 and 1997,  the law firm  billed  nothing  in fees,  and at
December  31,  1998,  the  outstanding  balance  due the firm was  approximately
$100,000.

     As part of salary, bonuses and other compensation,  the Company's President
and Chief  Executive  Officer (see Note 6), was issued  262,097 shares of common
stock,  valued at $259,964,  (of which,  17,000  shares valued at $6,375 was for
services as a member of the Board of  Directors).  Further,  the Company  issued
30,000 shares valued at $11,250 to other non-employee directors.

NOTE 8 - Commitments and Contingencies

  Year 2000

The Company has completed the process of becoming  year 2000  compliant.  All of
the  Company's  systems  have been  updated so that none of its systems  will be
affected by the Year 2000. This process cost the Company less than $5,000.

The Company is in the process of  identifying  and  contacting  the hospitals it
services to determine the extent to which the Company's business may be affected
by those  third  parties  failure to remedy  their own Year 2000  issues.  It is
expected  that full  identification  will be completed  by March 31,  1999.  The
company does not currently have any formal information  concerning the Year 2000
compliance status of the hospitals it services but has received indications that
most of the hospitals are working on Year 2000 compliance. In the event that any
of the significant  hospitals that the Company  services do not successfully and
timely achieve Year 2000 compliance,  the Company's business or operations could
be adversely affected.

  Leases

     The Company  leased its New York office  facilities  under a sublease.  The
Florida  office  lease  expired on November  30, 1997 and was paid on a month to
month  basis  through  September  1998 when it was  closed.  The New York  lease
expires in May 2002 (see Note 7). Future minimum annual base rental  commitments
as of December 31, 1998 are as follows:

                1999                     $ 61,962
                2000                       63,988
                2001                       66,014
                2002                       27,013
                                         --------
                                         $218,977       
                                         ========


                                      F-12
<PAGE>
                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 8 - Commitments and Contingencies (Continued)

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

  Employment Agreements

     Mr. Hreljanovic has an Employment  Agreement with the Company which expires
on April 30, 2005,  and that provides for his  employment as President and Chief
Executive  Officer at an annual salary  adjusted  annually for the CPI Index and
for the reimbursement of certain expenses and insurance.  Based on the foregoing
formula,  Mr.   Hreljanovic's   salary  in  1998  was  approximately   $175,000.
Additionally, the employment agreement provides that Mr. Hreljanovic may receive
shares of the Company's common stock as consideration  for raising funds for the
Company.  Due to a working  capital  deficit,  the  Company is unable to pay the
entire salary in cash to Mr. Hreljanovic  pursuant to his employment  agreement.
In the best  interests  of the Company,  in lieu of cash,  Mr.  Hreljanovic  has
agreed to accept and the Board of Directors  has approved the issuance of shares
of the Company's common stock as payment for the unpaid salary of 1998 and 1997.
The Company issued 187,636 shares of common stock to Mr.  Hreljanovic in 1998 to
liquidate  the amount owed to him for his 1998 and 1997 salary and 57,641 shares
of common stock as additional  compensation  for achieving  certain  performance
benchmarks for obtaining new hospital contracts.

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

     Additionally,  if the  employment  agreement is  terminated  by the Company
after a change in control (as defined by the agreement), the officer is entitled
to a lump sum cash payment equal to approximately three times his base salary.
                         
     Mr. Vazquez has an employment agreement, as amended, with PCI which expires
on June 30, 1999 and provides for his employment as President of PCI with annual
compensation of $135,000.  Unless terminated under the agreement, the employment
agreement  automatically  extends  to  June  30,  2000.  In  accordance  with an
amendment to Mr. Vazquez's employment agreement,  in 1998 he received options to
purchase  16,000  shares  of the  Company's  common  stock at $3.75 per share in
consideration  to forego receipt of 7,366 shares of common stock.  Additionally,
Mr.  Vazquez is entitled  to an annual  bonus to be  determined  by the Board of
Directors of the Company and options to purchase  23,600 shares of the Company's
Common Stock under the Company's 1996 Incentive  Stock Option Plan. Such options
will vest as Mr.  Vazquez  achieves  certain  annual gross  revenue  thresholds,
ranging  from  $1,000,000  to  $5,000,000  during  the  term  of his  employment
agreement.

Preemptive Rights

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

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



                                      F-13
<PAGE>
                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 8 - Commitments and Contingencies (Continued)

Litigation

     On May 22, 1996, Ordinary Guy, Inc. and Crow Productions, Inc. commenced an
action  against the  Company,  its CEO and an affiliate of the CEO in the United
States  District Court for the Eastern  District of New York seeking  damages in
the amount of $464,470.50, plus interest alleging that the Company has successor
liability  for a  judgment  entered in March of 1993 by the  Plaintiffs  against
Juniper Releasing,  Inc. ("Releasing"),  a company affiliated with the Company's
CEO.  It is  alleged  that the  Company  was  formed in 1989 as a  successor  to
Releasing and that the Company and others transferred assets out of Releasing to
avoid the  payment of  Releasing's  creditors.  This matter was settled in April
1998 for a payment of $310,000  which is paid out over four years  ending  April
20, 2001. The payment is secured by 93,320 shares of the Company's common stock.

Going Concern

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

*    Revenue increased  slightly to $1,421,000 in 1998, from $1,387,000 in 1997;
*    Net loss was  ($946,000)  in 1998,  and  ($1,122,000)  in 1997;
*    Working  capital  was  $69,000  at  December  31,  1998 and was a  negative
     ($765,000) at December 31, 1997.

     Additionally,  the Company has, over the past several years, worked closely
with a  healthcare  professional  to bring the  Company  both  health  insurance
company group plan customers,  as well as, professional healthcare providers and
networks.   The   healthcare   professional   has  assisted  in  arranging   the
relationships  between the Company,  the Guardian,  and the network of providers
previously  under  contract with the Company.  Effective  December 17, 1997, the
Company no longer has any contractual  arrangement with the healthcare  provider
or the  Guardian.  The loss of this  business was  temporarily  replaced  with a
settlement   agreement   during  1998  between  the  Company  and  a  healthcare
professional with whom the Guardian is conducting similar business.  The loss of
the  contract  with the  Guardian  will have a  material  adverse  effect on the
operations of the Company after 1998.

     The fact that the Company  continued to sustain losses in 1998; has minimal
working  capital at December  31, 1998;  still  requires  additional  sources of
outside cash to sustain operations, and has lost a material contract,  continues
to create  uncertainty  about  the  Company's  ability  to  continue  as a going
concern.

     Management  of the Company has  developed a plan to reduce its  liabilities
and improve cash flow through expanding  operations and raising additional funds
either  through the  issuance  of debt or equity.  The ability of the Company to
continue as a going  concern is dependent  upon the Company's  ability to raise
additional  funds either  through the issuance of debt or the sale of additional
common  stock and the success of  Management's  plan to expand  operations.  The
Company  anticipates  that it will be able to raise the  necessary  funds it may
require for the remainder of 1999 through public or private sales of securities.
The financial  statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.

NOTE 9 - Incentive Compensation Plans
 
1989 Restricted Stock, Non-Qualified and Incentive Stock Option Plan

     On December 7, 1989, a restricted stock,  non-qualified and incentive stock
option plan was adopted.  The Company has  authorized  7,500  shares of common
stock to be  reserved  for  issuance  thereunder.  Under the terms of this plan,
restricted   stock   awards  are   authorized   for   employees.   Additionally,
non-qualified  options may be granted to employees,  directors,  consultants and
others who render  services to the  Company.  Under the terms of the  restricted
stock awards,  restricted  stock may be issued to employees in  consideration of
(i) cash in an amount not less than the par value thereof or such greater amount
as may be determined by the Compensation Committee of the Board of Directors and
(ii) the continued employment of the employees during the restricted period. The
Compensation Committee sets the terms of the restricted period, which will in no
event be less than one year.  Pursuant to the plan, during 1995, 5,000 options
were issued to the President (see Note 6).


                                      F-14
<PAGE>
                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

NOTE 9 - Incentive Compensation Plans (Continued)

     During  1998,  the Board of  Directors  authorized  the  issuance of 23,000
shares of restricted  common stock,  under the incentive  compensation  plans to
employees. These shares were valued at $11,040 (see Note 6).

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

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

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

1996 Stock Option Plan

     On February 12 , 1997,  the  shareholders  of the Company  adopted the 1996
Stock Option Plan. The Plan  supplements  the Company's 1989  Restricted  Stock,
Non-Qualified  and  Incentive  Stock  Option Plan.  This Plan,  which allows the
Company to grant incentive stock options,  non-qualified stock options and stock
appreciation rights (collectively "options"), to employees,  including officers,
and to non-employees  involved in the continuing  development and success of the
Company,  authorizes the grant of 100,000 shares of common stock. The terms of
the options are to be  determined  by the Board of  Directors.  Options will not
have  expiration  dates  later than ten years from the date of grant (five years
from the date of the grant in the case of a 10% Stockholder).  The Option Prices
may not be less than the fair market  value of the common  shares on the date of
grant,  except that any option granted to an employee holding 10% or more of the
outstanding  voting  securities  of the Company  must be for an option price not
less than 110% of fair market value.

1998 Stock Option Plan

     On December  30, 1998,  the  shareholders  of the Company  adopted the 1998
Stock Option Plan. The Plan  supplements  the Company's 1989  Restricted  Stock,
Non-Qualified  and Incentive  Stock Option Plan. This Plan allows the Company to
grant   incentive   stock  options,   non-qualified   stock  options  and  stock
appreciation rights  (collectively  "options") to purchase up to an aggregate of
5,000,000  shares of  common  stock to  employees,  including  officers,  and to
non-employees involved in the continuing development and success of the Company.
The terms of the options are to be determined by the Board of Directors. Options
will not have expiration dates later than ten years from the date of grant (five
years from the date of the grant in the case of a 10%  stockholder).  The option
prices may be set at any amount in the  discretion  of the Board's  Compensation
Committee. No options have been granted under the Plan.

Statement of Financial Accounting Standards No. 123

     At December 31, 1998, the Company had one  stock-based  compensation  plan,
which is described  above.  The Company  applies APB Opinion 25,  Accounting for
Stock Issued to Employees,  and related  Interpretations  in accounting  for its
plan. Accordingly,  no compensation cost has been recognized for its fixed stock
option plan or for options issued to non-employees for services  performed.  Had
compensation  costs for these options been determined,  based on the fair market
value at the grant  dates  consistent  with the  method of FASB  Statement  123,
Accounting for Stock-Based Compensation, the Company's net income (loss) and net
income  (loss) per common share would have been reduced to the pro forma amounts
indicated below:

                                                       1998         1997 
                                                       ----         ---- 
Net income (loss) ................  As reported    $  (945,862)     $(1,121,803)
                                    Pro forma      $(1,285,075)     $(1,456,507)

Net income (loss) per common share  As reported    $     (0.67)    $      (0.05)
                                    Pro forma      $     (0.89)    $      (0.06)


                                      F-15
<PAGE>
                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 10 - Income Taxes

     For the years ended  December 31, 1998 and 1997,  no provision was made for
Federal and state income taxes due to the losses  incured  during these periods.
As a result of losses  incurred  through  December 31, 1998, the Company has net
operating loss carryforwards of approximately  $5,685,000.  These  carryforwards
expire as follows:


                         2006           $  490,000
                         2007            1,451,000
                         2008              165,000
                         2009              717,000
                         2010              231,000
                         2011              568,000
                         2012            1,107,000
                         2013              956,000
                                         ---------       
                                        $5,685,000
                                        ==========


     In accordance with Financial  Accounting  Standards Board Statement No. 109
"Accounting  for Income Taxes",  the Company  recognized  deferred tax assets of
$2,331,000,  at December  31, 1998.  The Company is dependent on future  taxable
income to realize  deferred tax assets.  Due to the uncertainty  regarding their
utilization  in the  future,  the  Company  has  recorded  a  related  valuation
allowance of  $2,331,000.  Deferred  tax assets at December  31, 1998  primarily
reflect the tax effect of net operating loss carryforwards.

NOTE 11 - Business Segment Information
 
     The  operations  of the  Company are divided  into two  business  segments:
healthcare - consisting of managed care revenue  enhancement and healthcare cost
containment  services;  and  entertainment  - consisting of the  acquisition and
distribution  of rights to films.  The Company  markets its managed care revenue
enhancement   services   throughout  the  United  States;  its  healthcare  cost
containment services are predominantly  located in the Northeast;  and films are
available to be marketed throughout the world.

       Financial information by business segment is as follows:

                                1998           1997 
                                ----           ---- 
Revenue:
      Healthcare ........   $ 1,374,871    $ 1,366,666
      Entertainment .....        46,000         20,000   
                            -----------    -----------
                            $ 1,420,871   $  1,386,666
                            ===========    ===========

 Operating Income (Loss):
      Healthcare ........   $    99,998   $   (246,006)    
      Entertainment......       (93,930)       (90,790)
      Corporate .........      (951,930)      (785,007)
                            -----------    ----------- 
                            $  (945,862)   $(1,121,803)
                            ===========    =========== 
  





                                      F-16
<PAGE>
                               JUNIPER GROUP, INC.
                            AND SUBSIDIARY COMPANIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


NOTE 11 - Business Segment Information (Continued)

                               1998          1997 
                               ----          ---- 
Identifiable Assets:
     Healthcare .........   $  674,416   $  315,038
     Entertainment ......    3,130,078    3,157,157
     Corporate ..........      760,501      133,660
                            ----------   ----------
                            $4,564,995   $3,605,855
                            ==========   ==========

    Depreciation:
     Healthcare .........   $   16,036   $    7,383
     Corporate ..........        6,203       30,284
                            ----------   ----------
                            $   22,239   $   37,667
                            ==========   ==========

    Capital Expenditures:
     Healthcare .........   $   96,479   $    4,145
     Corporate ..........         -          17,696
                            ----------   ----------
                            $   96,479   $   21,841
                            ==========   ==========

NOTE 12 - Quarterly Results of Operations (Unaudited)

     Below is a summary of the quarterly  results of operations for each quarter
of 1998 and 1997:
<TABLE>
<CAPTION>

1998                                     First         Second          Third         Fourth
<S>                                  <C>            <C>            <C>            <C>        

Revenue ..........................   $   208,435    $   294,144    $   493,342    $   424,950
Gross profit .....................       186,661        257,167        431,912        391,242
                                         -------        -------        -------        -------
                                                                                      
Net income (loss) ................   $  (233,603)   $  (484,459)   $   (31,768)   $  (196,032)
                                         =======       ========       ========       ======== 
Net income (loss) per common share   $      (.26)   $      (.47)   $      (.03)   $      (.09)
                                            ====           ====           ====           ==== 

1997                                   
Revenue ..........................   $   496,089    $   302,493    $   311,654    $   276,430
Gross profit .....................       319,124        178,379        138,464        144,659
                                         -------        -------        -------        -------
Net income (loss) ................   $   (99,180)   $  (265,497)   $  (372,726)   $  (384,401)        
                                         =======         ======        =======       ========         
                                                                                     
Net income (loss) per common share   $     (0.30)   $     (0.65)   $     (0.78)   $     (0.58)
                                           =====          =====          =====          ===== 
</TABLE>

NOTE 13 - Subsequent Events
    
     From  January 1, 1999 to March 16,  1999,  the  Company  sold  $100,000  of
convertible  debentures  which were converted to 133,333 shares of the Company's
common stock.
     
     On March 16, 1999,  the Company  made a  selftender  for all of the 233,900
oustanding  shares  of  the  Company's  12%  Non-voting  Convertible  Redeemable
Preferred Stock (see Note 6).

                                      F-17
<PAGE>








                                   SIGNATURES

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


Date: March 31, 1999                        JUNIPER GROUP, INC.


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


     In accordance  with the  Securities  Exchange Act of 1934,  this report has
been signed below by the following  persons on behalf of the  Registrant  and in
the capacities and on the dates indicated.


Signatures                             Titles                       Date


By:/s/ Vlado Paul Hreljanovic      Chairman of the Board,
   --------------------------      President, Chief Executive
   Vlado Paul Hreljanovic          Officer (Principal Executive
                                   and Financial Officer)       March 31, 1999


By: /s/ Harold A. Horowitz          Director                    March 31, 1999
   -----------------------        
   Harold A. Horowitz       


By:/s/Peter W. Feldman              Director                    March 31, 1999
   ------------------- 
   Peter W. Feldman


<PAGE>




                                EXHIBIT INDEX



Exhibit                            Description

10.1 Admendment  to  Employment  Agreement  between the  Registrant  and V. Paul
     Hreljanovic, dated February 11, 1998.

10.3 Consulting Agreement between Juniper Medical Systems, Inc. and Jeffrey Mann
     dated June 6, 1998.
     
10.4 Consulting  Agreement  between  Registrant and Global Financial Group, Inc.
     dated November 24, 1998.

10.5 Employment  Agreement between PCI, Inc. and Richard O. Vazquez,  dated June
     7, 1996 (3)

10.6 Agreement  between  PartnerCare,  Inc.and Synergy  Business  Services dated
     December 7, 1997

21.1  Susidiaries

23.1  Consent of Independent Certified Public Accountants

27.1  Financial Data Schedule