<PAGE>
<PAGE>
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

       FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark one)

[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 [FEE REQUIRED]

                     FOR THE FISCAL YEAR ENDED JUNE 30, 1996

                                       or

[  ]    TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
        EXCHANGE ACT OF 1934 [NO FEE  REQUIRED] 

            FOR THE TRANSITION PERIOD FROM __________ TO ___________

                         COMMISSION FILE NUMBER 0-14328

                             ZING TECHNOLOGIES, INC.
        (Exact name of small business issuer as specified in its charter)

<TABLE>
<S>                                                                 <C>


                       New York                                                13-2650621
--------------------------------------------------------------     ------------------------------------
(State or other jurisdiction of incorporation or organization)     (I.R.S. employer identification no.)

           115 Stevens Avenue, Valhalla, NY                                        10595
-----------------------------------------------------------------   ------------------------------------
       (Address of principal executive offices)                                  (Zip Code)

</TABLE>


Registrant's telephone number, including area code (914) 747-7474

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

<TABLE>
<CAPTION>
                                                                            Name of each exchange
                    Title of each class                                      on which registered
                    -------------------                              -------------------------------------

<S>                                                                  <C>
                Common Stock, $.01 Par Value
                ----------------------------                         -------------------------------------

</TABLE>

Securities registered pursuant to Section 12(g) of the Act: None.

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

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant,  computed by  reference to the average of bid and asked price of the
stock as of September 25, 1996 was $10,760,081.

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-B is not contained  herein,  and will not 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. _

State issuer's revenues for its most recent fiscal year. $26,049,000

The  number of  shares  of  common  stock,  $.01 par  value,  outstanding  as of
September 25, 1996 was 2,494,199.

Transitional small business disclosure format Yes ____ No _X_

                   DOCUMENTS INCORPORATED BY REFERENCE: NONE

                     Page 1 of 35, Exhibit Index on Page 32

<PAGE>
<PAGE>


                               TABLE OF CONTENTS

PART I

Item 1   -   Business..........................................................3

Item 2   -   Properties........................................................8

Item 3   -   Legal Proceedings.................................................8

Item 4   -   Submission of Matters to a Vote of Security Holders...............9


PART II

Item 5   -   Market for Registrant's Common Stock and Related Matters..........9

Item 6   -   Management's Discussion and Analysis of Financial Condition and
             Results of Operations ...........................................10

Item 7   -   Financial Statements and Supplementary Data .....................15

Item 8   -   Changes in and Disagreements with Accountants
             on Accounting and Financial Disclosure...........................32

PART III

Items

9-12     -   Directors and Executive Officers of the Registrant;
             Executive Compensation; Security Ownership of Certain
             Beneficial Owners and Management; Certain Relationships
             and Related Transactions.........................................32


Item 13  -   Exhibits and Reports on Form 8-K.................................32

                                       2

<PAGE>
<PAGE>

PART I

ITEM 1.      BUSINESS

GENERAL

Zing Technologies,  Inc. ("Zing" or the "Company") is a holding company with one
material  98%  owned  operating  subsidiary,   Omnirel  Corporation  ("Omnirel")
(approximately 84% owned by Zing on a fully diluted basis), and one non-material
90% owned operating  subsidiary,  Transition  Analysis of Component  Technology,
Inc. ("TACTech"). Zing was incorporated in New York on October 17, 1969.

Since June 26, 1991, when the Company acquired Omnirel,  the Company has engaged
in the manufacture and sale of high reliability multi-chip power semiconductors,
integrated  power  modules and packaged  semiconductor  components  in its niche
market and has  expanded  its  distribution  into the  high-end  commercial  and
industrial market.

High reliability  multi-chip power  semiconductors  and integrated power modules
are defined as electronic components and are single-package devices with a power
dissipation  of five watts or more.  They  combine  active  power  semiconductor
components and passive  components (such as capacitors and resistors) which form
integrated  intelligent  power  electronic  circuits  which  control,  drive and
regulate the input and output of power (electricity) in motion control and power
supply  applications  for  use in  electronic  systems  and  equipment.  Omnirel
manufacturing  techniques  and  design  standards  for  the  military  and  high
reliability industrial markets are more exacting than is the case for commercial
general purpose hybrid circuit components.  The products manufactured by Omnirel
include custom designed products as well as standard commodity products.

Omnirel  produces both standard and custom products in a clean room  environment
and is certified to MIL-STD 1772,  the highest  level of military  certification
for a hybrid  circuit  manufacturer,  and is registered  to ISO 9001.  Omnirel's
products are used where circuit density (including miniaturization),  electrical
performance and reliability  are critical  design  requirements,  such as in the
defense,  aerospace,  commercial  transportation  and medical device industries.
Omnirel's  products are also used in the  production of industrial  controls and
power supplies where these same criteria are needed.

TACTech   licenses   proprietary   computer   software   databases  to  military
semiconductor manufacturers,  the Department of Defense and defense contractors.
The databases  provide the end users with information  useful in determining the
projected life cycle (obsolescence) of microcircuits and discrete  semiconductor
devices used primarily in the  manufacture of systems for military and aerospace
applications.  TACTech  software  also  contains a  description  and the general
specification of each microcircuit and discrete  semiconductor  device,  thereby
allowing the user to identify functionally  interchangeable devices from various
manufacturers  and to upgrade and rank the devices  according  to life cycle and
availability  based on sources of supply.  The  TACTech  database is believed to
include  virtually  all standard  microcircuits  and discrete  devices with high
reliability specifications used primarily for military or aerospace application.
The  database  is  constantly  updated  and  delivered  on a  real-time  or near
real-time  basis.  The operations of TACTech  represent  approximately 6% of the
Company's net sales.

                                       3
<PAGE>
<PAGE>


Until May 19, 1993, Zing was principally engaged in the business of distributing
high  reliability  electronic  semiconductor  components  used in  military  and
aerospace  equipment  and  providing  value-added  services  under the name Zeus
Components,  Inc.  Prior  to May 19,  1993,  Zing/Zeus  was  one of the  largest
distributors  in this  niche  market,  representing  over  thirty  semiconductor
manufacturers,  with a product  line which  consisted  of  integrated  circuits,
discrete  semiconductors and passive  components.  Integrated circuits generally
are sold at higher  unit prices and at a higher  unit gross  profit  margin than
discrete semiconductors.  Passive components generally consist of capacitors and
resistors.

On May 19,  1993,  Zing sold the net assets of its high  reliability  electronic
component  distribution and value added service businesses to Arrow Electronics,
Inc. (the "Arrow  Sale").  Arrow  (NYSE-ARW) is the world's  largest  electronic
components  distributor.  The purchase  price was  $21,254,000,  representing  a
premium  of  approximately  $3,000,000  over  the net book  value of the  assets
transferred.  In accordance with the terms of the original sales  agreement,  in
June 1996, Zing received an additional  $2,000,000 from Arrow  Electronics based
on the  performance  of  Arrow's  high  reliability  electronic  components  and
value-added business.

COMPETITION

The  market  for high  reliability  power  semiconductor  multi-chip  modules is
fragmented.  There is no single firm which maintains a dominant position, either
in technology or in market share.  Based on various industry  publications,  the
resale market for Omnirel's product was  approximately  $300,000,000 in 1995 and
is expected to grow at a rate between 8% and 10% through the 1990's.  The market
for power hybrid products which Omnirel addresses is in excess of $125,000,000 a
year  and  approximately  65% of the  sales  to  such  market  are  made by five
manufacturers  (including  Omnirel) of power hybrid  components.  Omnirel is the
only  such  manufacturer  whose  primary  focus  is on  high  reliability  power
semiconductor multi-chip modules. The principal competitors of Omnirel are other
hybrid manufacturers,  original equipment manufacturers with internal capability
and  power  semiconductor  manufacturers  who  offer  multi-chip  modules  as  a
complementary  product line.  Omnirel  distinguishes  itself in the  marketplace
principally on the strength of its focus on power applications.  It has complete
design,  manufacturing and high reliability screening capabilities in-house, and
has developed a reputation  for  innovative  solutions for customer  needs.  The
Company also competes on the basis of pricing and delivery.

MARKETING AND SALES

Omnirel markets its products  through four regional sales managers in the United
States and twenty-three sales representative  organizations world-wide.  Omnirel
sells both standard and custom products to approximately  two hundred  customers
world-wide. Standard products are sold both through distributors and directly to
customers. Custom products are sold directly to customers.

                                       4

<PAGE>
<PAGE>


Omnirel  publishes and  distributes to its existing  customers and potential new
customers a catalogue of its standard  products.  Omnirel management has focused
its  marketing  effort in the United  States  where  sixteen  independent  sales
representatives are coordinated by Omnirel's sales management.  Key accounts are
also    covered   by   area    managers    in   each   sales    region.    Seven
representatives/distributors   are  currently  in  place  in  Europe   marketing
Omnirel's products.

Omnirel's  customers  are  primarily  major  electronic  equipment  and  systems
manufacturers   such  as  General  Electric,   Loral,   Allied  Signal,   United
Technologies, Hughes Aircraft, Boeing, Texas Instruments, Raytheon and Motorola.
Sales of various products to General Electric  representing  multiple industrial
and  military/aerospace  programs at four separate  locations  aggregated 58% of
Omnirel's  sales  revenues  for  fiscal  year  1996 of  which a  single  project
accounted for  approximately  57% of 1996 sales.  Revenues from General Electric
are expected to decline significantly over the next several years. The amount of
the  decline  will be  dependent  upon  factors  such as the  level  of  General
Electric's own business, whether and to what extent Omnirel continues as General
Electric's  supplier and whether  Omnirel can produce the  products  required by
General Electric based upon changing technology.  Arrow Electronics is Omnirel's
exclusive  distributor  in the  Continental  United  States  of its  single  and
multi-chip semiconductor devices for a period ending December 31, 1996.

Omnirel's  customers  outside  the United  States and export  sales  outside the
United States are as follows:

<TABLE>
<CAPTION>
 


                                                    (000's omitted)
                                               1996        1995       1994
                                               ----        ----       ----

<S>                                           <C>        <C>        <C>

Canada                                          $230       $ 67        $ 89

Europe                                           258        172         183

Mid East (Israel)                                172         99          30

Far East (Japan)                                   7         12           5

South Pacific (Australia)                          -         12         151
                                             ---------- ----------- ----------

Total                                           $667       $362        $458
                                             ========== =========== ==========

</TABLE>


Omnirel's backlog on June 30, 1996 was $9,335,000,  of which $156,000 is related
to General Electric.  This compares to a backlog of $15,900,000 on June 30, 1995
of  which  $9,100,000  was  accounted  for by  General  Electric.  In  addition,
Omnirel's backlog  attributable to non-General  Electric business increased from
approximately  $6,800,000 at June 30, 1995 to  approximately  $9,200,000 at June
30,  1996.  Approximately  90% of  the  current  backlog  is  anticipated  to be
delivered over the next twelve month period.

For the  fiscal  years  1996,  1995,  and 1994  Omnirel  did not enter  into any
contracts with either customers of the United States Government or any agency of
the United States  Government.  Omnirel sells its products to  subcontractors of
certain  government  agencies through customer purchase orders.  Cancellation of
purchase  orders from time to time is customary  in the power  hybrid  component
industry.  Under  standard  industry  practices,  in the event of  cancellation,
Omnirel is entitled to reimbursement  of costs incurred and a reasonable  profit
for work performed prior to the cancellation.

                                       5

<PAGE>
<PAGE>


The sale of Omnirel  products is not seasonal.  However,  the timing of sales to
Omnirel's  principal  customer  was  concentrated  predominantly  in  the  first
quarter, and to a lesser extent, the second quarter of fiscal 1996.

SUPPLIER AND MATERIALS USED

Unpackaged semiconductors, in chip form, and other components such as capacitors
and resistor chips or surface mount devices, metal, plastic packages and ceramic
materials  are  used  by  Omnirel  in the  manufacture  of its  products.  These
materials  and  components,  none of which are  presently in short  supply,  are
purchased  from time to time on the open  market,  and  Omnirel has no long term
commitments for their purchase. Omnirel is not dependent on any one supplier for
a  primary   material.   Omnirel  has  agreements   with  a  number  of  premier
semiconductor  manufacturers  which allow Omnirel to buy products  directly from
such   manufacturers.   These   agreements  allow  Omnirel  to  be  apprised  of
technological advances and developments.

PRODUCT WARRANTY

Omnirel warrants that its products are free from defects in workmanship and meet
the agreed upon  specifications  supplied by the customer or  Omnirel's  current
published specifications.  Omnirel's liability for defective products is limited
solely to replacement thereof upon receipt from the customer of notice of breach
of warranty  within periods  varying between three (3) and twelve (12) months of
the  date of  shipment,  depending  upon  the  product.  Omnirel  disclaims  any
liability  for a customer's  cost of  replacement  of defective  products,  lost
profits,  loss of use and  consequential  damages.  Omnirel also  disclaims  any
warranty of merchantability and all other warranties, expressed or implied.

PATENTS, TRADEMARKS AND LICENSES

Omnirel does not possess any patents for  proprietary  manufacturing  processes.
Omnirel  believes,   however,   that  its  proprietary   processes  and  product
technologies  are such that they give it a unique  position  in the  design  and
manufacture  of  power  semiconductor   modules  and  multi-chip  modules  using
semiconductor  assembly  technology.  The  Omnirel  name  and  logo  are  unique
trademarks.  While Omnirel  considers  that in the aggregate its  trademarks are
important in its operation, it does not consider that the trademarks are of such
importance  that  termination  could  materially  affect its  business.  TACTech
maintains copyright  protection for its computer software and claims proprietary
trade secret protection through customer licensing agreements.

INVENTORY

Omnirel  follows  industry  standards  for  procurement,  sale and return of its
inventory. Materials are procured based upon purchase orders which have standard
terms and  conditions  including  the right of return  for  inferior  quality or
non-compliance with purchase order terms. Omnirel inventory is maintained at its
principal place of business in storage  facilities with temperature and humidity
controls. Omnirel stocks inventory for standard products, and for certain of its
custom products.

                                       6
<PAGE>
<PAGE>


ENVIRONMENTAL COMPLIANCE

Omnirel does not use hazardous  materials in its manufacturing  process nor does
the  manufacturing  process  result in the  discharge of  potentially  hazardous
material.  Omnirel does not expect to incur significant expenditures relating to
environmental compliance.

RESEARCH AND DEVELOPMENT

Generally,  Omnirel's research and development  expenditures involve engineering
and design of custom  products for  specific  applications,  development  of new
packaging techniques and development of packaging for new semiconductor devices.
Research and development  expenditures for the fiscal years ended June 30, 1996,
June 30,  1995 and June 30,  1994  were  $1,361,000,  $1,055,000  and  $841,000,
respectively or 5.2%, 4.7% and 7.3% of sales in the respective years.

EMPLOYEES

As of June 30,  1996,  Zing had 186  employees,  115 of whom  were  employed  by
Omnirel  in  a  manufacturing  capacity  and  43  in  clerical,  administrative,
engineering  or sales  positions at Omnirel.  The Company  employs six people in
executive  or  administrative  functions,  and TACTech  employs  three  computer
programmers and an additional 19 persons in clerical,  sales,  customer  support
and  administrative  roles. None of Zing's employees are covered by a collective
bargaining agreement.

As of June 30, 1996, as a result of the issuance of 151,000  options to purchase
Omnirel  common  stock,  at or above fair  market  value at the grant  date,  to
Omnirel  employees in fiscal 1995,  the Company's  ownership of Omnirel could be
reduced to approximately 84% upon the exercise of such options.  134,000 options
with an exercise  price of $8 vest over a three year  period and 17,000  options
with an exercise price of $10 vest over a five year period. During 1996, Omnirel
granted an additional  10,000  options with an exercise price of $10. As of June
30, 1996, 44,667 $8 options and 3,400 $10 options were exercisable.

                                       7

<PAGE>
<PAGE>


ITEM 2.

PROPERTIES

The  Company  leases  750 square  feet at a modern  office  building  located in
Valhalla,  New York, where it maintains its executive offices.  The Company pays
an annual  rent of $15,000 for the  Valhalla  space.  The lease term  expires on
October 31, 1996. The lease provides for two  consecutive one year extensions at
the Company's  option.  The Company intends to exercise its option to extend the
lease until  October 31, 1997 at the same annual rent of $15,000 per annum.  The
Company uses all of the leased space.

Omnirel  owns a 6.5 acre parcel of land with a 38,000  square  foot,  one story,
modern facility located in Leominster, Massachusetts, where Omnirel manufactures
its products in a clean-room  environment.  Omnirel's processes are certified to
MIL-STD 1772 and registered to ISO 9001. Approximately 12,000 square feet of the
Company's  facility  is  rated  and  certified  as  a  class  10,000  clean-room
environment.  This location  houses all of the operations of Omnirel.  The clean
room  facility is  equipped  with  design,  manufacturing,  electrical  test and
environment screen equipment which are state-of-the-art. Omnirel utilizes all of
its available space within the facility.

In  April  1996,  Omnirel  began  expansion  on its  Leominster  facility.  This
expansion is expected to be complete in October 1996,  adding 10,000 square feet
of manufacturing space.

TACTech is currently  leasing a facility in Yorba Linda,  California  from Arrow
Electronics  on  a  month-to-month   basis  at  a  cost  of  $3,500  per  month.
Approximately 40% of TACTech's facility is in productive use.

The  Company  does not  currently  have a formal  policy  in place  specifically
addressing investments in real estate and real estate related products.  Current
investments  do not include real estate or real estate  related  products  other
than real property  discussed  above.  The Company has a policy of investing its
liquid assets in equity securities  primarily tradable on the New York and other
major stock  exchanges.  The  Company's  policy is to invest in companies  whose
securities have a significant  public float providing  liquidity in the event of
sale. The investment  portfolio at June 30, 1996 consists primarily of preferred
stock.

The Company's investing  activities have been limited by resolution of the Board
of Directors.  The Company's  Board directed that the Company cannot invest more
than 25% of its invested  capital in common stocks,  and cannot invest in common
stocks  issued  by  companies  other  than  companies  engaged  in the  field of
electronic  equipment   manufacturing  and/or  semiconductor   manufacturing  or
distribution.  The Board  authorized the Company to maintain a margin account to
provide the Company with  additional  funds used to  facilitate  the purchase of
preferred stocks. The Board  authorization  additionally  provides that dividend
returns on the preferred stock so purchased must exceed the interest  expense on
the debt  incurred to purchase the  securities.  The Company also engaged in one
short sale against the box in fiscal 1996 in order to lock in a significant gain
and defer a tax liability on a security until the Company closed the short sale.
Subject to the  limitations  imposed by the Board of Directors,  the Company can
alter its  investment  policies  and  investment  portfolio  at any time without
shareholder consent.

                                       8
<PAGE>
<PAGE>


ITEM 3.

LEGAL PROCEEDINGS

None.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II

ITEM 5.

MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

The Common Stock of the Company is traded on the National Market System (NMS) of
NASDAQ,  under the symbol ZING. The following  table sets forth the high and low
closing  prices  of the  Company's  Common  Stock on the NMS for each  quarterly
period during the last two years.

<TABLE>
<CAPTION>
                                                  HIGH       LOW
                                               ---------------------

<S>                                             <C>        <C>
Fiscal Year Ended June 30, 1995
  First Quarter                                   2 1/2      1 7/8
  Second Quarter                                  6 3/4      2 1/16
  Third Quarter                                  10 1/4      4 5/8
  Fourth Quarter                                 12 7/8      6 5/8

Fiscal Year Ended June 30, 1996
  First Quarter                                  24 3/4     12 1/8
  Second Quarter                                 20 1/2      9 3/4
  Third Quarter                                  13          7 7/8
  Fourth Quarter                                 14          9 1/4

Fiscal Year Ended June 30, 1997
  First Quarter                                  10 3/4      9 1/8

</TABLE>


There  were  2,494,199  shares  of Common  Stock  outstanding  and 81 holders of
record,  and at least 1,232 beneficial  owners of the shares as of September 25,
1996.

No cash  dividends  have been paid on the Company's  Common Stock for the fiscal
years  ended June 30,  1996 and 1995.  The  present  policy of the Company is to
retain  earnings  to  provide  funds for the  operations  and  expansion  of its
business.


                                       9
<PAGE>
<PAGE>


ITEM 6.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS


<TABLE>
<CAPTION>

                                      YEAR ENDED     NINE MONTHS
                                     SEPTEMBER 30,  ENDED JUNE 30,          YEAR ENDED JUNE 30
                                          1992        1993 (6)        1994         1995         1996
                                     -------------- ------------- ------------ ------------ ------------
                                                   (000's omitted, except per share data)

<S>                                  <C>             <C>           <C>          <C>          <C>

OPERATING DATA
  Net sales                            $91,698         $52,602      $11,483      $22,591      $26,049
  Cost of goods sold                    70,439          40,624        6,637       13,073       14,272
                                     -------------- ------------- ------------ ------------ ------------
  Gross profit                          21,259          11,978        4,846        9,518       11,777
  Selling, general and
    administrative expenses (1)         21,238          13,967        5,255        7,579        7,791
  Interest expense (2)                   2,397           1,443          286          148          287
  Interest and other income - net 
    (3)                                      -               -         (860)      (1,051)      (3,100)
  Minority interest in income of
    consolidated subsidiary                  -               -            -            -           41
                                     -------------- ------------- ------------ ------------ ------------
  Income (loss) before income taxes
    and extraordinary item              (2,376)         (3,432)         165        2,842        6,758
  Provision (credit) for income 
    taxes                                 (215)             36            3          325        2,345
                                     -------------- ------------- ------------ ------------ ------------
  Income (loss) before                  
    extraordinary item                  (2,161)         (3,468)         162        2,517        4,413
  Extraordinary item (4)                    29            (155)          53            -            -
                                     -------------- ------------- ------------ ------------ ------------
Net income (loss)                      $(2,132)        $(3,623)     $   215      $ 2,517      $ 4,413
                                     ============== ============= ============ ============ ============

PER SHARE DATA (5)
  Income (loss) before               
    extraordinary item                  $  (.80)       $ (1.25)     $   .06      $   .94       $  1.68
  Extraordinary item                        .01           (.06)         .02         -             -
                                     -------------- ------------- ------------ ------------ ------------
Net income (loss)                       $  (.79)       $ (1.31)     $   .08      $   .94       $  1.68
                                     ============== ============= ============ ============ ============

Weighted average shares outstanding   2,696,000      2,774,000    2,747,000    2,671,000     2,629,000

</TABLE>


<TABLE>
<CAPTION>


                                       YEAR ENDED
                                      SEPTEMBER 30,                   YEAR ENDED JUNE 30
                                          1992          1993          1994         1995         1996
                                     -------------- ------------- ------------ ------------ ------------

<S>                                   <C>             <C>           <C>         <C>            <C>  
BALANCE SHEET DATA
  Working capital                      $18,541         $ 6,228      $ 3,878      $ 6,218      $14,798
  Total assets                          43,710          32,264       18,360       22,185       35,251
  Long-term obligations                 14,431               -          626          741        1,445
  Stockholders' equity                  16,168          12,540       12,424       15,129       19,722

</TABLE>

(1)   Includes provision for doubtful accounts, depreciation and amortization of
      property and equipment.

(2)   Includes  amortization  of deferred  note issuance  costs (1992,  1993 and
      1994).

(3)   Includes interest income,  dividend income, realized and unrealized losses
      on marketable  securities and  amortization of the  non-compete  agreement
      and, in 1996,  $2,000,000 from Arrow Electronics as an additional purchase
      price  realized  from the sale of its  electronic  component  distribution
      assets in May, 1993.

(4)   A gain (loss) from the extinguishment of debt, net of income taxes.

(5)   Per share data represents  income (loss) per common and common  equivalent
      share.  See Note A to  Consolidated  Financial  Statements  for additional
      information regarding per share data.

(6)   During 1993 the Company  changed its year end from September 30 to June 30
      and  sold the net  assets  of its high  reliability  electronic  component
      distribution business to Arrow Electronics, Inc.


                                       10

<PAGE>
<PAGE>


The  following  table  sets  forth  for  the  period  indicated  the  percentage
relationship  to net sales of  certain  items  from the  Company's  consolidated
statements of operations.

<TABLE>
<CAPTION>
                                                               YEAR ENDED JUNE 30
                                                        1996          1995           1994
                                                    ------------- -------------- -------------

<S>                                                   <C>            <C>            <C> 
Net sales                                               100.0%        100.0%         100.0%
Cost of goods sold                                       54.8          57.9           57.8
                                                    ------------- -------------- -------------
Gross profit                                             45.2          42.1           42.2
Selling, general and administrative expenses             27.8          28.1           38.9
Depreciation and amortization of property, plant
  and equipment                                           2.1           5.5            6.9
Interest expense and amortization of deferred
  note issuance costs                                     1.1            .6            2.5
Interest and other income, net                          (11.9)         (4.7)          (7.5)
Minority interest in income of consolidated
  subsidiary                                               .2           -              -
                                                    ------------- -------------- -------------
Income before income taxes and extraordinary item        25.9          12.6            1.4
Provision for income taxes                                9.0           1.4            -
                                                    ------------- -------------- -------------
Income before extraordinary item                         16.9          11.2            1.4
Extraordinary item                                        -             -               .5
                                                    ------------- -------------- -------------
Net income                                               16.9%         11.2%           1.9%
                                                    ============= ============== =============

</TABLE>

RESULTS OF OPERATIONS - FISCAL 1996 COMPARED TO FISCAL 1995

The Company  reported net income of $4,413,000 or $1.68 per share for the fiscal
year ended June 30,  1996 as compared  to net income of  $2,517,000  or $.94 per
share for the fiscal  year ended June 30,  1995.  This  significant  increase is
principally  attributable  to the  following  factors:  the  realization  by the
Company of an additional  $2,000,000 from the sale of the net assets of its high
reliability  electronic  semiconductor  component  distribution  and value-added
services  business to Arrow  Electronics  in May 1993 (the "Arrow Sale") and the
increased profitability of its material subsidiary, Omnirel Corporation.

Consolidated net sales increased to $26,049,000. This represented an increase of
$3,458,000  over the prior  comparable  period.  Omnirel's net sales in the 1996
fiscal year  accounted for 94% of  consolidated  net sales as compared to 95% of
consolidated  net sales in the 1995 fiscal year. The balance of consolidated net
sales in each period is attributable to the operations of the Company's  TACTech
subsidiary.

Net sales from the Company's Omnirel subsidiary  increased  $3,065,000 (14%) for
the fiscal year ended June 30, 1996 thereby  accounting  for 89% of the increase
in the Company's consolidated revenues over the prior comparable period.

Of the growth in Omnirel's net sales, 25% was attributable to an order placed by
General  Electric for multi-chip  power module systems  containing  power hybrid
components.  These orders  accounted for 57% of Omnirel's 1996 fiscal year sales
compared to 63% for the comparable prior period.



                                       11


<PAGE>
<PAGE>

Net sales in  TACTech  increased  approximately  32% in the fiscal  1996  period
compared to the 1995 period due  principally to a 22% increase in the subscriber
base.

Consolidated  gross  profit  for  the  fiscal  year  ended  June  30,  1996  was
$11,777,000 as compared to $9,518,000  for the  comparable  prior fiscal period.
Omnirel's  cost of goods  sold  decreased  approximately  2.7%  (expressed  as a
percentage of Omnirel's net sales) resulting from lower material and labor costs
due primarily to improvements in yield and component purchase costs.

Selling,  general and administrative  expenses during fiscal year 1996 increased
approximately  $892,000  over the prior year.  This  increase was  substantially
attributable  to costs  incurred for research and  development at Omnirel in the
amount of $300,000. In addition,  TACTech incurred new product costs of $100,000
in 1996.

The Company  experienced a decrease in depreciation and amortization  expense in
the amount of $680,000 during the fiscal year ended June 30, 1996 as compared to
the prior comparable period. During the fiscal year ended June 30, 1995, Omnirel
changed the  estimated  useful lives of certain  machinery  and equipment due to
Omnirel's  accelerated and additional use of such machinery and equipment.  As a
result of the  aforementioned  change and prior year charge of $386,000  and the
fact that various  machinery and equipment became fully  depreciated,  Omnirel's
depreciation decreased approximately $710,000 during the 1996 fiscal year.

Interest  expense of the Company  increased  approximately  $139,000  during the
fiscal year ended June 30, 1996 as  compared to the prior  comparable  reporting
period. Of this increase,  approximately  $90,000 related to additional  Omnirel
indebtedness  during the 1996 fiscal  year,  primarily  for the  acquisition  of
building and capital equipment.

Interest and other income  increased by $2,049,000  during the fiscal year ended
June 30, 1996 as compared to the fiscal year ended June 30, 1995.  This increase
was primarily  attributable to the realization  during the fourth quarter of the
1996  fiscal year of the  additional  $2,000,000  received  from the Arrow Sale.
Included in interest and other income is dividend income aggregating $956,000 in
fiscal  1996 and  $421,000  in  fiscal  1995.  In  addition,  net  realized  and
unrealized losses on marketable  securities  aggregated  $578,000 in fiscal 1996
and net realized and unrealized gains aggregated $27,000 in fiscal 1995.

Provision for income taxes in fiscal 1996 amounted to  $2,345,000,  representing
an effective tax rate of 34.7%. The 1996 income tax provision was reduced by the
release of $173,000 of valuation allowances related to net operating losses. The
provision  in fiscal 1995 was $325,000  (or an 11.4%  effective  tax rate) after
giving effect to the Company's utilization of $3,000,000 of net operating losses
and the related release of valuation allowances previously  established for such
losses.

RESULTS OF OPERATIONS  FISCAL 1995 COMPARED TO FISCAL 1994

The Company  reported income of $2,517,000 or $.94 per share for the fiscal year
ended June 30, 1995 as compared to income before extraordinary items of $162,000
or $.06 per share for the fiscal  year ended June 30,  1994.  This  increase  is
principally a reflection of the increased  profitability  of the business of its
one material subsidiary, Omnirel.

                                       12
<PAGE>
<PAGE>


Consolidated  net sales  increased to  $22,591,000  during the fiscal year ended
June 30, 1995 from $11,483,000 for the comparable period. Omnirel's net sales in
the 1995 fiscal year accounted for 95% of consolidated  net sales as compared to
92%  of  consolidated  net  sales  in the  1994  fiscal  year.  The  balance  of
consolidated  net  sales in each  period is  attributable  to  operation  of the
Company's TACTech subsidiary.

Net sales from the Company's  Omnirel  subsidiary  increased 102% for the fiscal
year ended June 30, 1995  thereby  accounting  for the  significant  increase in
consolidated revenues for the reporting period.

The growth in  Omnirel's  net sales was largely as a result of an ongoing  order
placed by General Electric for multi-chip power module systems  containing power
hybrid components. These orders accounted for 63% of Omnirel's fiscal 1995 sales
compared to 16% for the comparable period.

Net sales in  TACTech  increased  approximately  37% in the fiscal  1995  period
compared to the 1994  period due  principally  to an increase in the  subscriber
base and a United States Department of Defense contract.

Consolidated gross profit for the fiscal year ended June 30, 1995 was $9,518,000
as compared to $4,846,000  for the comparable  fiscal period.  Omnirel's cost of
goods sold increased  comparably to net sales and remained  essentially constant
as  a  percentage  of  net  sales  as  the  increased  efficiency  in  usage  of
manufacturing  facilities  offset an increase in material  costs and  applicable
reserves.

As a result of the increase in revenues,  selling and general and administrative
expenses  decreased to 28.1% of revenues for the fiscal year ended June 30, 1995
compared to 38.9% for the comparable  period. The 28.1% ratio was achieved after
$391,500 of expenses  were incurred in the third quarter of the 1995 fiscal year
relating to the abandonment of a proposed  restructuring of the Company in which
stock of TACTech and Omnirel would have been  distributed to shareholders of the
Company.

The Company also recorded an increase in depreciation and  amortization  expense
in the amount of $386,000  due to a change in  estimate  of the useful  lives of
certain  machinery and equipment  owned by Omnirel due to Omnirel's  accelerated
and additional use of its machinery and equipment in manufacturing.

Interest  expense  declined  approximately  50%  during  the  fiscal  year  1995
principally  due  to the  Company's  retirement  in  1994  of all of its  Senior
Subordinated  Notes,  partially offset by an increase in interest charges during
the 1995 fiscal year related to other borrowings of the Company and Omnirel.

Interest and other  income  increased  approximately  25% during the 1995 fiscal
year  principally  due to  interest  and  dividend  income and the fact that net
realized and  unrealized  gain on marketable  securities  amounted to $27,000 in
fiscal 1995 as  compared to net  realized  and  unrealized  losses of $74,000 in
marketable securities for fiscal 1994.


                                       13

<PAGE>
<PAGE>

Provision  for income  taxes in fiscal 1995 in the amount of $325,000  was after
giving  effect to the Company's  utilization  of $3,000,000 of the Company's net
operating  losses and the related  release of  valuation  allowances  previously
established  for such  losses.  In fiscal  1994,  the Company  adopted FASB 109,
"Accounting  for Income  Taxes."  Pursuant to FASB 109,  the Company  recorded a
deferred tax asset, a deferred tax liability and a valuation  allowance  account
which  resulted in the provision for income taxes in fiscal 1994 in an amount of
only $3,000. See Note F of the Consolidation Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

In  fiscal  1996  and  1995,  the  Company  employed  most of its  cash and cash
equivalents in the acquisition of marketable securities. Omnirel's operations in
fiscal 1996 and 1995 were funded from  internally  generated  cash and available
bank lines of credit.  During the 1996 fiscal year, Omnirel repaid its remaining
intercompany debt to the Company of approximately $3,600,000.

IMPACT OF INFLATION

Inflation did not have  significant  impact on the operations of the Company for
all periods presented.


                                       14

<PAGE>
<PAGE>


ITEM 7.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                         Report of Independent Auditors

Shareholders and Board of Directors
Zing Technologies, Inc. and Subsidiaries
Valhalla, New York

We  have  audited  the   accompanying   consolidated   balance  sheets  of  Zing
Technologies,  Inc.  and  subsidiaries  as of June 30,  1996 and  1995,  and the
related consolidated  statements of income,  stockholders' equity and cash flows
for each of the three years in the period ended June 30,  1996.  Our audits also
included the  financial  statement  schedule  listed in the index at Item 14(a).
These financial  statements and schedule are the responsibility of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and schedule 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 financial  statements  referred to above present fairly, in
all material respects, the consolidated financial position of Zing Technologies,
Inc. and subsidiaries at June 30, 1996 and 1995, and the consolidated results of
their  operations and their cash flows for each of the three years in the period
ended  June  30,  1996,  in  conformity  with  generally   accepted   accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly, in all material respects, the information set forth therein.

                                                          ERNST & YOUNG LLP

September 17, 1996
White Plains, NY



                                       15
<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

                           Consolidated Balance Sheets


<TABLE>
<CAPTION>

                                                                          JUNE 30
                                                                 1995             1996
                                                             ----------------------------------
                                                                      (000's omitted)

<S>                                                               <C>            <C>
ASSETS
Current assets:

   Cash and cash equivalents                                      $ 1,366        $     727
   Marketable securities (Note H)                                   1,489           19,927
   Accounts receivable, less allowances of
      $66 and $135, respectively                                    3,533            2,352
   Inventories (Note C)                                             3,817            4,290
   Prepaid expenses                                                   248              145
   Other current assets                                               380              341
                                                             ----------------------------------
Total current assets                                               10,833           27,782


Property, plant and equipment (Note D)                              9,028           10,002
Less: accumulated depreciation and amortization                     4,427            5,181
                                                             ----------------------------------
                                                                    4,601            4,821


Marketable securities - non-current (Note H)                        3,787                -
Deferred income taxes, net of valuation allowance (Note F)          1,284            1,095

Excess of cost over assets acquired, net of accumulated
   amortization of $868 and $1,021, respectively                    1,668            1,515
Other assets                                                           12               38
                                                             ----------------------------------
Total assets                                                      $22,185          $35,251
                                                             ==================================

</TABLE>


See notes to consolidated financial statements.


                                       16

<PAGE>
<PAGE>




<TABLE>
<CAPTION>
                                                                          JUNE 30
                                                                   1995             1996
                                                             ----------------------------------
                                                                      (000's omitted)
<S>                                                               <C>             <C>
LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:

   Accounts payable                                               $ 2,035         $  1,495
   Accrued expenses                                                 1,566            1,698
   Accrued compensation expense                                       524              666
   Loans payable bank                                                   -            5,831
   Short positions in marketable equity securities (Note H)             -            1,026
   Due to broker                                                      259            2,229
   Current portion of long-term obligations                           231               39
                                                             ----------------------------------
Total current liabilities                                           4,615           12,984

Long-term obligations, less current portion (Note E)                  741            1,445
Deferred income - non-compete agreement                             1,700            1,100

Stockholders' equity (Note G):
   Common stock (par value $.01 per share;
      authorized 12,000,000 shares; issued
      2,797,415 shares as of June 30, 1995 and issued
      2,874,117 shares as of June 30, 1996                             28               28
   Additional paid-in capital                                      13,466           13,860
   Note receivable from stockholder                                  (250)            (170)
   Net unrealized gain on marketable
      securities (Note H)                                               -              220
   Retained earnings                                                2,354            6,767

   Less treasury shares at cost (199,918 shares - 1995,
      255,018 shares - 1996)                                         (469)            (983)
                                                             ----------------------------------
                                                                   15,129           19,722
                                                             ----------------------------------
Total liabilities and stockholders' equity                        $22,185          $35,251
                                                             ==================================


</TABLE>

                                       17

<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

                        Consolidated Statements of Income


<TABLE>
<CAPTION>
                                                                YEAR ENDED JUNE 30
                                                       1994            1995          1996
                                                    -------------------------------------------
                                                      (000's omitted, except per share data)
 
<S>                                                  <C>             <C>        <C>    <C>

Net sales                                             $  11,483     $  22,591     $   26,049
Cost of goods sold                                        6,637        13,073         14,272
                                                   -------------------------------------------
Gross profit                                              4,846         9,518         11,777
Selling, general and administrative expenses              4,465         6,347          7,239
Depreciation and amortization of property,
   plant and equipment                                      790         1,232            552
Net interest expense and amortization of
   deferred note issuance costs                             286           148            287
Interest and other income - net                            (860)       (1,051)        (3,100)
Minority interest in income of
   consolidated subsidiary                                    -             -             41
                                                   -------------------------------------------
Income before income taxes and
   extraordinary item                                       165         2,842          6,758
Provision for income taxes                                    3           325          2,345
                                                   -------------------------------------------
Income before extraordinary item                            162         2,517          4,413
Extraordinary item - gain from
   extinguishment of debt                                    53             -              -
                                                   -------------------------------------------
Net income                                            $     215     $   2,517     $    4,413
                                                   ===========================================

Income per common and common equivalent share:
      Income before extraordinary item               $      .06      $    .94     $     1.68
      Extraordinary item                                    .02         -              -
                                                   -------------------------------------------
Net income                                           $      .08      $    .94     $     1.68
                                                   ===========================================
Number of shares used in computation                  2,747,000     2,671,000      2,629,000
                                                   ===========================================

</TABLE>

See notes to consolidated financial statements.

                                       18

<PAGE>
<PAGE>

                    Zing Technologies, Inc. and Subsidiaries

                 Consolidated Statements of Stockholders' Equity

                                 (000's omitted)

<TABLE>
<CAPTION>
                                                                                                             Net
                                                                                                          Unrealized
                                                                           Note                         Gain (Loss) on
                                              Common Stock   Additional Receivable  Retained               Noncurrent     Total
                                            ----------------  Paid-in      From     Earnings   Treasury   Marketable   Stockholders'
                                             Shares   Amount  Capital   Stockholder (Deficit)    Stock    Securities      Equity
                                            ---------------------------------------------------------------------------------------
<S>                                           <C>        <C>           <C>        <C>          <C>         <C>          <C>       
Balance at June 30, 1993                    2,693   $   27   $ 13,146   $   (250)  $   (378)     $ (5)                  $ 12,540
Net income                                                                              215                                  215
Net unrealized loss on noncurrent
   marketable securities                                                                                 $   (288)          (288)
Repurchase of common stock for treasury       (12)                                                 (43)                      (43)
                                           -----------------------------------------------------------------------------------------
Balance at June 30, 1994                    2,681       27     13,146       (250)      (163)       (48)      (288)        12,424
Net income                                                                            2,517                                2,517
Recognition of unrealized loss on
   noncurrent marketable securities                                                                           288             288
Repurchase of common stock for treasury      (186)                                                (421)                      (421)
Exercise of warrants                          102        1        320                                                         321
                                           -----------------------------------------------------------------------------------------
Balance at June 30, 1995                    2,597       28     13,466       (250)     2,354       (469)                    15,129
Net income                                                                            4,413                                 4,413
Net unrealized gain on noncurrent
   marketable securities                                                                                      220             220
Repurchase of common stock for treasury       (55)                                                (514)                      (514)
Repayment of note receivable                                                  80                                               80
   from stockholder
Exercise of warrants                           77                 394                                                         394
                                           -----------------------------------------------------------------------------------------
Balance at June 30, 1996                    2,619   $   28   $ 13,860   $   (170)  $  6,767   $   (983)  $    220        $ 19,722
                                           =========================================================================================

</TABLE>

See notes to consolidated financial statements.


                                       19

<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows


<TABLE>
<CAPTION>
                                                                      YEAR ENDED JUNE 30
                                                               1994          1995          1996
                                                          -------------------------------------------
                                                                       (000's omitted)
<S>                                                          <C>           <C>            <C>

OPERATING ACTIVITIES

Net income                                                    $   215       $ 2,517       $ 4,413
Adjustments to reconcile net loss to net cash
   provided by (used in) operating activities:

      Depreciation and amortization                             1,165         1,534           907
      Amortization of non-compete agreement                      (600)         (600)         (600)
      Provision for losses on accounts receivable                  66           (10)           90
      Provision for deferred income taxes                      (1,255)          (29)          189
      Extraordinary gain                                          (53)            -             -
      Changes in operating assets and liabilities:

         Accounts receivable                                   (1,043)       (1,139)        1,091
         Inventories                                             (423)       (1,426)         (473)
         Prepaid expenses and other current assets              1,177          (174)          142
         Other assets                                           1,511            73           (26)
         Accounts payable and accrued expenses                (13,814)        1,530         2,730
         Other, net                                                 -           184           291
                                                          -------------------------------------------
Net cash provided by (used in) operating activities           (13,054)        2,460         8,754

INVESTING ACTIVITIES

Purchases of property and equipment                              (381)         (850)         (974)
Net purchases of marketable securities                         (4,944)         (332)      (14,431)
                                                          -------------------------------------------
Net cash used in investing activities                          (5,325)       (1,182)      (15,405)
                                                          ===========================================
FINANCING ACTIVITIES

Proceeds from lines of credit and long-term
   borrowings including reclassification                          679           190         7,375
Reductions of lines of credit and long-term debt                    -             -        (1,032)
Exercise of stock warrants                                          -           137           103
Repayment of note receivable from stockholder                       -             -            80
Repurchase of common stock for treasury                           (43)         (421)         (514)
                                                          -------------------------------------------
Net cash provided by (used in) financing activities               636           (94)        6,012
                                                          -------------------------------------------
Net increase (decrease) in cash and cash equivalents          (17,743)        1,184          (639)

Cash and cash equivalents at beginning of year                 17,925           182         1,366
                                                          -------------------------------------------
Cash and cash equivalents at end of year                     $    182       $ 1,366       $   727
                                                          ===========================================


</TABLE>

See notes to consolidated financial statements.


                                       20

<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

                                  June 30, 1996

NOTE A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS SEGMENT INFORMATION

The  Company  operates  primarily  in one  business  segment  -  sales  of  high
reliability power semiconductor multi-chip modules for use in military/aerospace
and  high-end  industrial  applications.  The  Company  also  markets  a turnkey
software package and database of pertinent component information.

CONSOLIDATION

The consolidated  financial  statements  include the accounts of the Company and
its majority-owned  subsidiaries (Omnirel Corporation ("Omnirel") and Transition
Analysis of Component Technology, Inc. ("TACTech)). All significant intercompany
accounts and transactions have been eliminated.

REVENUE RECOGNITION

The  Company  recognizes  sales  at  the  time  of  shipment/services  provided.
Consistent with industry  practice,  Omnirel warrants that its products are free
from defects in workmanship and meet the agreed upon specifications  supplied by
the customer or Omnirel's current published specifications.  As of June 30, 1995
and  1996,  the  Company  has  warranty   reserves  of  $343,000  and  $222,000,
respectively.

CASH AND CASH EQUIVALENTS

The Company considers all short-term liquid investments with a maturity of three
months or less when purchased to be cash equivalents.

INVENTORIES

Inventories  are  stated at the lower of cost  (first-in,  first-out  method) or
market.


                                       21

<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

NOTE A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

MARKETABLE SECURITIES

As of the  beginning  of fiscal  1995,  the Company  adopted the  provisions  of
Statement  115,   "Accounting  for  Certain   Investments  in  Debt  and  Equity
Securities,"  and such adoption did not have a material  impact on the Company's
financial  statements.  Debt  securities  that the Company has both the positive
intent and  ability to hold to  maturity  are carried at  amortized  cost.  Debt
securities  that the Company  does not have the  positive  intent and ability to
hold to maturity and all marketable  equity  securities are classified as either
available-for-sale or trading and are carried at fair value.  Unrealized holding
gains and losses on securities classified as available for sale are carried as a
separate component of shareholders' equity.  Unrealized holding gains and losses
on  securities  classified  as trading are reported in earnings.  As of June 30,
1996, all marketable securities are held as available for sale.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment,  including equipment leased under capital leases,
are stated at cost and are depreciated using the  straight-line  method over the
estimated  useful lives of the assets,  ranging from three to twenty five years.
Leasehold  improvements are amortized over the terms of the respective leases or
the service lives of the improvements,  whichever is shorter.  During the fiscal
year 1995 the Company  recorded an increase  in  depreciation  and  amortization
expense  in the amount of  $386,000  due to a change in  estimate  of the useful
lives of certain  machinery  and  equipment  owned by Omnirel  due to  Omnirel's
accelerated and additional use of its manufacturing machinery and equipment.

EXCESS OF COST OVER ASSETS ACQUIRED

The excess cost over assets acquired is being amortized over fifteen years.  The
Company  periodically  reviews  the  carrying  value of the  excess of cost over
assets acquired for recoverability in relation to future earnings.

NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE

Net  income per common  and  common  equivalent  share is based on the  weighted
average  number of  shares  of Common  Stock  outstanding  during  each  period,
including the Common Stock equivalents of dilutive stock options and warrants.


                                       22

<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


NOTE A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial  statements and accompanying notes.
Actual results could differ from those estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash, accounts receivable,  accounts payable and accrued
expenses  reasonably  approximate  fair value due to the short maturity of these
items.  Marketable  securities are based upon quoted market prices. The carrying
amounts of loans payable bank and long-term  obligations  also  approximate fair
value  in  that  interest  rates  for  the  credit  facilities  are  tied to the
applicable bank's prime lending rates.

RECENT ACCOUNTING PRONOUNCEMENTS

In 1995, the Financial  Accounting Standards Board issued Statement of Financial
Accounting  Standards  No. 121,  "Accounting  for the  Impairment  of Long-Lived
Assets to Be Disposed  Of." The Company will adopt  Statement  No. 121 in fiscal
1997, and the impact, if any, is not expected to be material.

The Company  accounts for warrants and stock option  grants in  accordance  with
Accounting  Principles  Board  Opinion No. 25,  "Accounting  for Stock Issued to
Employees." The Company  generally prices its warrants and stock options at fair
market value on the date of grant and,  therefore,  no  compensation  expense is
recognized  when  granted.  In fiscal  1997,  the  Company  intends to adopt the
disclosure   provisions   of  SFAS  No.   123,   "Accounting   for   Stock-Based
Compensation."

NOTE B. ACQUISITION/OFFICER LOAN

On June 26, 1991, the Company acquired  substantially all (approximately 96%) of
the  issued  and  outstanding  shares of  common  stock of  Omnirel  Corporation
("Omnirel").

Under the terms of certain shareholder agreements, Omnirel has agreed to and, in
certain  instances,  may be required to  repurchase  the minority  shareholders'
interest in Omnirel, at a formula price, as defined,  based on the fair value of
the Omnirel stock or earnings.

                                       23

<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

In  connection  with  the  acquisition,   the  Company  loaned  $250,000  to  an
officer/director  of Omnirel and the  Company,  to purchase  common stock of the
Company on the open market,  in exchange for a  non-interest  bearing note.  The
note is due July 1,  2001,  is secured  by the  84,000  shares of the  Company's
common stock owned by the officer/director,  and is classified as a reduction of
equity.  During  the 1996  fiscal  year,  $80,000 of this note was  repaid.  The
Company also loaned the officer/director $300,000, the balance of which ($60,000
at June 30, 1995) was repaid in fiscal 1996.

NOTE C. INVENTORIES

Inventories consists of the following:

<TABLE>
<CAPTION>
  

                                                                   JUNE 30
                                                              1995         1996
                                                        --------------------------
                                                              (000's omitted)
<S>                                                      <C>             <C>


           Raw materials                                     $2,110       $2,472
           Work in process                                    1,195        1,294
           Finished goods                                       512          524
                                                          --------------------------
                                                             $3,817       $4,290
                                                          ==========================

</TABLE>


NOTE D. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of:


<TABLE>
<CAPTION>
                                                                  JUNE 30
                                                              1995         1996
                                                        --------------------------
                                                               (000's omitted)
<S>                                                         <C>        <C>

           Land                                             $   300     $     300
           Building and improvements                          2,572         2,929
           Equipment                                          5,033         5,483
           Furniture and fixtures                               541           744
           Leasehold improvements                               582           546
                                                          --------------------------
                                                             $9,028       $10,002
                                                          ==========================

</TABLE>


                                       24

<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

NOTE E. CREDIT FACILITIES

Credit facilities consist of the following:

<TABLE>
<CAPTION>
                                                                   JUNE 30
                                                              1995         1996
                                                          --------------------------
                                                               (000's omitted)

<S>                                                       <C>           <C>

           Loans payable bank:
           Revolving line of credit-Omnirel                 $     -      $   856
           Line of credit-Zing                                    -        4,975
                                                          --------------------------
                                                            $     -       $5,831
                                                          ==========================
           Long-term obligations:
           Mortgage payable to bank                         $     -       $1,484
           Note payable to bank                                 972            -
           Less current portion                                (231)         (39)
                                                          --------------------------
                                                              $ 741       $1,445
                                                          ==========================

</TABLE>

At June 30,  1995,  Omnirel  Corporation  had  $972,000  outstanding  against an
equipment line of credit. In December 1995, Omnirel converted the equipment line
of  credit  to a  $5,000,000  revolving  line of credit  (the  "Line")  expiring
November 30, 1996,  which bears interest at the bank's base rate plus .5% (8.75%
at June 30, 1996). Maximum borrowings under the Line are determined by a formula
based upon eligible  accounts  receivable  and inventory  balances.  At June 30,
1996, borrowings under the Line aggregated $856,000.

The Line requires  maintenance  of certain  financial  ratios and contains other
restrictive  covenants,  including a  restriction  on the payment of  dividends.
Substantially all assets,  excluding real estate and related fixtures, have been
pledged as collateral.

Omnirel  obtained a mortgage on its facility in December,  1995. The outstanding
balance on the mortgage at June 30, 1996 was $1,484,000. The mortgage matures on
December 18, 2000 and monthly  payments are made for  principal,  using a twenty
year  amortization,  and for interest based on the bank's lending rate plus 1.5%
(9.75% at June 30, 1996). Omnirel's mortgage is guaranteed by Zing.

During May 1996,  Zing entered into a $5,000,000  line of credit expiring May 1,
1997,  which bears  interest  at the option of the  Company  equal to either the
prime rate less .75% or the bank's  cost of funds rate (6.3% at June 30,  1996).
At June 30,  1996,  marketable  securities  with a fair  value of  approximately
$10,000,000 collateralized borrowings aggregating $4,975,000.


                                       25
<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

                      NOTE E. CREDIT FACILITIES (CONTINUED)

In July  1996,  Omnirel  replaced  the  $5,000,000  Line  with a new  $5,000,000
facility  comprised  of (a) a  $1,500,00  revolving  line of credit  maturing in
November 30, 1997, (b) a $1,500,000  term loan,  maturing  August 1, 2001, (c) a
$500,000  equipment  line  of  credit,  expiring  November  30,  1997  and (d) a
$1,500,000 standby term loan, expiring November 30, 1997. In connection with the
refinancing,  Omnirel repaid the outstanding balance on the Line and borrowed an
additional  $640,000 from the $1,500,000 term loan facility.  The new facility's
covenants and collateral  requirements are identical to the original  $5,000,000
Line.

The annual payment requirements on the mortgage subsequent to June 30, 1996 are
as follows:

                            1997             $   39,000
                            1998                 28,000
                            1999                 31,000
                            2000                 34,000
                            2001              1,352,000

The Company made  interest  payments of $287,000  during the year ended June 30,
1996,  $148,000 during the year ended June 30, 1995 and $286,000 during the year
ended June 30, 1994.

NOTE F. INCOME TAXES

The Company  records taxes under the liability  method of accounting  for income
taxes.  Under this method,  deferred tax assets and  liabilities  are determined
based on  differences  between  financial  reporting and tax bases of assets and
liabilities  and are measured  using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.

Omnirel's net operating  loss  carryforwards  for federal income tax purposes of
approximately $3,600,000 at June 30, 1996 expire through 2007, subject to annual
limitations under Section 382 of the Internal Revenue Code.

Income tax provision consists of the following:

<TABLE>
<CAPTION>

                                                                YEAR ENDED JUNE 30
                                                         1994          1995          1996
                                                     -----------------------------------------
                                                                  (000's omitted)
<S>                                                    <C>             <C>          <C>
Current:
   Federal                                                 $-           $266         $1,706
   State                                                    -             88            450
Deferred Federal                                            3            (29)           189
                                                     -----------------------------------------
                                                           $3           $325         $2,345
                                                     =========================================

</TABLE>


                                       26
<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

NOTE F. INCOME TAXES (CONTINUED)

The reconciliation of the differences between the tax provision and  the amounts
computed by applying the statutory Federal income tax  rate  to  pre-tax  income
follow:

<TABLE>
<CAPTION>

                                                                YEAR ENDED JUNE 30
                                                         1994          1995          1996
                                                     -----------------------------------------
                                                                 (000's omitted)
<S>                                                     <C>            <C>         <C>
Statutory Federal income tax rate (34%)                   $ 74         $ 966         $2,298
State income tax net of Federal tax benefit                 17            59            297
Adjustment to valuation allowance                         (154)         (927)          (173)
Adjustment of deferred income taxes                          -           193              -
Permanent differences resulting from purchase
   accounting                                               52            52             68
Entertainment expense disallowance                          12            34             25
Non-deductible insurance premiums                           13            19             12
Non-deductible capital losses                               39             -              -
Tax exempt dividends                                       (65)         (100)          (228)
Other-net                                                   15            29             46
                                                     -----------------------------------------
                                                          $  3         $ 325         $2,345
                                                     =========================================

</TABLE>

Deferred  income taxes reflect the tax effect of temporary  differences  between
the carrying amount of assets and liabilities for financial  reporting  purposes
and the amounts  used for income tax  purposes.  Significant  components  of the
Company's deferred taxes are as follows:

<TABLE>
<CAPTION>

                                                                   JUNE 30
                                                              1995         1996
                                                          --------------------------
                                                               (000's omitted)
<S>                                                         <C>          <C> 

           Net operating losses                              $1,394       $1,221
           Noncompete agreement                                 578          374
           Purchase accounting bases differences               (300)        (284)
           Warranty reserves                                    117           75
           Inventory reserves                                   155          162
           Unrealized loss on marketable securities             105          110
           Other                                                 35           64
                                                          --------------------------
           Gross deferred tax asset                           2,084        1,722
           Valuation allowance                                 (800)        (627)
                                                          --------------------------
           Net deferred tax asset                            $1,284       $1,095
                                                          ==========================

</TABLE>

                                       27
<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

NOTE F. INCOME TAXES (CONTINUED)

The net decrease in the  valuation  allowance  for the years ended June 30, 1996
and 1995 was $173,000 and  $927,000,  respectively,  resulting  from the current
year utilization of net operating loss carryforwards.

The Company made no income tax payments  during 1994 and 1995.  In 1996,  income
tax payments aggregated $1,950,000.

NOTE G. STOCKHOLDERS' EQUITY

Treasury stock outstanding is as follows:

<TABLE>
<CAPTION>

         FISCAL YEAR                                      AVERAGE PRICE
       ENDED JUNE 30,         SHARES       TOTAL COST       PER SHARE
     -------------------- --------------- -------------- ----------------
<S>                      <C>              <C>              <C>

            1993                2,600        $  5,200         $2.00
            1994               11,500          43,125          3.75
            1995              185,818         421,090          2.27
                          --------------- --------------
                              199,918         469,415
            1996               55,100         513,522          9.32
                          --------------- --------------
                              255,018        $982,937
                         =============== ==============
</TABLE>

Warrant activity is as follows:

<TABLE>
<CAPTION>

                                                                    WARRANTS        PRICE
                                                                  -------------- -------------
<S>                                                                <C>              <C>
Outstanding at June 30, 1994                                         199,318         $1.34
Exercised - fiscal 1995                                             (101,844)         1.34
                                                                  --------------
Outstanding at June 30, 1995                                          97,474          1.34
Exercised - fiscal 1996                                              (76,564)         1.34
                                                                  --------------
Outstanding at June 30, 1996                                          20,910          1.34
                                                                  ==============

</TABLE>

Subsidiary option activity is as follows:

As of June 30, 1996, as a result of the issuance of 151,000  options to purchase
Omnirel  common  stock,  at or above fair  market  value at the grant  date,  to
Omnirel  employees in fiscal 1995,  the Company's  ownership of Omnirel could be
reduced to approximately 84% upon the exercise of such options.  134,000 options
with an exercise  price of $8 vest over a three year  period and 17,000  options
with an exercise price of $10 vest over a five year period. During 1996, Omnirel
granted an additional  10,000  options with an exercise price of $10. As of June
30,  1996,  44,667  $8  options  and  3,400  $10  options  had  vested  and were
exercisable.

                                       28
<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

NOTE H. MARKETABLE EQUITY SECURITIES

For the years ended June 30,  1995 and 1996,  marketable  securities  consist of
equity securities carried at market value.  Marketable  securities had a cost of
$5,313,000 as of June 30, 1995 and  $19,706,000  as of June 30, 1996. As of June
30,  1996  gross  unrealized  gains  and  losses  were  $866,000  and  $646,000,
respectively.

Included in the  determination  of net income for the years ended June 30, 1994,
1995  and  1996  were  realized   gains  of  $73,000,   $388,000  and  $478,000,
respectively,   and  realized   losses  of  $147,000,   $30,000  and   $587,000,
respectively.

During fiscal 1996,  the Company  engaged in one short sale which  obligated the
Company to replace securities  borrowed by purchasing  additional  securities at
its then current  market  value.  At June 30,  1996,  the  Company's  short sale
obligation aggregated  $1,026,000.  Included in the determination of fiscal 1996
net income was a gain of $94,000 related to the difference  between the proceeds
from the short sale and the related obligation at June 30, 1996.

During fiscal 1995 and 1996, net unrealized losses of $307,000 and $578,000 were
charged  to income  representing  a  reduction  in the  market  value of certain
marketable securities which was deemed to be other than temporary.

NOTE I. EMPLOYEE BENEFIT PLANS

The Company has a deferred  compensation  program  for all  employees,  which is
qualified under Section 401(k) of the Internal  Revenue Code. Under the program,
contributions  to be made by the Company are at the  discretion  of the Board of
Directors of the Company and were $11,000 for 1994,  $5,000 for 1995 and $10,500
for 1996. The Company does not maintain post-retirement benefit plans.

NOTE J. LEASES

The Company has a noncancelable  operating lease expiring October 31, 1997 at an
annual rent of $15,000. As of June 30, 1996 the Company had no other significant
operating leases. Rental expense for all operating leases were $35,000 for 1994,
$57,000 for 1995 and $59,000 for 1996.


                                       29

<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

NOTE K. RESEARCH AND DEVELOPMENT

During fiscal 1994, 1995 and 1996, research and development expenditures,  which
are included in selling,  general and  administrative  expenses,  were $841,000,
$1,055,000 and $1,361,000, respectively.

NOTE L. CONCENTRATION OF CREDIT RISK

For fiscal 1994, sales to two customers  aggregated 17% and 11% of the net sales
of the  Company.  Sales to one customer  aggregated  58% of the net sales of the
Company  for fiscal  1996 as  compared  to sales to the same  customer in fiscal
1995,  aggregating  61%. As of June 30, 1994,  amounts due from these  customers
aggregated  $909,000.  As of June  30,  1996 and  1995,  amounts  due from  this
customer aggregated $223,000 and $2,414,000, respectively.

NOTE M. RELATED PARTY TRANSACTIONS

During the years ended June 30, 1994, 1995 and 1996, the Company  incurred costs
for legal  services  rendered by a law firm (a principal of which is a member of
the Board of  Directors  of the  Company)  amounting  to $54,000,  $347,000  and
$228,000, respectively.

NOTE N. SUBSEQUENT EVENTS

During July and August 1996,  the Company  acquired  for  its  treasury  128,400
shares of its common  stock for  $1,297,000  at an average price of  $10.10  per
share.


                                       30
<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

                   Quarterly Financial Information (Unaudited)

<TABLE>
<CAPTION>

                                                          1996 FISCAL QUARTERS
                                      ----------------------------------------------------------
                                         FIRST      SECOND      THIRD      FOURTH       1996
                                      ----------------------------------------------------------
                                               (000's omitted, Except Per Share Data)

<S>                                      <C>         <C>         <C>        <C>       <C>

Net sales                                $9,287       $7,222      $4,910    $4,630     $26,049
Gross profit                              4,655        3,183       2,108     1,831      11,777
Total selling, general and
   administrative expenses                2,139        1,940       1,734     1,978       7,791
Interest expense and amortization of
   deferred note issuance costs              30           67          58       132         287
Interest and other income, net             (516)          54        (394)   (2,244)(a)  (3,100)
Minority interest in income of
   consolidated subsidiary                    -            -          31        10          41
                                      ----------------------------------------------------------
Income before income taxes                3,002        1,122         679     1,955       6,758
Provision for income taxes                1,152          211         188       794       2,345
                                      ==========================================================
Net income                               $1,850       $  911      $  491    $1,161      $4,413
                                      ----------------------------------------------------------
Net income per share                     $  .69       $  .34      $  .18    $  .44      $ 1.68
                                      ==========================================================

Number of shares used in computation  2,687,000    2,690,000   2,680,000 2,662,000   2,629,000


</TABLE>

(a) Includes $2,000 of additional proceeds from the Arrow Electronics sale in
May 1993.

<TABLE>
<CAPTION>
                                                        1995 FISCAL QUARTERS
                                      ----------------------------------------------------------
                                         FIRST      SECOND      THIRD      FOURTH       1995
                                      ----------------------------------------------------------
                                               (000's omitted, Except Per Share Data)
<S>                                      <C>         <C>          <C>       <C>        <C>
Net sales                                $3,374      $3,580       $5,832     $9,805    $22,591
Gross profit                              1,330       1,476        2,694      4,018      9,518
Total selling, general and
   administrative expenses                1,380       1,469        2,489      2,241      7,579
Interest expense and amortization of
   deferred note issuance costs              22          45           59         22        148
Interest and other income, net             (270)       (256)        (353)      (172)(b) (1,051)
                                      ----------------------------------------------------------
Income before income taxes                  198         218          499      1,927      2,842
Provision for income taxes                    3           3           96        223        325
                                      ----------------------------------------------------------
Net income                               $  195      $  215       $  403     $1,704     $2,517
                                      ==========================================================
Net income per share                    $   .08    $    .08      $   .15    $   .63    $   .94
                                      ==========================================================


Number of shares used in computation  2,573,000   2,643,000    2,667,000  2,681,000  2,671,000

</TABLE>

(b) Includes a charge of $307 for the  reduction of  fair  value  of  marketable
    securities deemed to be other than temporary.


                                       31

<PAGE>
<PAGE>


                    Zing Technologies, Inc. and Subsidiaries

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

None.

PART III

Information  required under items 9 through 12 of this part will be incorporated
by reference from the Company's  definitive  Proxy  Statement or by amendment on
Form  10-KSB/A,  to be filed within 120 days  following the end of the Company's
June 30, 1996 fiscal year.

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K

(a)   The following consolidated financial statements of Zing Technologies, Inc.
      and subsidiaries are included in Item 7: Consolidated  balance sheets-June
      30, 1995 and 1996

            Consolidated  statements of  income-Years  ended June 30, 1994, 1995
            and 1996

            Consolidated statements of shareholders' equity-Years ended June 30,
            1994, 1995 and 1996

            Consolidated  statements  of cash  flows-Years  ended June 30, 1994,
            1995 and 1996

            Notes to consolidated financial statements

(b)   Exhibits required by Items 601 of Regulation S-B.

      11 - Statement Re Computation of per share earnings - Page 34.

      23 - Consent of Ernst & Young LLP - Page 35.

(c)   Reports on Form 8-K:

      On June 25, 1996, the Company filed reports on Form 8-K responding to Item
      5 and  reporting  the receipt,  on June 13, 1996,  of an  additional  $2.0
      million from the Arrow Sale.


                                       32

<PAGE>
<PAGE>



                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf  by  the  undersigned,  thereunto  duly  authorized  on the  28th  day of
September, 1996.

                             Zing Technologies, Inc.
                  --------------------------------------------
                                  (Registrant)

               By           /s/ Robert E. Schrader
                  --------------------------------------------
                               Robert E. Schrader
                       President, Chief Executive Officer

                            and Chairman of the Board

                            Date: September 28, 1996

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed bel9ow by the following persons on behalf of the registrant and
in the capacities and on the date indicated.

<TABLE>
<CAPTION>
      Signature                            Title                                  Date
      ---------                            -----                                  ----

<S>                                      <C>                                    <C>

by   /s/ Robert E. Schrader               President, Chief Executive             September 28, 1996
     -------------------------------      Officer and Chairman of the Board
         (Robert E. Schrader)             (Principal Executive Officer)
  
                                          
by   /s/ Martin S. Fawer                  Treasurer and Director                 September 28, 1996
     -------------------------------      (Principal Financial Officer)
     (Martin S. Fawer)                   

by   /s/ Deborah J. Schrader              Secretary and Director                 September 28, 1996
     -------------------------------
     (Deborah J. Schrader)

by   /s/ John F. Catrambone               Director                               September 28, 1996
     -------------------------------
     (John F. Catrambone)

by                                        Director                               September 28, 1996

     -------------------------------
     (Laurence Higgitt)

by   /s/ Henry A. Singer                  Director                               September 28, 1996
     -------------------------------
     (Henry A. Singer)

</TABLE>


                                       33

<PAGE>