SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
                            Annual Report Pursuant to
                       the Securities Exchange Act of 1934


                     For the fiscal year ended June 30, 1997
                         Commission file number 0-13313

                  TELECONFERENCING SYSTEMS INTERNATIONAL, INC.
                  --------------------------------------------
             (Exact name of registrant as specified in its charter)

                 Colorado                                36-3296861
                 --------                                ----------
        (State of incorporation)                      (I.R.S. Employer
                                                     Identification No.)

                     P.O. Box 4197, Englewood, CO 80155-4197
                     ---------------------------------------
               (Address of principal executive offices) (Zip Code)

        Registrant's telephone number, including area code: (303)761-8829
           Securities registered pursuant to Section 12(b) of the Act:

                            Title of each class: None
                                                 ----

                 Name of each exchange on which registered: N/A
                                                            ---

           Securities registered pursuant to Section 12(g) ofthe Act:

                 Title of each class: Common Stock, No par value

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 the  filing
requirements for at least the past 90 days.

                                  Yes   X       No
                                      -----        -----

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

State  issuer's  revenues  for its  most  recent  fiscal  year,  $6,139  (before
extraordinary items).



<PAGE>



Transitional Small Business Disclosure Format:

                           ______ Yes                X No

Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant  as of June 30,  1997 was $0,  based  upon the  closing  price of the
common stock on June 30, 1997.

Number of outstanding  shares of the  registrant's no par value common stock, as
of June 30, 1997: 41,733,000.


DOCUMENTS INCORPORATED BY REFERENCE

     List hereunder the following documents if incorporated by reference and the
Part of this Form 10-K into which the document is  incorporated:  (1) Any annual
report to  security  holders - None;  (2) Any proxy or  information  statement -
None;  (3) Any  prospectus  filed  pursuant  to Rule  424(b)  or (c)  under  the
Securities Act of 1933 - None.


<PAGE>



                                     PART 1
                                     ------

Item 1. DESCRIPTION OF BUSINESS
        
(a) Business Development
    --------------------

     (1) Teleconferencing  Systems  International,  Inc. ("Company" or "TSI"), a
Colorado  corporation,  was  incorporated  on  December  19,  1983,  to  design,
manufacture and market a wireless audio  teleconferencing  system called the TSI
Conferencer.

     Until 1987,  marketing  of the wireless TSI  Conferencer,  accessories  and
various  versions  of  the  Conferencer  was  accomplished  by  dealer  enrolled
resellers,  as well as, by direct  sales  efforts in areas  where  there were no
Company  representatives.  In early 1987, a plan was implemented which initiated
direct selling of wireless TSI  Conferencers  by inside sales  associates of the
Company.  Within a period of  approximately  one year, the Company  reversed the
source of sales from predominately resellers to end users.

     In the  Fall of 1990,  the  Company  began to  market  and  distribute  NEC
VoicePoint  speakerphones,  in addition to its wireless TSI Conferencer Systems.
The reason for becoming a distributor  of the NEC product was to increase  sales
and revenue  opportunities for the Company.  This product was not in competition
with the wireless TSI  Conferencer  and was,  therefore,  an  enhancement to the
Company's product line.

     The following is information  pertaining to major activities of the Company
during the last four  fiscal  years.  The Company  became a dealer for  Coherent
ConferenceMaster  Systems in 1991.  Coherent's  product was a feature rich small
room system.  For  approximately  a two year period,  Coherent  ConferenceMaster
Systems provided sales revenue for the Company. With the evolution of small room
systems  available in the industry,  another small room system appeared in 1993,
the Polycom  Sound  Station.  The Company  became a dealer for the Polycom Sound
Station and has sold the system in 1994.  At fiscal  year end 1995,  the Company
ceased active operation.

     During 1991 and 1992, TSI developed a version of the wired TSI  Conferencer
System, the Court/Line system, to provide an audio interface to multi-tract tape
recorders,  and sound systems which are present in most  courtrooms.  Sales were
made  during  1993 and 1994 fiscal  years to both  Federal  and State  Courts in
various locations  throughout the country.  Due to competition in the market and
new systems introduction,  the Company's business declined dramatically in 1995,
and the Company ceased active operations.

     (2) The Company has not been involved in any  bankruptcy,  receivership  or
similar proceeding during its existence.

     On April 30, 1997, the Company acquired 100% of the common stock of Wilding
Services,  Inc. to be a wholly  owned  subsidiary  for $1.00 and  assumption  of
approximately  $200.00 in filing fees. On June 29, 1997, the Company spun off in
a  share  distribution  pro-rata  to its  shareholders  Wilding  Services,  Inc.
together with the outdated  inventory rights to an anticipated  contract to sell


<PAGE>



equipment to Bell South, and Wilding  Services,  Inc. agreed to and subsequently
issued a promissory  note for  $140,000 to the Company to secure  payment of any
debts  of the  Company  which  might  be  asserted  as a  result  of  its  prior
operations.  Shareholders  of the Company were scheduled to receive one share of
stock of Wilding for each 50 shares of the Company owned by such shareholder.

     (3) TSI has not been  involved in any  material  reclassification,  merger,
consolidation  or purchase or sale of a significant  amount of assets not in the
ordinary course of business during the Company's last three fiscal years.

(b) Business of Issuer
    ------------------

     The Company no longer has any primary products.

     (2) Marketing and Distribution Methods
         ----------------------------------

     Products,  Services  and  Marketing.  The  Company  no longer  manufactures
products or sells products manufactured by others.

     (3) Status of Products
         ------------------

     None in process.

     (4) Competition
         -----------

     None currently, due to no operations.

     (5) Raw Materials
         -------------

     None.

     (6) Customer Dependence
         -------------------

     The Company had no actual sales to customers, only liquidation sales.

     (7) Patents, Trademarks and Licenses
         --------------------------------

     None.

     (8) Government Approval
         -------------------

     None Pending.

     (9) Governmental Regulations
         ------------------------

     None.


<PAGE>




     (10) Research and Development
          ------------------------

     The Company  spent $0 on research  and  development  activities  during the
fiscal years ended June 30, 1996 and 1997.

     (11) Environmental Regulations
          -------------------------

     Compliance  with  federal,   state  and  local  provisions  regulating  the
discharge of materials into the environment does not have any material effect on
the on the  capital  expenditures,  earnings  and  competitive  position  of the
Company.

     (12) Employees
          ---------

     As of June 30, 1997, the Company had no employees.

ITEM 2. DESCRIPTION OF PROPERTY

(a) Properties
    ----------

     The Company  maintains  administrative  offices on a shared  basis with its
President at no direct cost, but receives mail at P.O. Box 4197,  Englewood,  CO
80155-4197.

(b) Investment Policies
    -------------------
   
     The Company does not invest in, have interests in, have investments in real
estate or real estate  mortgages,  nor does the Company  have  securities  of or
interests in persons engaged in real estate activities.

(c) Description of Real Estate (owned) and Operative Data
    -----------------------------------------------------

     The Company does not own real estate or property.

ITEM 3. LEGAL PROCEEDINGS

     There are no pending legal  proceedings  to which the Company is a party of
to which any of its property is subject.


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

     No matter was submitted to a vote of the Company's  shareholders during the
year ended June 30, 1997.




<PAGE>



                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) Market Information
    ------------------

     The following  table shows the range of high and low bid  quotations of the
shares of the Company's  common stock for the eight fiscal  quarters  ended June
30, 1997.

                                                 BID
                                     ---------------------------
Period                               High                   Low
------                               ----                   ---

07/01/95 - 09/30/95                   N/A                    N/A
10/01/95 - 12/31/95                   N/A                    N/A
01/01/96 - 03/31/96                   N/A                    N/A
04/01/96 - 06/30/96                   N/A                    N/A
07/01/96 - 09/30/96                   N/A                    N/A
10/01/96 - 12/31/96                   N/A                    N/A
01/01/97 - 03/31/97                   N/A                    N/A
04/01/97 - 06/30/97                   N/A                    N/A

     The shares are traded in the over-the-counter  market. The above quotations
were furnished by the National  Quotation Bureau  Incorporated.  Such quotations
represent prices between dealers and do not include retail mark-ups, mark-downs,
or commissions and may not represent actual transactions.

(b) Holders
    -------

     As of June 30, 1997,  the Company had  approximately  383  shareholders  of
record.

(c) Dividends
    ---------

     The Company has not declared  cash  dividends on its common stock since its
inception and the Company does not  anticipate  paying any cash dividends in the
foreseeable future.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

Management's Discussion and Analysis of Financial Condition and Results of
Operations
--------------------------------------------------------------------------------

     The  following  is   management's   discussion   and  analysis  of  certain
significant factors which affected the Company's financial condition and results
of  operation  during the  periods in the  accompanying  consolidated  financial
statements.




<PAGE>



Liquidity
---------

     The Company had cash of $204 at June 30, 1997, and no other liquid assets.

     The Company has ceased active operations and has no business at the present
time. It anticipates seeking acquisition or merger candidates in the future.

     During the course of the fiscal  year ended June 30,  1997,  the  Company's
outstanding  debt level  decreased to $0 from $141,502 in fiscal year ended June
30,  1996 due to spin off of  possible  future  business  contracts,  assets and
liabilities into a subsidiary, Wilding Services, Inc.

     Working capital increased from a deficit of ($134,039) at June 30, 1996, to
a deficit of $204 at June 30, 1997.

Capital Resources
-----------------

     None.

     The  Company  has  no  other  known   material   commitments   for  capital
expenditures.  The Company has no additional plans,  agreements,  or commitments
concerning any transaction  which would require the Company to use a significant
amount of capital. The Company has no sources of capital at year end.

Results of Operations
---------------------

     Comparison  of year Ended June 30,  1997 to year Ended June 30,  1996.  The
Company ceased  operations in June 1995. Small collections of income occurred in
the year ended June 30, 1997 in the amount of $6,139, which compared to revenues
for the year ended June 30, 1996, of $50,327. This amounted to a decrease of 88%
in revenues.

     The  Company  had a cost of  sales  of $0 for year  ended  June  30,  1997,
compared  to cost of sales of $44,343 in year ended June 30,  1996.  General and
administrative for the years ended June 30, 1997 and 1996 were $6,441 and $9,787
respectively.

     The operating losses for years ended June 30, 1997 and 1996 were ($302) and
($3,803),  respectively.  Total losses before extraordinary items were ($12,302)
in 1997 and  ($11,684) in 1996.  The net income for the year ended June 30, 1997
was $134,243 after extraordinary  income of $146,545 due primarily to settlement
and  extinguishment of trade and related party  obligations.  For the year ended
June 30, 1996 the net loss was ($5,904) after $5,780 of miscellaneous income.

     Loss per share for year ended June 30,  1997 was $0 per share,  compared to
approximately  $0 per share  for year  ended  June 30,  1996,  before  and after
extraordinary items.

     The  management of the Company does not believe that  inflation has had any
material effect on the Company during the year ended June 30, 1997.


<PAGE>




ITEM 7. FINANCIAL STATEMENTS

(a)1. The following Financial Statements are filed as part of this report.

     Name of Document                                                    Page
     ----------------                                                    ----

Signature Page of this Report.                                            13

INDEPENDENT AUDITOR'S REPORT                                              F-2

CONSOLIDATED BALANCE SHEET - June 30, 1997                                F-3

CONSOLIDATED STATEMENTS OF OPERATIONS - for
the years ended June 30, 1997 and June 30, 1996                           F-4

CONSOLIDATED STATEMENTS OF CASH FLOWS - for
the years ended June 30, 1997 and 1996                                    F-5

CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDER'S EQUITY for the Period from
July 1, 1996 through June 30, 1997                                        F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                F-7

(a)2. There are no Financial  Statements  Schedules required to be filed as part
of this Report.

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

     None.

     In  connection  with audits of two most recent fiscal years and any interim
period preceding resignation,  no disagreements exist with any former accountant
on any  matter  of  accounting  principles  or  practices,  financial  statement
disclosure, or auditing scope of procedure,  which disagreements if not resolved
to the  satisfaction  of the former  accountant  would  have  caused him to make
reference  in  connection   with  his  report  to  the  subject  matter  of  the
disagreement(s).

     The decision to change  accountants  was approved by the Board of Directors
as the registrant has no audit committee.




<PAGE>



                                    PART III

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

(a)  Identification of Directors.

     The present term of office of each  director will expire at the next Annual
Meeting  of  Shareholders.  The name,  position  with the  Company,  age of each
director and the period during which each director has served are as follows:

Name and Position in the Company               Age               Director Since
--------------------------------               ---               --------------

Keith R. Shwayder                              57                1983
(Chairman of the Board, President
and Chief Executive Officer)

     There was no  arrangement  or  understanding  between any  director and any
other person pursuant to which any director was selected as such.

Identification of Executive Officers.
-------------------------------------

     Each executive officer will hold office until his successor is duly elected
and  qualified  or until his  resignation  or until he shall be  removed  in the
manner provided by the Company's bylaws. The Company's executive officers, their
ages, position with the Company and periods during which they have served are as
follows:

Name and Position in the Company               Age               Officers Since
--------------------------------               ---               --------------
Keith R. Shwayder                              57                1984
(Chairman of the Board, President
and Chief Executive Officer)

     Business  Experience  (1) The  following is a brief account of the business
experience  for at least  the last five  years of each  director  and  executive
officer of the Company:

Name of Director or
Executive Officer   Principal Occupation the Last Five Years
-----------------   ----------------------------------------

Keith R. Shwayder   President of the Company since July,  1991;  Director of the
                    Company since December 1983; Chairman of the Board and Chief
                    Executive  Officer of the  Company  since  September,  1984;
                    Director of Masada, Ltd., which owned a radio station, since
                    March 1985; President and director of SRF Investments,  Inc.
                    d/b/a  West  Coast  Tel-Data,   Inc.  since  August,   1989;
                    President and director of South West  Tel-Data,  Inc.  since
                    October, 1989.


<PAGE>



                    President,   director  and  sole  shareholder  of  Telephone
                    Systems  International,  Inc., a holding  company for wholly
                    owned subsidiaries of which are SRF Investments,  Inc. d/b/a
                    West Coast  Tel-Data,  Inc.  and South West  Tel-Data,  Inc.
                    since  January  1993;  President  of  Teletek,   Inc.  which
                    installs  cable  for  telephone  systems  and  operates  pay
                    telephones,  from September, 1982 to January, 1993, and from
                    1979  to  1981;  director  of  Teletek,  Inc.  from  1979 to
                    January, 1993.

     To the Company's knowledge, only the sole director and officer or more than
10%  shareholder  of the  Company  failed  to  timely  file a Form 5 during  the
Company's fiscal year ended June 30, 1997.

(b)  Identification of Certain Significant Employees. Not applicable.

(c)  Family  Relationships.  There  are  no  family  relationships  between  the
executive officers and directors of the Company.

(d)  Involvement in Legal Proceedings. Not Applicable.

ITEM 10. EXECUTIVE COMPENSATION

     The following table sets forth for the Company's fiscal year ended June 30,
1997,  the  compensation  paid  by the  Company  for  services  rendered  in all
capacities  to the  Company to the person  who at June 30,  1997,  was the chief
executive  officer of the Company.  No other  executive  officers of the Company
received  salary and bonus from the  Company in excess of  $100,000  during such
fiscal year.

                           SUMMARY COMPENSATION TABLE
================================================================================
Name and Principal Position               Year              Annual Compensation
                                                                  Salary
--------------------------------------------------------------------------------
Keith R. Shwayder                         07/01/96-06/30/97        $0
(Chairman of the Board, President, and    07/01/95-06/30/96        $0
Chief Executive Officer)                  07/01/94-06/30/95        $0
================================================================================

Stock Options

     No stock options were granted or exercised Company's last fiscal year ended
June 30,  1997,  and the Company has no stock  options  outstanding  at June 30,
1997.

Compensation of Directors

     No director  received  compensation  for serving on the Company's  Board of
Directors.



<PAGE>



ITEM 11. SECURITY, OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a) and (b) Security Ownership of Certain Beneficial Owners and Management.  The
following  table  sets  forth as of June 30,  1997,  the number of shares of the
Company's no par value common stock owned by each person who owned of record, or
was  known to own  beneficially,  more  than 5% of the  number  of shares of the
Company's  outstanding  common  stock,  sets  forth the  number of shares of the
Company's  outstanding  common stock beneficially owned by each of the Company's
current  directors  and  officers,  and sets  forth the  number of shares of the
Company's  common  stock  beneficially  owned  by all of the  Company's  current
directors and officers as a group:


Name of Beneficial           Position with        Amount and Nature of    Class
Owner                        Company              Beneficial Ownership
--------------------------------------------------------------------------------
Keith R. Shwayder            Chairman of the      32,504,600              77.89%
10200 E. Girard Avenue       Board, Chief
Suite 309A, Building A       Executive Officer
Denver, CO  80231            and Director

All Directors and Officers                        32,504,600              77.89%
as a Group (1 Person)


(c) Changes in Control.  There was at June 30, 1997 a contract by which Exchange
Place  partners,  LLC had contracted to purchase  control of the Company through
the purchase of  30,626,600  shares of stock owned by Keith  Shwayder.  The full
purchase price had not been tendered and the agreement was executed resulting in
a change of control of the Company,  however, the Company is actively seeking an
acquisition,  or merger,  or to be  acquired,  which  could  involve a change of
control.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     (a) and (b)  Transactions  with Management and Others and Certain  Business
Relationships.  Keith R. Shwayder allocates  approximately 1% of his time to the
Company's business.

     On April 20, 1997, the Board of Directors  approved the  acquisition of all
of the  outstanding  stock  of  Wilding  Services,  Inc.  ("WSI"),  an  inactive
corporation  not affiliated  with any  stockholder/director/officer  for nominal
consideration.  The purpose of the acquisition was for WSI to fulfill a proposed
contract  with  outdated  inventory  (the  cost of  which  had  previously  been
substantially written down).

     On June  20,  1997,  the  Board  of  Directors  approved  a  resolution  to
distribute  all of the stock of WSI to  shareholders  of the Company,  effective
June 29, 1997. Coincidental with the distribution,  the Company agreed to convey
to WSI its outdated inventory, business supplies,  liabilities and any potential



<PAGE>



contract  opportunities  to facilitate  the  Company's  ability to find a merger
candidate.  In return,  the Company was to receive a  non-interest  bearing note
receivable  from  WSI for any  liabilities,  which  might  be  asserted  by past
creditors of the Company up to the amount of $140,000.  On October 3, 1997,  the
promissory note, secured by all of the assets of WSI was executed.

     During  fiscal  1997,  the Company  eliminated a total of $114,926 of trade
payables  owed  creditors  and $35,945  owed  affiliates  for  amounts  believed
settled. The eliminations, less $4,326 in inventory and other assets conveyed to
WSI  are  recorded  as an  extraordinary  item  in  the  accompanying  financial
statements.  The  Company is  contingently  liable  for claims  settled by these
creditors in the event of non-payment of the claims by WSI pursuant to the terms
of the promissory note described above.

     Management Fees
     ---------------

     The   Company   paid   management   fees   to   an   entity   owned   by  a
stockholder/director/officer,  Keith Shwayder,  of the Company  totaling $12,000
and $10,000 for fiscal 1997 and 1996, respectively.

     Rent
     ----

     During  fiscal 1997 and 1996,  the Company  rented its  facilities  from an
affiliate on a month-to-month  basis. Rent expense was $1,800 and $2,950 for the
years ended June 30, 1997 and 1996, respectively.

(c) Indebtedness of Management.  No director or executive officer of the Company
and no associate of any such  director or executive  officer was indebted to the
Company at any time since the beginning of the Company's  last fiscal year in an
amount in excess of $60,000.

(d) Transactions with Promoters. Not applicable.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Lists of Exhibits Required by Item 601 of Regulation S-B

         (3.1)    Articles  of  Incorporation,  as  amended,  which  are  hereby
                  incorporated  herein  by  reference  to  Exhibit  (3.1) to the
                  Company's  Annual Report on Form 10-K for the fiscal year June
                  30, 1993.

         (3.2)    Bylaws as amended through  October 14, 1987,  which are hereby
                  incorporated  herein  by  reference  to  Exhibit  (3.2) to the
                  Company's  Annual  Report  on form 10- K for the  fiscal  year
                  ended June 30, 1993.

(b)  Reports on Form 8-K.  No  reports on Form 8-K were filed  during the fiscal
year ended June 30, 1997.



<PAGE>



                                   SIGNATURES


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


Dated:   October 22, 1997



                                    TELECONFERENCING SYSTEMS INTERNATIONAL, INC.
                                    a Colorado corporation


                                    By: /s/  Keith R. Shwayder
                                       -----------------------------------------
                                       President, and Chief Executive Officer


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


Dated: October 22, 1997                 /s/  Keith R. Shwayder
                                       -----------------------------------------





<PAGE>


--------------------------------------------------------------------------------
TELECONFERENCING SYSTEMS INTERNATIONAL, INC.
Consolidated Financial  Statements
Table of Contents

================================================================================



                                                                      PAGE
                                                                      ----

Report of Independent Public Accountant                                F-2

Consolidated Financial Statements

         Consolidated Balance Sheet                                    F-3

         Consolidated Statement of Operations                          F-4

         Consolidated Statement of Cash Flows                          F-5

         Consolidated Statement of Changes in 
           Stockholders' Equity (Deficit)                              F-6

         Notes to Consolidated Financial Statements                    F-7



<PAGE>

                                                                GAYLEN R. HANSEN
                                                     CERTIFIED PUBLIC ACCOUNTANT
                                              6061 South Willow Drive, Suite 230
                                              Greenwood Village, Colorado  80111
                                                                   (303)770-2595

REPORT OF INDEPENDENT PUBLIC ACCOUNTANT

October 8, 1997

To the Board of Directors
Teleconferencing Systems International, Inc.
Denver, Colorado

I have audited the accompanying  consolidated  balance sheet of Teleconferencing
Systems International, Inc. and subsidiary (the "Company,") as of June 30, 1997,
and the related consolidated statements of operations, cash flows and changes in
stockholders'  equity (deficit) for the year ended June 30, 1997 and 1996. These
financial  statements are the  responsibility  of the Company's  management.  My
responsibility  is to express an opinion on these financial  statements based on
my audits.

I conducted my audits in accordance with generally accepted auditing  standards.
Those standards  require that I 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.
I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material   respects,   the  financial  position  of   Teleconferencing   Systems
International,  Inc. and  subsidiary at June 30, 1997,  and the results of their
operations  and cash  flows  for the years  ended  June 30,  1997 and  1996,  in
conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will  continue  operation as a going  concern,  which  contemplates  the
realization  of assets and  liquidation  of  liabilities in the normal course of
business.  As discussed in Note A to the financial  statements,  the Company has
incurred significant  recurring losses and in fiscal 1995 defaulted on its notes
payable to a financial  institution.  Subsequent to June 30, 1995, the Company's
activities have been primarily liquidation of operating assets and settlement of
obligations to employees and  creditors.  These issues raise  substantial  doubt
about the Company's ability to continue as a going concern.  Management's  plans
in  regard  to  these  matters  are  also  described  in Note A.  The  financial
statements do not include any  adjustments to reflect the possible future effect
on  the   recoverability  and  classification  of  assets  or  the  amounts  and
classifications  of  liabilities  that  may  result  from  the  outcome  of this
uncertainty.



/s/  Gaylen R. Hansen
---------------------------
Gaylen R. Hansen



                                      F-2
<PAGE>

--------------------------------------------------------------------------------
TELECONFERENCING SYSTEMS INTERNATIONAL, INC.
Consolidated Balance Sheet

================================================================================



                                                                 June 30,
                                                                   1997
--------------------------------------------------------------------------------
ASSETS

CURRENT ASSETS

  Cash                                                           $    204
--------------------------------------------------------------------------------

                                                                 $    204
================================================================================

STOCKHOLDERS' EQUITY (DEFICIT)
  Contingencies (Note B)
  Common stock, stated no par value per share;
    authorized 100,000,000 shares; issued and
    outstanding 41,733,000 shares                                $ 41,733
Additional paid-in capital                                        925,124
Accumulated deficit                                              (966,653)
--------------------------------------------------------------------------------

                                                                 $    204
================================================================================













See accompanying Notes.




                                       F-3
<PAGE>

--------------------------------------------------------------------------------
TELECONFERENCING SYSTEMS INTERNATIONAL, INC.
Consolidated Statement of Operations

================================================================================
                                                           Year Ended
                                                             June 30,
                                                --------------------------------
                                                     1997              1996
--------------------------------------------------------------------------------
NET SALES                                     $      6,139       $     50,327

COST OF SALES                                           -             (44,343)
--------------------------------------------------------------------------------

GROSS PROFIT                                         6,139              5,984

SELLING, GENERAL AND ADMINISTRATIVE                 (6,441)            (9,787)
--------------------------------------------------------------------------------

OPERATING LOSS                                        (302)            (3,803)
--------------------------------------------------------------------------------

OTHER INCOME (EXPENSE)
  Other income and (expenses)                           -               2,119
  Management fees charged by affiliates              (12,000)           (10,000)
--------------------------------------------------------------------------------

Total other income (expense)                       (12,000)            (7,881)
--------------------------------------------------------------------------------

LOSS BEFORE EXTRAORDINARY ITEM                     (12,302)           (11,684)

EXTRAORDINARY ITEM -
  SETTLEMENT AND EXTINGUISHMENT OF
  TRADE AND RELATED PARTY AMOUNTS PAYABLE          146,545              5,780
--------------------------------------------------------------------------------


NET INCOME (LOSS)                             $    134,243       $     (5,904)
================================================================================


INCOME (LOSS) PER SHARE:

  BEFORE EXTRAORDINARY ITEMS                  $         -        $         -

  EXTRAORDINARY ITEM                                    -                  -
--------------------------------------------------------------------------------

NET INCOME (LOSS) PER SHARE                   $         -        $         -
================================================================================

WEIGHTED AVERAGE SHARES OUTSTANDING             41,733,000         41,733,000
================================================================================

                             See Accompanying Notes

                                       F-4


<PAGE>
<TABLE>
<CAPTION>


TELECONFERENCING SYSTEMS INTERNATIONAL, INC.
Consolidated Statement of Cash Flows


                                                                      Year Ended
                                                                       June 30,
                                                              -------------------------
                                                                 1997           1996
                                                              -------------------------

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                        <C>             <C>         
Net income (loss)                                          $   134,243     $    (5,904)
Adjustments to reconcile net income (loss)
  to net cash provided by operating activities:
    Changes in operating assets and liabilities:
      Accounts receivable                                          576          39,387
      Inventories                                                5,851          44,149
      Prepaid expenses                                             196           2,754
      Payable to affiliates                                    (20,707)         51,207
      Accounts payable                                        (120,795)        (40,042)
---------------------------------------------------------------------------------------

    Net cash flows from (used for) operating activities           (636)         91,551
---------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Sale of other assets                                              -               -
---------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Principal payments to financial institution                       -         (138,382)
  Borrowings from financial institution                             -               -
---------------------------------------------------------------------------------------

    Net cash flows from (used for) financing activities             -         (138,382)
---------------------------------------------------------------------------------------

NET INCREASE (DECREASE) IN CASH                                   (636)        (46,831)

CASH - BEGINNING OF PERIOD                                         840          47,671
---------------------------------------------------------------------------------------

CASH - END OF PERIOD                                       $       204     $       840
=======================================================================================









                             See Accompanying Notes.

                                       F-5

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


-----------------------------------------------------------------------------------------------------
TELECONFERENCING SYSTEMS INTERNATIONAL, INC.
Consolidated Statement of Changes in Stockholders' Equity (Deficit)

=====================================================================================================

                                                             Additional
                                       Common Stock           Paid-In       Accumulated
                                   Shares        Amount       Capital         Deficit         Total
-----------------------------------------------------------------------------------------------------
<S>                              <C>            <C>          <C>           <C>              <C>       
Balances, July 1, 1995           41,733,000     $41,733      $925,124      $(1,094,992)     $(128,135)

  Net (loss)                             -           -             -            (5,904)        (5,904)
------------------------------------------------------------------------------------------------------

Balance at June 30, 1996         41,733,000      41,733       925,124       (1,100,896)      (134,039)

  Net income                             -           -             -           134,243        134,243
------------------------------------------------------------------------------------------------------

Balance at June 30, 1997         41,733,000     $41,733      $925,124      $  (966,653)     $     204
=======================================================================================================






                             See Accompanying Notes.

                                       F-6

</TABLE>

<PAGE>

--------------------------------------------------------------------------------
TELECONFERENCING SYSTEMS INTERNATIONAL, INC.
Notes to Consolidated Financial Statements

================================================================================

Note A - Summary of Significant Accounting Policies

Organization
------------

Teleconferencing  Systems  International,  Inc.  (TSI,  or the  "Company,")  was
incorporated  on December 19, 1983.  Through  June 30,  1995,  TSI's  operations
included the design,  manufacture  and  marketing  of an audio  teleconferencing
product as well as the distribution of certain non-  manufactured  conferencers.
On June 30, 1995, the Company  discontinued these activities except as discussed
in the following paragraph.

Continued Operations
--------------------

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will  continue  operation as a going  concern,  which  contemplates  the
realization  of assets and  liquidation  of  liabilities in the normal course of
business.  The Company has incurred significant  recurring losses, and in fiscal
1995 defaulted on its notes payable to a financial institution.  As a result, on
April 21,  1995,  the  financial  institution  notified  the Company that if the
business was not sold,  or a plan for an orderly  liquidation  of the assets not
submitted by May 31, 1995, it would exercise its rights or remedies according to
the loan documents.  Accordingly, the Company has taken steps and adopted a plan
to liquidate  its assets in order to repay the  obligations  owed the  financial
institution.  During fiscal 1996, the obligations owed the financial institution
were repaid from proceeds collected on outstanding accounts receivable and other
assets.  Subsequent  to June  30,  1995,  the  Company's  activities  have  been
primarily  liquidation  of operating  assets and  settlement of  obligations  to
employees and creditors.

The Company's  ability to continue as a going concern is dependent  upon several
factors,  including  identification  of a new business  activity,  achieving and
maintaining  profitable  operations from engaging in the new business  activity,
and obtaining  sufficient  significant  additional  long-term debt and/or equity
financing to meet its obligations.

Principles of Consolidation
---------------------------

During  1992,  Alpha  Communications  Service  Company  (Alpha),  a wholly owned
subsidiary,  was formed, but is currently inactive.  The consolidated  financial
statements include the accounts of TSI and Alpha. All intercompany  transactions
have been eliminated.

Use of Estimates
----------------

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 inevitably will differ from those estimates, and such differences
may be material to the financial statements.


                                       F-7


<PAGE>

--------------------------------------------------------------------------------
TELECONFERENCING SYSTEMS INTERNATIONAL, INC.
Notes to Consolidated Financial Statements

================================================================================

Net Income (Loss) Per Common Share
----------------------------------

Net income  (loss) per common share is based on the weighted  average  number of
common shares outstanding during the period.

Income Taxes
------------

The Company  accounts  for income  taxes  under the  liability  method,  whereby
current and  deferred tax assets and  liabilities  are  determined  based on tax
rates and laws  enacted  as of the  balance  sheet  date  applied  to  temporary
differences  between the book and tax basis of assets and liabilities.  Deferred
tax expense represents the change in the deferred tax asset/liability balance.

Note B - Related Party  Transactions,  Contingent  Liabilities and Extraordinary
         Item

Contingent Liabilities and Extraordinary Item
---------------------------------------------

On April 20, 1997, the Board of Directors approved the acquisition of all of the
outstanding stock of Wilding Services, Inc. ("WSI"), an inactive corporation not
affiliated  with any  stockholder/director/officer  for  nominal  consideration,
effective  April 30, 1997. The purpose of the acquisition was for WSI to fulfill
a proposed  contract with outdated  inventory  (the cost of which had previously
been substantially written down).

On June 20, 1997, the Board of Directors approved a resolution to distribute all
of the stock of WSI to  shareholders  of the Company,  effective  June 29, 1997.
Coincidental with the distribution,  to facilitate the Company's ability to find
a merger candidate,  the Company agreed to convey to WSI its outdated inventory,
business  supplies,  liabilities and any potential  contract  opportunities.  In
return,  the Company was to receive a non-interest  bearing note receivable from
WSI for any  liabilities,  which  might be  asserted  by past  creditors  of the
Company up to the amount of $140,000.  On October 3, 1997, the promissory  note,
secured by all of the assets of WSI was executed.

During fiscal 1997, the Company eliminated a total of $114,926 of trade payables
owed creditors and $35,945 owed  affiliates for amounts  believed  settled.  The
elimination's,  less $4,326 in inventory  and other assets  conveyed to WSI, are
recorded as an extraordinary item in the accompanying financial statements.  The
Company is  contingently  liable for claims settled with these  creditors in the
event  of  non-payment  of the  claims  by WSI  pursuant  to  the  terms  of the
promissory note described above.

Management Fees
---------------

The   Company    paid    management    fees   to   an   entity    owned   by   a
stockholder/director/officer  of the  Company  totaling  $12,000 and $10,000 for
fiscal 1997 and 1996, respectively.


                                       F-8


<PAGE>



Rent
----

During fiscal 1997 and 1996, the Company rented its facilities from an affiliate
on a  month-to-month  basis.  Rent  expense  was $1,800 and $2,950 for the years
ended June 30, 1997 and 1996, respectively.

Note C - Income Taxes

As of June 30, 1997, the Company had net operating loss  carryforwards  totaling
approximately $710,000 that may be offset against future taxable income, if any.
These loss  carryforwards  expire in varying  amounts from 1998 through 2012. In
addition,  the Company has a capital loss carryforward of approximately $40,000.
The use of these  carryforwards  amounts is limited in the event of  significant
changes in the Company's ownership.

A tax benefit has not been reported in the accompanying financial statements for
the  operating  loss and  capital  loss  carryforwards  because  the  Company is
uncertain as to the likelihood of utilization.  Accordingly, the approximate tax
benefit  of  $110,000  of the  carryforwards  has  been  offset  by a  valuation
allowance of the same amount.





                                       F-9