SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-K

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

December 31, 1997                                                 33-19107
---------------------------                               ---------------------
(For the fiscal year ended) (Commission File No.)

                                LBO CAPITAL CORP.
             (Exact name of Registrant as specified in its charter)

Colorado                                                         38-2780733
--------------------------------------------              --------------------
(State or other jurisdiction of organization)             (I.R.S. Employer
                                                          Identification Number)

7001 Orchard Lake Road, Suite 424
West Bloomfield, MI                                                48322
----------------------------------                         --------------------
(Address of principal executive offices)                         (Zip Code)

               Registrant's telephone number, including area code:
                                 (248) 851-5651

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

                                      None

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

                         Common Stock, $.0001 Par Value
                                (Title of Class)

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

      As of December  31, 1997, a total of  12,100,000  shares of common  stock,
$.0001 par value,  were outstanding and the aggregate market value of the voting
stock held by nonaffiliates of the Registrant was  approximately  $220,039 based
on the average of the bid and asked  prices on that date ($ .055) as reported by
The National Quotation Bureau, Inc.

<PAGE>

                                LBO CAPITAL CORP.
                                    FORM 10-K

                                     PART 1
ITEM 1.     BUSINESS

General

      LBO Capital Corp. (the  "Registrant")  was organized under the laws of the
State of Colorado on October 8, 1987.  The  Registrant  was formed  based on the
belief of its management that there are business  opportunities that, for one or
more reasons, are available for acquisition by the Registrant.

      On March 15, 1988, the Registrant completed a public offering of 3,000,000
Units, each Unit consisting of one share of its common stock, one Callable Class
A Warrant,  one Callable Class B Warrant and one Callable  Class C Warrant.  The
Warrants  are  detachable  from the Units and may be  traded  separately  in the
over-the-counter  market.  Each Class A Warrant  entitles the holder  thereof to
purchase  at a price of  $0.50,  one  share of  Common  Stock at any time  until
February 26, 1989. Each Class B Warrant  entitled the holder thereof to purchase
at a price of $0.75 one share of Common Stock at any time until August 26, 1989.
Each Class C Warrant  entitled  the holder  thereof  to  purchase  at a price of
$1.00,  one share of Common  Stock at any time  until  February  26,  1990.  The
expiration  dates of these warrants were  subsequently  extended by the Board of
Directors to expire on various dates, the latest being July 25, 1998. A Form 8-K
was filed on July 14, 1997 reporting this extension. The Registrant received net
proceeds of approximately $474,300 after payment of all costs of the offering.

      Since its inception,  the  Registrant  has directed its activities  toward
evaluating  potential  business  opportunities  with the goal of  acquiring  and
continuing  one or more business  opportunities.  The  Registrant may acquire an
existing   business   which   may  be  a   corporation,   partnership   or  sole
proprietorship.  One form which such a business  combination might take would be
an  exchange  of the  Registrant's  stock  for stock of the  acquired  business.
However,  the  Registrant may exchange its common stock to acquire the assets of
this entity, or may purchase a percentage of the entity outright.

      The Registrant has evaluated and attempted to acquire a number of entities
to date.


<PAGE>

ACQUISITION OF ASSETS

Ajay Sports, Inc.

      On April 3, 1989 LBO  acquired an  aggregate  of  1,880,000  shares of the
restricted common stock of Ajay Sports,  Inc. ("Ajay") for a total cash purchase
price of $182,000.

      In  1991,  the  Registrant  pledged  400,000  shares  of Ajay to a bank as
collateral for $300,000 in loans to Hendricks  Manufacturing Company. On July 1,
1991, this bank declared the loan in default and foreclosed on the shares.

      The 1,480,000 and 200,000  warrants  owned by the  Registrant  represented
7.16% of the total  shares of Ajay common stock  outstanding  as of December 31,
1997 and December 31, 1996. The decrease is the result of new shares issued.

      Ajay's Common Stock ("AJAY") and Units ("AJAYU") are trading on the Nasdaq
Small Cap and the Warrants  ("AJAYW")  have been traded  over-the-counter  since
1989 and are reported by the National  Quotation  Service.  The following  table
sets forth the range of high and low trade prices for the common stock:



                                         HI                    LOW
                                       ------                 ------
      1997
      ----
      First Quarter                    $  .31                 $  .16
      Second Quarter                   $  .34                 $  .13
      Third Quarter                    $  .28                 $  .19
      Fourth Quarter                   $  .34                 $  .13


      On June 10, 1993,  Thomas W. Itin,  President and Chairman of the Board of
Directors  of the  Registrant,  was elected to the  positions of Chairman of the
Board of Directors and Chief Executive  Officer of Ajay Sports,  Inc. It is felt
that the direct intervention by the Registrant's  management into the operations
of Ajay would have a positive  effect on the Ajay  earnings and the value of the
Ajay stock held by the Registrant.

      Business  Ajay  Sports,  Inc.,  through its  operating  subsidiaries  Ajay
Leisure  Products,  Inc., Palm Springs Golf and Leisure Life, Inc., is a leading
manufacturer and distributor of golf bags, clubs, carts,  accessories and casual
living furniture throughout the United States.


<PAGE>



Enercorp, Inc.

      On November 21, 1994,  the  Registrant  bought 2,667 shares of Enercorp,
Inc. for $8,702.  During 1996, the Registrant  bought 12,674 additional shares
of Enercorp, Inc. for $39,694.

      Enercorp,  Inc. is a business  development  company under the Investment
Company Act of 1940, as amended.

Competition

      The Registrant expects to encounter substantial competition in its efforts
to locate  businesses for  acquisition.  The primary  competition  for desirable
business  acquisitions is expected to come from other small companies  organized
and funded  for  purposes  similar  to the  Registrant,  small  venture  capital
partnerships and corporations,  small business investment  companies and wealthy
individuals.  Should  the  Registrant  elect to  engage  in a  leveraged  buyout
acquisition,  competition may also be anticipated from investment bankers.  Many
of  these  entities  have  significantly   greater  experience,   resources  and
managerial  capabilities  than  the  Registrant  and are  therefore  in a better
position than the Registrant to obtain access to businesses.

Employees

As of December 31, 1997, the Registrant had no employees.

ITEM 2.     PROPERTIES

      The   Registrant   currently   uses  office  space  provided  by  Acrodyne
Corporation,  a company  whose  Chairman  and  President  is also  Chairman  and
President of the  Registrant.  The space is used for purposes of  administration
and  development.  While the  Registrant  does not pay any  rent,  it does pay a
monthly fee of $150 for the direct operating  expenses.  The Registrant believes
its current facilities are sufficient for its present business activity.


ITEM 3.     LEGAL PROCEEDINGS

      The  Registrant  is not a  present  party to any  material  pending  legal
proceedings and no such proceedings were known as of the filing date.


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

      No matter was submitted to a vote of the Registrant's  shareholders during
the fiscal year ended December 31, 1997.


<PAGE>

                                     PART II

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



Common Stock

      The principal  market on which the Registrant's  common stock,  $.0001 par
value, is traded on the Over-The-Counter market.

      Prices  for the Common  Stock have been  reported  in the  National  Daily
Quotation Service "Pink Sheets" published by the National Quotation Bureau since
March 15, 1988.  The range of the bid and ask  quotations  for the  Registrant's
Common Stock during the quarters ended on the dates listed below is as follows:


                                    Bid*                        Ask*
                                 ----------                  ----------
                              HI            LOW            HI           LOW
                          --------        --------      --------      --------
1996
-------
First Quarter               $  .03        $    .03       $  .08        $  .07
Second Quarter              $  .03        $    .03       $  .08        $  .06
Third Quarter               $  .03        $    .03       $  .08        $  .08
Fourth Quarter              $  .03        $    .03       $  .08        $  .08

1997
-------
First Quarter               $  .03        $    .03       $  .10        $  .06
Second Quarter              $  .03        $    .03       $  .10        $  .08
Third Quarter               $  .03        $    .01       $  .10        $  .08
Fourth Quarter              $  .03        $    .01       $  .10        $  .08

      On December 31,  1997,  the bid reported for the Common Stock was $ .03*
and the ask price was $.10*.

      As of December 31, 1997, the number of record holders of the  Registrant's
Common  Stock  was  246.  This  figure  excludes  an   undetermined   number  of
shareholders whose shares are held in "street" or "nominee" name.

      The  Registrant has never paid a dividend with respect to its Common Stock
and does not intend to pay a dividend in the foreseeable future.
<PAGE>

Units

      Prices for the Units have been  reported in the National  Daily  Quotation
Service "Pink Sheets" published by the National Quotation Bureau since March 15,
1988. The range of the bid and ask quotations for the Registrant's  Units during
the quarters ended on the dates listed below is as follows:

                                    Bid*                        Ask*
                                 ----------                  ----------
                              HI            LOW            HI           LOW
                          --------        --------      --------      --------
1996
-------
First Quarter               $  .03        $    .03       $  .08        $  .07
Second Quarter              $  .03        $    .03       $  .08        $  .06
Third Quarter               $  .03        $    .03       $  .08        $  .08
Fourth Quarter              $  .03        $    .03       $  .08        $  .08

1997
-------
First Quarter               $  .03        $    .03       $  .10        $  .06
Second Quarter              $  .03        $    .03       $  .10        $  .08
Third Quarter               $  .03        $    .01       $  .10        $  .08
Fourth Quarter              $  .03        $    .01       $  .10        $  .08

      Each Unit  consists of one share of the  Registrant's  Common  Stock,  one
Callable Class A Warrant,  one Callable Class B Warrant and one Callable Class C
Warrant.

      On December  31, 1997,  the bid and the ask prices  reported for the Units
were $ .03* and $ .10*, respectively.

Warrants

 No ask or bid quotations were reported by the National Quotation Bureau, Inc.
since December, 1989.

      *Prices are inter-dealer  quotations as reported by the National Quotation
      Bureau,  Inc., New York, New York,  without adjustment for retail mark-up,
      mark-down  or  commission  and  may  not  necessarily   represent   actual
      transactions.

<PAGE>

ITEM 6.     SELECTED FINANCIAL DATA

                                   December 31
                        1997         1996       1995       1994        1993
------------------------------------------------------------------------------
Working Capital         $(560,736)  $(498,352) $(427,094) $(397,542)$(353,982)
Cash                           43          78         78        811    11,912
Marketable Securities      24,972      28,765      8,000          0         0
Notes Receivable                0           0          0          0         0
Investments in
  operating companies           0           0          0          0         0
Total Assets               24,972      28,843      8,251     15,887    44,364
Total Liabilities         585,708     527,195    435,345    407,106   375,570
Shareholders' Equity     (560,736)   (498,352)  (427,094)  (391,219) (331,206)





                                           December 31
                         1997        1996        1995       1994      1993
------------------------------------------------------------------------------

Total Operating Revenue          $0         $0          $0        $0        $0
Total Operating  Exp.        58,549     52,328      35,173    60,014   110,976
Net income (loss) before
 equity loss of affiliate   (58,549)   (52,328)    (35,173)  (60,014) (110,976)
Equity in net loss of
   affiliated company             0          0           0         0         0
Net income (loss)           (58,549)   (52,328)    (35,173)  (60,014) (110,976)
Net Income (loss)
  per common share           (  .00)    (  .00)       (.00)     (.00)     (.01)

<PAGE>

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

Liquidity and Capital Resources

      Working  capital at December  31, 1997 was  decreased  by $62,384 from the
period ended December 31, 1996.  This was mainly caused by a net loss of $58,549
and a decrease of $3,835 in the market value of securities available for sale.

      On  December  2,  1996,  the  Registrant  had a change in its  borrowing
arrangements.  The Registrant  borrowed $325,790 from Dearborn Wheels, Inc. to
repay a note payable to Michigan  National Bank.  The principal  balance as of
December 31,  1997,  was  $506,971.  The loan is at prime plus 2% interest and
is secured by all the intangible  assets of the Registrant.  Dearborn  Wheels,
Inc. is held in majority by the Registrant's President's spouse.


ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The Financial  Statements  required to be furnished hereunder are attached
hereto under Item 14.

      Supplementary   Financial   Schedules  for  which  provision  is  made  in
applicable  Regulations  of the Securities  and Exchange  Commission,  have been
omitted  or  the  required   information  is  not  required  under  the  related
instructions,  or the  information is presented in the Financial  Statements and
Notes thereto.


ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE

            None

<PAGE>

                                    PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Identification of Directors and Executive Officers

The  following  table sets forth the name,  address,  age and  position  of each
officer and director of the Registrant:
                                                                  Term
Name and Address              Age         Position                as Director
--------------------------   -----        ------------------      ------------
Thomas W. Itin                63          President and           Since
7001 Orchard Lake Rd.                     Chairman of the         Inception
West Bloomfield, MI  48322                Board of Directors

Anthony B. Cashen             61          Secretary,              Since
RD 2 Box 203                              Treasurer and           Inception
Ghent, NY 12075                           Director

Robert W. Schwartz            53          Director                Since
120 DeFreest Drive                                                March 28,
Troy, NY  12180                                                   1991

      All directors of the  Registrant  will hold office until their  successors
have been elected and  qualified or until their death,  resignation  or removal.
The bylaws of the  Registrant  provide that the number on the Board of Directors
shall be determined by resolution of the Board of Directors.

      The officers of the  Registrant  are elected at the annual  meeting of the
Board of  Directors  and hold  office  until  their  successors  are  chosen and
qualified or until their death, resignation or removal.

      The Registrant is subject to Section 13(a) of the Securities  Exchange Act
of 1934 and is  therefore  not  required to  identify  or  disclose  information
concerning its significant employees.

      There are no family relationships between any director,  executive officer
or person  nominated  or  chosen  by the  Registrant  to  become a  director  or
executive officer.

     Below is a summary  description of educational and professional  background
of each executive officer and director of the Registrant.
<PAGE>

      Thomas W. Itin.  Mr. Itin has served as the  Chairman  and  President of
the Board of  Directors  of the  Registrant  since  inception.  Since 1967 Mr.
Itin has also  served  as the  Chairman  of the  Board  and  President  of TWI
International,  Inc., West Bloomfield,  Michigan,  a firm engaged in providing
consulting  services for mergers,  acquisitions,  financial  structuring,  new
ventures,    private   investments,    joint   ventures,   asset   management,
export/import,  training  seminars and  executive and  professional  searches.
Mr. Itin is Chairman of the Board and President of Acrodyne  Corporation.  Mr.
Itin also is Chairman  of the Board of  Directors  of Ajay  Sports,  Inc.  and
Chairman of the Board of Directors and President of Williams  Controls,  Inc.,
both of which are publicly  held  companies.  Mr. Itin was a co-founder of RDM
Sports Group, Inc. (previously known as Roadmaster  Industries,  Inc.) in 1987
and served as a  Director  thereof  from  October  1987 until June 1993.  From
December  1987 until  October  1993,  Mr. Itin was an Officer and  Director of
CompuSonics  Video  Corporation.  Mr. Itin  received a BS degree from  Cornell
University  in 1957 at which  time he also  attended  the  Graduate  School of
Business.  He received his M.B.A. in 1959 from New York University, New York.

      Anthony  B.  Cashen.   Mr.   Cashen  has  served  as  the   Registrant's
Secretary,  Treasurer  and Director  since  inception.  He is director of Ajay
Sports,  Inc., a publicly held  corporation.  He also  currently is a Managing
Partner  in  Lamalie  Amrop,   International,   a  management  consulting  and
executive  recruiting  firm in New York  City.  Prior to his  joining  Lamalie
(formerly Flanagan & Webster),  he was President and owner of Elliot Hardwood,
an integrated  lumber  manufacturer  located in upstate New York.  Previously,
Mr. Cashen had been an officer and Principal of the  investment  firms of A.G.
Becker, Inc. and Donaldson,  Lufkin & Jenrette,  Inc. He serves as Director of
PW Communications  and Immucell  Corporation,  both of which are publicly-held
companies.  Mr.  Cashen  is also  President  of the  Sagamore  Institute.  Mr.
Cashen has an M.B.A.  from the Graduate School of Management (1958) and a B.S.
degree from Cornell University.

      Robert W. Schwartz Mr.  Schwartz has served as Director of the  Registrant
since March 28, 1991. Since 1985 he has been Chairman and President of Schwartz,
Gordon, Heslin & Associates, Inc., a management and financial consulting firm in
Troy,  New York.  From 1987 until 1991 he was a Director and Vice  President and
Treasurer of ESARCO International,  Inc., a publicly held company which licenses
and markets  all-terrain  trucks.  Previously  Mr.  Schwartz was  President  and
Director of  Winsources,  Inc., a telephone  equipment  supplier,  President and
Director of Cordian  Corporation  of Latham,  New York,  a  telephone  equipment
manufacturer, and Vice President of Finance of Garden Way Manufacturing Company,
Inc., a manufacturer of rototillers and outdoor equipment. Mr. Schwartz received
a B.S. degree in industrial and labor relations from Cornell  University and did
graduate work at State University of New York at Albany.





<PAGE>


ITEM 11.    EXECUTIVE COMPENSATION

      The Registrant  reimburses its directors for expenses  incurred by them in
connection  with  business  performed  on  the  Registrant's  behalf,  including
expenses incurred in attending meetings. In addition, directors receive a fee of
$250 for each Board of Directors meeting attended.  No such  reimbursements were
made for the period from January 1, 1990 to December 31, 1997. While none of the
officers   received  any  salary,   such  individuals  are  reimbursed  for  all
accountable expenses incurred on behalf of the Registrant.

      See Item 13 - Certain  Business  Relationships  and  Related  Transactions
under Acrodyne Corporation for additional information.

      The  Registrant  has no defined  benefit and actuarial  plan providing for
payments to employees  upon  retirement.  The  Registrant  also has no plans for
awarding stock options.  No other compensation was paid to officers or directors
of the Registrant from January 1, 1990 to December 31, 1997.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table contains information as of March 31, 1998 with respect
to beneficial ownership of the Registrant's Common stock by each person known by
the Registrant to be the beneficial owner of more than five percent thereof,  by
the  executive  officers and  directors of the  Registrant  and by all executive
officers and directors of the Registrant as a group:


                                           Common Stock
                                           Beneficially            Percent
                                           Owned (1)               of Class
                                           -------------           ----------
Thomas W. Itin                              7,599,293 (2)(3)(4)       56.3%

Anthony B. Cashen                             400,000 (4)              3.3%

Robert W. Schwartz                            100,000 (4)               .8%

Officers and Directors                      8,099,293 (3)             60.4%
as a group (3 persons)


James T. Emerson                              695,000                  5.7%
221 E. Colonial Drive
Orlando, FL  60605

      (1)  Without  giving  effect to the  exercise  of  outstanding  Warrants
           except as noted in footnote 4 below.

      (2)   These  shares are held of record by  entities of which Mr. Itin is
            either a principal or a beneficiary.
<PAGE>

      (3)   Includes 300,000 shares held by Mr. Itin's wife,  Shirley B. Itin,
            either as  beneficiary  or custodian,  of which Mr. Itin disclaims
            any beneficial ownership.

      (4)   These shares  include  warrants  granted on June 3, 1992  expiring
            December  4,  1998,  to  purchase  one share of  common  stock per
            warrant for $.04. (Thomas W. Itin,  1,000,000,  Anthony B. Cashen,
            200,000, Robert W. Schwartz, 100,000)


ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with Management and Others.

      None of the Registrant's  officers and directors devote their full time to
the Registrant's  affairs and such persons may be affiliated with other business
entities and  enterprises,  some of which may be formed for similar  purposes as
the  Registrant  and thus be in direct  competition  with the  Registrant.  Such
activities  may result in such persons  being  exposed to conflicts of interests
from time to time.  The  Registrant  has adopted no conflict of interest  policy
with respect to such  transactions.  However,  the officers and directors of the
Registrant  recognize their fiduciary obligation to treat the Registrant and its
shareholders fairly in any such future activities.

Certain Business Relationships.

      In the Registrant's last full fiscal year the Registrant made payments for
property and services in excess of five percent of the Registrant's consolidated
gross  revenues to Acrodyne,  a company whose  Chairman and President is a major
stockholder  of the  Registrant.  The Board of Directors of the  Registrant  has
reviewed  and  approved  the use of Acrodyne  and has  determined  that the fees
charged the  Registrant by Acrodyne are as favorable as could be incurred by any
other independent,  third party business consultant.  It is anticipated that the
Registrant will continue to utilize Acrodyne in the future.  The total sum which
the Registrant paid Acrodyne for the year ended December 31, 1997 was $1,880 for
the above mentioned consulting services and out-of-pocket travel expenses, staff
time spent for accounting,  record keeping,  and utilities,  but did not include
fees for services of the Chairman.





<PAGE>




                                     PART IV

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

(a) (1) Financial Statements

      The Financial Statements are listed in the "Index to Financial Statements"
filed as part of this Annual Report, on page F-2.

(a) (2) Financial Statement Schedules

      Supplementary   Financial   Schedules  for  which  provision  is  made  in
applicable  Regulations  of the Securities  and Exchange  Commission,  have been
omitted  or  the  required   information  is  not  required  under  the  related
instructions,  or the  information is presented in the Financial  Statements and
Notes thereto.

      Pursuant to the provisions of Rule 3-09 of Regulation  S-X, the Registrant
is required to file separate  audited  financial  statements of its equity basis
investee,  Ajay Sports, Inc. ("Ajay").  Ajay's audited financial  statements for
December 31, 1997 are filed within this report.

(a) (3)  Exhibits

The Articles of Incorporation and By-Laws of the Corporation are incorporated by
reference to the  Registrant's  Registration  Statement on Form S-18,  effective
December 16, 1987.

(b)   Reports on Form 8-K.

A Form 8-K was filed on July 14, 1997  regarding the extension of the expiration
date of the  Registrant's  warrants  from July 25, 1997 to July 25, 1998. A Form
8-K was  filed  on  December  1,  1997 to  extend  the  exercise  period  of the
Registrant's  warrants issued to its directors from December 4, 1997 to December
4, 1998.




<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, thereto duly authorized.


                                                      LBO CAPITAL CORP.
                                                      (Registrant)




                                          By: s\Thomas W. Itin
                                             --------------------------
                                              Thomas W. Itin, President
                                              & Chief Financial Officer

Date:  March 31, 1998


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities indicated on the (date)

Signature                                       Title
-------------------------                 ------------------------------------

 s\Thomas W. Itin                         Chairman of the Board of Directors,
-------------------------                 Chief Executive Officer and
Thomas W. Itin                            President


 s\Anthony B. Cashen                      Secretary, Treasurer and Director
-------------------------
Anthony B. Cashen


 s\Robert W. Schwartz                     Director
-------------------------
Robert W. Schwartz

<PAGE>




                                LBO CAPITAL CORP.








                                TABLE OF CONTENTS

                                                                          Page
Independent Auditor's Report

Financial Statements:

   Balance Sheets ........................................................  F2

   Statements of Operations ..............................................  F3

   Statements of Changes in Stockholders' Deficit.........................  F4

   Statements of Cash Flows ..............................................  F5

Notes to Consolidated Financial Statements ............................ F6-F10









<PAGE>












                          INDEPENDENT AUDITOR'S REPORT


Board of Directors
LBO Capital Corp.

We have  audited the  accompanying  balance  sheets of LBO Capital  Corp.  as of
December 31, 1997 and 1996, and the related statements of operations, changes in
stockholders'  deficit,  and cash flows for the years ended  December  31, 1997,
1996  and  1995.  These  financial  statements  are  the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits 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  account  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  financial  position  of LBO Capital  Corp.  as of
December 31, 1997 and 1996 and the results of its  operations and its cash flows
for the  years  ended  December  31,  1997,  1996  and 1995 in  conformity  with
generally accepted accounting principles.




-----------------------------
Hirsch & Silberstein, P.C.

Farmington Hills,  Michigan
March 24, 1998


                                       F1

<PAGE>
                                LBO CAPITAL CORP.
                                 BALANCE SHEETS
                        As of December 31, 1997 and 1996
<TABLE>
<CAPTION>

                             ASSETS                           1997             1996
                                                           ------------     ------------
<S>                                                     <C>               <C>

Current Assets
     Cash and Equivalents                                $          43    $          78
     Marketable Securities - Available for Sale                 24,929           28,765
                                                           ------------     ------------

     Total Current Assets                                       24,972           28,843

Other Assets
     Investments                                                    -0-              -0-
                                                           ------------     ------------

                  Total Assets                           $      24,972    $      28,843
                                                           ============     ============

                LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
     Accounts Payable                                    $       4,202    $       3,703
     Accounts Payable - Related Entities                         1,060              960
     Notes Payable - Other                                     506,971          501,791
     Accrued Expenses and Taxes                                 73,475           20,741
                                                           ------------     ------------

       Total Current Liabilities                               585,708          527,195


Stockholders' Deficit
     Common Stock, $.0001 Par Value
       Authorized 100,000,000 Shares:
       Issued and Outstanding 12,100,000
       in 1997 and 1996                                          1,210            1,210
     Additional Paid-In Capital                                623,094          623,094
     Unrealized (Loss) on Available for Sale Securities        (23,467)         (19,632)
     Accumulated Deficit                                    (1,161,573)      (1,103,024)
                                                           ------------     ------------

       Total Stockholders' Deficit                            (560,736)        (498,352)
                                                           ------------     ------------

         Total Liabilities and Stockholders' Deficit            24,972           28,843
                                                           ============     ============

</TABLE>

                        The accompanying notes are an integral
                           part of this financial statement

                                          F2
<PAGE>
                                LBO CAPITAL CORP.
                            STATEMENTS OF OPERATIONS
              For the Years Ended December 31, 1997, 1996, and 1995


<TABLE>
<CAPTION>

                                                 1997             1996            1995
                                              ------------     ------------    ------------
<S>                                         <C>              <C>             <C>

Revenues                                    $          -0-   $          -0-  $          -0-
                                              ------------     ------------    ------------

Expenses
     Professional Services                          3,820            3,351         (15,834)
     Management Fees                                2,900            3,410           4,780
     Depreciation and Amortization                     -0-              -0-          6,323
     Interest Expenses                             52,735           44,651          38,629
     Other Expenses                                  (906)             916           1,275
     (Gain) on Disposal of Fixed Assets                -0-              -0-             -0-
                                              ------------     ------------    ------------

         Total Expenses                            58,549           52,328          35,173
                                              ------------     ------------    ------------

Loss before Income Taxes                          (58,549)         (52,328)        (35,173)

Income Tax Expense                                     -0-              -0-             -0-

                                              ------------     ------------    ------------

Net Loss                                    $     (58,549)   $     (52,328)  $     (35,173)
                                              ============     ============    ============

Net Loss Per Share                          $       (0.00)   $       (0.00)  $       (0.00)
                                              ============     ============    ============

Weighted Average Number of                     12,100,000       12,100,000      12,100,000
     Common Shares Outstanding                ============     ============    ============










</TABLE>




                          The accompanying notes are an integral
                             part of this financial statement

                                            F3
<PAGE>
<TABLE>
<CAPTION>

                                                                LBO CAPITAL CORP.
                                                STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
                                                   For the Years Ended December 31, 1997, 1996, and 1995


                                                                                              Unrealized
                                                                                              (Loss) on
                                      Common Stock             Additional                     Available          Total
                               ---------------------------      Paid-In       Accumulated      For Sale      Stockholders'
                                 Shares          Amount         Capital        Deficit        Securities        Deficit
                               -----------     -----------     ----------     -----------     -----------    --------------

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

Balances at
     December 31, 1994         12,100,000  $        1,210  $     623,094  $   (1,015,523) $           -0- $       (391,219)

Net Loss for the Year
     Ended December 31, 1995           -0-             -0-            -0-        (35,173)           (702)          (35,875)
                               -----------     -----------     ----------     -----------     -----------    --------------

Balances at
     December 31, 1995         12,100,000  $        1,210  $     623,094  $   (1,050,696) $         (702) $       (427,094)

Net Loss for the Year
     Ended December 31, 1996           -0-             -0-            -0-        (52,328)        (18,930)          (71,258)
                               -----------     -----------     ----------     -----------     -----------    --------------

Balances at
     December 31, 1996         12,100,000  $        1,210  $     623,094  $   (1,103,024) $      (19,632) $       (498,352)

Net Loss for the Year
     Ended December 31, 1997           -0-             -0-            -0-        (58,549)         (3,835)          (62,384)
                               -----------     -----------     ----------     -----------     -----------    --------------

Balances at
     December 31, 1997         12,100,000  $        1,210  $     623,094  $   (1,161,573) $      (23,467) $       (560,736)
                               ===========     ===========     ==========     ===========     ===========    ==============








                                          The accompanying notes are an integral
                                             part of this financial statement

                                                            F4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                 LBO CAPITAL CORP.
                                              STATEMENTS OF CASH FLOWS
                                  For the Years Ended December 31, 1997, 1996, and 1995


                                                   1997               1996               1995
                                                -----------        -----------         ----------

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

Cash Flow From Operating Activities
    Net Loss                                  $    (58,549)      $    (52,328)       $   (35,173)
                                                -----------        -----------         ----------
    Adjustment to Reconcile Net Loss to
      Net Cash Provided by (Used For)
      Operating Activities
         Depreciation and Amortization                  -0-                -0-             6,323
      (Increase) Decrease In:
         Prepaid Expenses and Deposits                  -0-               173               (122)
      Increase (Decrease) In:
         Accounts Payable                              499             (2,371)           (29,849)
         Accrued Expenses and Taxes                 52,836             17,231            (18,660)
                                                -----------        -----------         ----------

           Total Adjustments                        53,335             15,033            (42,308)
                                                -----------        -----------         ----------

           Net Cash Used For Operations             (5,214)           (37,295)           (77,481)
                                                -----------        -----------         ----------

Cash Used For Investing Activities
      Purchase of Marketable Securities                 -0-           (39,695)                -0-
                                                -----------        -----------         ----------

           Net Cash Used For
             Investing Activities                       -0-           (39,695)                -0-
                                                -----------        -----------         ----------

Cash Provided by (Used For)  Financing Activities
         Payments on Notes - Related                    -0-                -0-            (5,953)
         Payments  on Notes -  Bank                     -0-          (325,000)                -0-
         Payments  on Notes - Other                     -0-                -0-          (242,299)
         Proceeds from Notes - Other                 5,180            401,990                 -0-
         Proceeds from Notes - Bank                     -0-                -0-           325,000
                                                -----------        -----------         ----------

           Net Cash Provided By
           Financing Activities                      5,180             76,990             76,748
                                                -----------        -----------         ----------

Decrease in Cash and Equivalents                       (35)                 0               (733)

Cash and Equivalents at Beginning of Year               78                 78                811
                                                -----------        -----------         ----------

Cash and Equivalents at End of Year           $         43       $         78        $        78
                                                ===========        ===========         ==========


                             The accompanying notes are an integral
                                part of this financial statement

                                               F5
</TABLE>
<PAGE>



                                LBO CAPITAL CORP.

                          NOTES TO FINANCIAL STATEMENTS
                        December 31, 1997, 1996 and 1995




Note 1. Summary of Significant Accounting Policies

      Organization and Business

            LBO Capital Corp. (the  "Company") was  incorporated on October 8,
            1987  under  the laws of the State of  Colorado.  The  Company  is
            engaged  in  evaluating  and  investing  in other  companies.  The
            Company was considered to be in the development  stage in 1987 and
            began operations on March 15, 1988.

      Cash Equivalents

            The  Company  considers  all  highly  liquid  investments  with  a
            maturity of three months or less cash equivalents.

      Equipment and Depreciation

            Equipment  was  stated  at cost.  Depreciation  was  computed  for
            financial  reporting  purposes  on a  straight-line  basis over an
            estimated  life of 5 years.  Depreciation  expense  for the  years
            ended  December  31,  1997,  1996 and 1995 was $0,  $0 and  $6,323
            respectively.   At  December  31,  1995,  the  remaining  computer
            equipment   that  was   previously   leased  to  an  investee  was
            determined  to be  obsolete  and  written  off  the  books  of the
            Company.

      Income Taxes

            At  December  31,  1997,  the  Company  has a net  operating  loss
            available for carryforward totaling  approximately  $903,878.  The
            operating  loss  carryforward  expires in  various  amounts by the
            year ended December 31, 2012.


                                       F6
<PAGE>


      Net Loss Per Share

            Net loss per  share is  computed  using  weighted  average  shares
            outstanding  without  giving effect to the common stock  warrants,
            as the effect would be antidilutive.

Note 2. Marketable Securities

      The Company's  marketable  securities available for sale are recorded at
      fair market value.

                                         Market Value
                           ----------------------------------------
                           Investment     Per Share     Aggregate
      1997
      -------
      Enercorp, Inc.          $48,397         $1.625        $24,929

      1996
      -------
      Enercorp, Inc.          $48,397         $1.875        $28,765



Note 3. Investments

      On April 3,  1989,  the  Company  acquired  an  aggregate  of  1,880,000
      restricted  common  shares of Ajay  Sports,  Inc.  ("Ajay")  for a total
      purchase  price of  $182,000.  As a result of  recording  the  Company's
      equity in net losses of Ajay, the carrying  value of this  investment is
      zero at December 31, 1996 and 1995.  The Company also  obtained  200,000
      stock  warrants of Ajay at that time.  Each warrant  enables the Company
      to  purchase   one  share  of  Ajay  common   stock  at  $2.40  and  was
      subsequently  reduced to $.34 per share.  These warrants expire June 13,
      1999.


                                       F7
<PAGE>

      In  March  1991,  the  Company   pledged  400,000  shares  of  its  Ajay
      investment as security for bank loans to an  acquisition  candidate.  On
      June, 1, 1991,  the bank declared the loan in default and  foreclosed on
      the shares.


      All of the Ajay shares are pledged as security  for a note  payable (see
      note 4).

      The  stock of Ajay is traded  over-the-counter  and is  reported  by the
      National  Quotation  Service.  The following  table sets forth the range
      of high and low trade prices given quarterly by NASDAQ.


                                      HI         LOW
                                   -------     -------
            1997
            -----
            First Quarter          $  .31      $  .16
            Second Quarter         $  .34      $  .13
            Third Quarter          $  .28      $  .19
            Fourth Quarter         $  .34      $  .13

Note 4. Notes Payable

      During 1997, the Company borrowed $5,180 from Dearborn Wheels,  Inc. The
      proceeds were used to meet current operating needs.

      On  December  2,  1996,  the  Registrant  had a change in its  borrowing
      arrangements.  The Registrant  borrowed  $325,790 from Dearborn  Wheels,
      Inc. to repay a note payable to Michigan  National  Bank.  The principal
      balance as of December  31,  1997,  was  $506,971.  The loan is at prime
      plus 2%  interest  and is  secured by all the  intangible  assets of the
      Registrant.   Dearborn   Wheels,   Inc.  is  held  in  majority  by  the
      Registrant's  President's  spouse.  This note  bears  interest  of prime
      plus 2%,  matures on August 26, 1998 and is secured by all the assets of
      the Company.

                                       F8

<PAGE>

Note 5. Capital Stock

      The Company  completed a public offering on March 15, 1988 consisting of
      3,000,000  units at $.20 each.  Each unit consisted of one common share,
      one callable class A common stock purchase  warrant,  one callable Class
      B common stock  purchase  warrant and one callable  Class C common stock
      purchase  warrant.  Each Class A warrant  entitles the warrant holder to
      purchase  one share of  common  stock  for  $.50,  each  Class B warrant
      entitles  the warrant  holder to purchase  one share of common stock for
      $.75,  and each  Class C common  stock  purchase  warrant  entitles  the
      warrant  holder to purchase one share of common for $1.00.  The Class A,
      B and C warrants were  originally  exercisable  within twelve,  eighteen
      and  twenty-four  months  respectively,  from  February  26,  1988.  All
      warrants  have been  extended  until July 25,  1998.  As of December 31,
      1997,  no  warrants  had been  exercised.  The  Company has the right to
      call any or all warrants at a redemption price of $.0001 per warrant.

      On June 3,  1992 the  Company  issued  3,000,000  shares  of its  common
      stock,  valued at $.04 per share (fair  market  value on that date,  per
      the  National  Quotation  Bureau,  Inc.),  to an officer and director in
      exchange for a reduction  of $120,000 in a note to a related company.

      The  Company  granted to its  directors a total of  1,300,000  warrants,
      expiring  December 4, 1998.  Each warrant  enables the owner to purchase
      one share of common stock for $.04 per share.

Note 6.  Management Fees

      The  Company  does  not  employ  any  personnel.  Per a  management  fee
      agreement with Acrodyne Corporation,  a related entity, the Company pays
      direct labor costs plus overhead for management services rendered.

Note 7.  Cash Flows Disclosure

      Interest  and income  taxes paid for the years ended  December 31, 1997,
      1996 and 1995 were as follows:

                          1997                1996              1995
                    ------------           ----------         ----------
      Interest      $        -0-           $  27,420          $  57,878
                    ============           ==========         ==========

      Income Taxes  $        -0-           $     -0-          $     -0-
                    ============           ==========         ==========

                                       F9

<PAGE>

Note 8.  Use of Estimates

      The  preparation  of financial  statements in conformity  with generally
      accepted  accounting  principles  requires  management to make estimates
      and assumptions  that affect certain  reported  amounts and disclosures.
      Accordingly, actual results could differ from those estimates.



                                      F10

<PAGE>
                       AJAY SPORTS, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets
                        as of December 31, 1997 and 1996
                      (in thousands, except share amounts)
<TABLE>
<CAPTION>

ASSETS                                                                          December 31,       December 31,
                                                                                    1997               1996
                                                                               ----------------   ----------------
<S>                                                                         <C>                   <C>
Current assets:
     Cash                                                                    $             234  $              64
     Accounts receivable, net of allowance of $243 and $140,
         respectively                                                                    5,060              5,274
     Inventories                                                                         6,398              7,957
     Prepaid expenses and other                                                            304                362
     Deferred tax benefit                                                                  363                363
                                                                               ----------------   ----------------

            Total current assets                                                        12,359             14,020

Fixed assets, net                                                                        1,723              1,822
Other assets                                                                               106                320
Deferred tax benefit                                                                       756                756
Goodwill                                                                                 1,670              1,709
                                                                               ----------------   ----------------

            Total assets                                                     $          16,614  $          18,627
                                                                               ================   ================

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
     Notes payable to affiliates                                             $             160  $             885
     Notes payable to banks                                                                107              6,104
     Current portion of capital lease                                                        4                  9
     Accounts payable                                                                    3,204              3,107
     Accrued expenses                                                                      684                567
                                                                               ----------------   ----------------

            Total current liabilities                                                    4,159             10,672

Notes payable to affiliates  -  long term                                                4,212                 -0-
Notes payable to banks - long term                                                       9,017              5,213
Commitments and contingencies                                                               -0-                -0-
                                                                               ----------------   ----------------
                                                                                        17,388             15,885
                                                                               ----------------   ----------------
Stockholders' equity (deficit):
     Preferred stock - 10,000,000 shares authorized
         Series B, $0.01 par value, 12,500
            shares outstanding at liquidation value                                      1,250              1,250
         Series C, $10.00 par value, 296,170 shares
            outstanding at stated value                                                  2,962              2,962
     Common stock, $0.01 par value, 100,000,000 shares authorized,
         23,274,039 shares outstanding                                                     233                233
     Additional paid-in capital                                                          9,313              9,313
     Accumulated deficit                                                               (14,532)           (11,016)
                                                                               ----------------   ----------------

            Total stockholders' equity (deficit)                                          (774)             2,742
                                                                               ----------------   ----------------

Total liabilities and stockholders' equity                                   $          16,614  $          18,627
                                                                               ================   ================

              The accompanying notes are an integral part of the consolidated financial statements.

                                                          F-2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                          AJAY SPORTS, INC. AND SUBSIDIARIES
                                                          Consolidated Statements of Operations
                                                       for the years ended December 31, 1997, 1996 and 1995
                                                           (in thousands, except per share amounts)

                                                                                    Year Ended
                                                               ------------------------------------------------------
                                                                December 31,       December 31,        December 31,
                                                                    1997               1996                1995
                                                               ----------------   ----------------    ---------------
<S>                                                         <C>                 <C>                   <C>
Operating data:
     Net sales                                               $          30,330  $          24,341   $         18,728
     Cost of sales                                                      26,585             20,759             15,291
                                                               ----------------   ----------------    ---------------
         Gross profit                                                    3,745              3,582              3,437
     Selling, general and administrative expenses                        5,837              5,067              3,247
                                                               ----------------   ----------------    ---------------

     Operating income (loss)                                            (2,092)            (1,485)               190
                                                               ----------------   ----------------    ---------------

Nonoperating income (expense):
     Interest expense - net                                             (1,280)            (1,103)              (801)
     Other, net                                                           (144)               (38)               (41)
                                                               ----------------   ----------------    ---------------

     Total non operating expense                                        (1,424)            (1,141)              (842)
                                                               ----------------   ----------------    ---------------

Income (loss) before income taxes                                       (3,516)            (2,626)              (652)

Income tax expense (benefit)                                                -0-              (893)              (208)
                                                               ----------------   ----------------    ---------------

Net loss                                                     $          (3,516) $          (1,733)  $           (444)
                                                               ================   ================    ===============

Basic and diluted earnings per share                         $            (0.17)$           (0.09)  $          (0.03)
                                                               ================   ================    ===============

Weighted average common and common stock
     equivalent shares outstanding                                      23,274             23,242             22,722
                                                               ================   ================    ===============






















               The accompanying notes are an integral part of the consolidated financial statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                     AJAY SPORTS, INC. AND SUBSIDIARIES
                 Consolidated Statements of Stockholders' Equity for the years ended December 31, 1997, 1996 and 1995
                                                    (in thousands, except shares)



                                          Preferred Stock           Common Stock                                           Total
                                        -----------------------------------------------  Add'l Paid-in     Accum       Stockholders-
                                          Shares     Amount       Shares        Amount      Capital      (Deficit)         Equity
                                        ----------- ---------  --------------  --------- --------------  ----------- ---------------
<S>                                     <C>           <C>      <C>             <C>       <C>             <C>         <C>
Balances at January 1, 1995                 12,500     1,250      22,533,637 $      225          8,961 $     (8,401)          2,035

Common stock issued to ESOP                 -          -              12,000         -               4            -               4

Stock issued to fund acquisition            -          -             895,054          9            572            -             581

Common stock issued to affiliate
  for acquisition services                  -          -             100,000          1             37            -              38

Common stock issued in lieu of
  wages to officer                          -          -              34,000          1              9            -              10

Preferred stock public offering            325,000     3,250         -                -           (386)           -           2,864

Preferred stock converted into
  common stock                             (11,210)     (112)        163,055          2            110            -               -

Common shares received as
  an acquisition cost adjustment            -          -            (400,000)        (4)          (184)           -            (188)

Dividends                                   -          -             -            -            -               (136)           (136)

Net loss                                    -          -             -            -            -               (444)           (444)
                                        ----------- ---------  --------------  --------- --------------  ----------- --------------

Balances at December 31, 1995              326,290     4,388      23,337,746        234          9,123       (8,981)          4,764

Common shares received as an
  acquisition incentive adjustment          -          -            (350,000)        (3)             4       -                   -

Preferred stock converted into
  common stock                             (17,620)     (176)        256,293          2            174       -                   -

Stock option exercise                       -          -              30,000      -                 12       -                  12

Dividends                                   -          -             -            -            -               (301)           (301)

Net loss                                    -          -             -            -            -             (1,733)         (1,733)
                                        ----------- ---------  --------------  --------- --------------  ----------- ---------------

Balances at December 31, 1996              308,670     4,212      23,274,039        233          9,313      (11,015)          2,742

Net loss                                    -          -             -            -            -             (3,516)         (3,516)
                                        --------------------------------------------------------------------------------------------

Balances at December 31, 1997              308,670  $  4,212      23,274,039 $      233  $       9,313 $    (14,531)           (774)
                                        =========== =========  ==============  ========= ==============  ===========  ==============

                        The accompanying notes are an integral part of the consolidated financial statements.


</TABLE>


                                                           F-4
<PAGE>
<TABLE>
<CAPTION>
                                                       AJAY SPORTS, INC. AND SUBSIDIARIES
                                                      Consolidated Statements of Cash Flows
                                                   for the years ended December 31, 1997, 1996 and 1995
                                                                           (in thousands)



                                                                                  1997            1996            1995
                                                                               ------------    ------------   -------------
<S>                                                                            <C>             <C>            <C>
Cash flows from operating activities:

     Net loss                                                                $      (3,516)  $      (1,733) $         (444)
     Adjustments to reconcile to net cash flows from operating
         activities:
     Loss on sale of assets                                                             42               6              -0-
     Depreciation and amortization                                                     358             366             219
     (Increase) decrease in accounts receivable, net                                   214             (78)         (3,496)
     (Increase) decrease in inventories                                              1,559             952          (3,123)
     (Increase) in deferred tax benefits                                                -0-           (911)           (208)
     (Increase) decrease in prepaid expenses                                            58               3            (154)
     (Increase) decrease in other assets                                               202             (84)            (66)
     Increase in accounts payable                                                       97             945             852
     Increase (decrease) in accrued expenses                                           186             (64)            141
                                                                               ------------    ------------   -------------

         Net cash (used in) operating activities                                      (800)           (598)         (6,279)
                                                                               ------------    ------------   -------------

Cash flows from investing activities:

     Acquisitions of property plant and equipment                                     (250)           (276)           (787)
     Goodwill associated with acquisitions                                              -0-           (387)         (1,329)
     Proceeds from sale of equipment                                                    -0-             -0-              5
     Disposal of equipment                                                              -0-            (29)             -0-
                                                                               ------------    ------------   -------------

         Net cash (used in) investing activities                                      (250)           (692)         (2,111)
                                                                               ------------    ------------   -------------

Cash flows from financing activities:

     Proceeds from issuance of notes payable to affiliates                           3,487             885              -0-
     Net increase (decrease) in bank notes payable                                  (2,193)            396          10,777
     Payments on notes payable - affiliate                                              -0-             -0-         (5,369)
     Dividends paid                                                                    (74)           (301)            (58)
     Proceeds from preferred stock offering, net of related costs                       -0-             -0-          2,864
     Stock issued in acquisitions                                                       -0-             -0-            433
     Stock options exercised                                                            -0-             12              -0-
                                                                               ------------    ------------   -------------

         Net cash provided by financing activities                                   1,220             992           8,647
                                                                               ------------    ------------   -------------

Net increase (decrease) in cash                                                        170            (298)            257

Cash at beginning of period                                                             64             362             105
                                                                               ------------    ------------   -------------
                                                                                                              -------------

Cash at end of period                                                        $         234   $          64  $          362
                                                                               ============    ============   =============




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

                                                           F -5

<PAGE>