U.S. SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549
                                
                                
                           FORM 10-KSB
                                
                                

[X]  ANNUAL  REPORT  UNDER  SECTION 13 OR 15  OF  THE  SECURITIES
     EXCHANGE ACT OF 1934

     For the fiscal year ended December 31, 1996
     
[  ] TRANSITION  REPORT UNDER SECTION 13 OR 15 OF THE  SECURITIES
     EXCHANGE ACT OF 1934

               Commission file number:  2-94117-D
                                
                                
                               Eclipse Corporation
                 ----------------------------------------------
                 (Name of small business issuer in its charter)
                                
           COLORADO                                       84-0867911
  (State or Other Jurisdiction                        (I.R.S. Employer
 of Incorporation or Organization)                   Identification No.)
 
               
Holly Sugar Building, Suite 330, 2 N. Cascade Avenue,Colorado Springs,CO  80903
                     (Address of Principal Executive Office)          (Zip Code)
                                
                    Issuer's telephone number: (719) 520-1800
                                
     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 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 ___

Check if there is no disclosure of delinquent  filers in response to Item 405
of Regulation S-B 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. [ X ]

State   issuer's  revenues  for  its  most  recent  fiscal  year:  $ 705,279
                                                                   ---------
     The  aggregate  market  value of the voting  stock held by non-  affiliates
(40,769,400  shares of Common Stock) was  $774,618.60  as of March 11, 1997. The
stock price for computation purposes was $0.019, based on the closing sale price
for the  Registrant's  Common  Stock on NASDAQ OTC  Bulletin  Board on March 11,
1997. This value is not intended to be a representation as to the value or worth
of  the   Registrant's   shares  of  Common  Stock.  The  number  of  shares  of
non-affiliates of the Registrant has been calculated by subtracting  shares held
by persons affiliated with the Registrant from outstanding  shares. For purposes
of this calculation,  each of the Registrant's  officers,  directors and persons
holding 5% or more of the outstanding Common Stock is deemed to be an affiliate.
The number of shares  outstanding of the  Registrant's  Common Stock as of March
11, 1997 was 87,349,400 shares.
<PAGE>

                              ECLIPSE CORPORATION
                                
                             INDEX TO ANNUAL REPORT
                                 ON FORM 10-KSB
                                
                                                             Page
                                                                 
PART I

     Item 1. DESCRIPTION OF BUSINESS  .......................         3

     Item 2. DESCRIPTION OF PROPERTIES  .....................         7

     Item 3.  LEGAL PROCEEDINGS .............................         8

     Item 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER        8

PART II

     Item 5.MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED
            STOCKHOLDER MATTERS .............................         8

     Item 6.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION AND RESULTS OF OPERATIONS .............         9

     Item 7. FINANCIAL STATEMENTS  ..........................        11

     Item 8.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
            ACCOUNTING AND FINANCIAL DISCLOSURE .............        11

PART III

     Item 9.DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
               PERSONS  -  COMPLIANCE WITH  SECTION  16(a)  OF  
               THE EXCHANGE ACT  .............................       11

     Item 10.  EXECUTIVE COMPENSATION  .......................       13

     Item 11.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT .......................................       13

     Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS         14

     Item 13. EXHIBITS AND REPORTS ON FORM 8-K  ...............      17

<PAGE>
                             PART I
                                
                                
Item 1.  DESCRIPTION OF BUSINESS

     (a) Business Development.  
     -------------------------  

     Eclipse Corporation, a Colorado corporation  (the"Company"),  was organized
on December  8, 1981,  under the name,  "Microtech  Medical  Systems,  Inc." The
Company  initially  engaged  in  the  development,  assembly  and  marketing  of
microdilution  test  panels  used  by  microbiology  laboratories,  clinics  and
doctors'   offices  in   performing   antibiotic   susceptibility   testing  and
identification of bacteria procedures.

     On October 10, 1996 the  Company's  shareholders  approved  the sale of its
medical-related   enterprises  in  connection  with  the  Company's  entry  into
manufactured  housing,  real estate, and related  businesses.  At that time, the
Company  changed  its name to Eclipse  Corporation.  The  Company  is  currently
engaged in the  development,  marketing  and sale of  manufactured  housing  and
subdivision lots designed and designated for manufactured housing.

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

     The Company is operating as a dealer of  manufactured  homes,  directly and
through  sub-dealers,  and  as a  developer  of  subdivisions  catering  to  the
manufactured  housing  industry.  The  Company,  until  the sale of its  medical
industry related business,  also developed,  assembled and marketed medical test
kits.

Prior Medical Test Kit Business

     The Company  entered into an asset purchase  agreement  dated June 27, 1996
with the  Company's  prior  manager,  Jerry G.  Kilgore,  pursuant  to which the
Company  sold its medical test kit business to Mr.  Kilgore  effective  June 12,
1996.  Since June 12, 1996 the subject  line of business  has been  treated as a
discontinued  operation.   The  sale  of  the  medical  test  kit  manufacturing
operation,  including licenses, inventories and operating assets was approved by
the Company's  shareholders on October 10, 1996. Under present  management,  the
Company  entered  the  real  estate  industry,  with  particular  emphasis  upon
manufactured housing.

     The Company's name was changed to Eclipse Corporation following shareholder
approval of October 10, 1996 and the Company's  executive offices relocated to 2
N. Cascade Avenue, Holly Sugar Building, Suite 330, Colorado Springs, CO, 80903.
The telephone number is 719/520-1800 and the telecopy number is 719/520-1824.

Real Property Development - Community at Bear Creek
     
     On September 30, 1996, the Company  purchased 30 platted and  approximately
25 unplatted lots located in the Community at Bear Creek in Colorado Springs, El
Paso County, Colorado. The Community at Bear Creek is a subdivision specifically
zoned for  manufactured  housing.  The Company has models on display and a sales
facility  located  within the  subdivision.  The  property  was  acquired by the
Company from Glacier Valley Holding  Corporation in  consideration  of $700,000,
consisting of the assignment of negotiable instruments and contracts in the face
value of $230,000,  and the issuance of 6,250,000  shares of  restricted  common
stock in the Company,  and the assumption of a note in the amount of $303,973.00
secured by a Deed of Trust upon the property.  The subdivision is located on the
west side of Colorado Springs, Colorado in a scenic area.

     Products and Services

     Subdivision  lots located at Bear Creek are  anticipated to be specifically
designed  and  platted  to  accommodate   manufactured  homes.  These  lots  are
anticipated  to be integrated  into the broader  Community at Bear Creek,  which
includes common areas and other amenities,  as well as a homeowners' association
to  provide  and  maintain  such  amenities.  The  homeowners'  association  has
previously been established at an adjacent portion of the development.

     Development

     The Company intends to complete final  construction  and development of the
lots located in its portion of the  Community  at Bear Creek during 1997.  Based
upon preliminary  construction  budget estimates obtained by the Company,  it is
currently  estimated that the lot development will require $500,000 to complete.
While the Company  currently  has assets which could be  converted  into working
capital  for such  development,  the  Company is  actively  seeking  alternative
financing in the form of equity  investments and/or the incurrence of additional
debt.  There can be no  assurance  that the Company  will be able to obtain such
financing,  however.  Additionally,  there is no assurance  that the lots can be
sold  for the  projected  price,  although  the  Company  anticipates  that  the
Company's portion of the Community at Bear Creek, when developed,  will generate
an approximate cash flow of $700,000.

     The Company is currently examining the possibility of acquiring  additional
portions of the Community at Bear Creek.  The Company intends to market the lots
through its on-site models, sales office and through advertising.

     Major Customers

     The Company  anticipates its major customers will fall into two categories.
The first category is other  manufactured  housing  dealers who have  previously
purchased lots located within the Community at Bear Creek and other manufactured
housing  dealers who wish to do so.  Typically,  sales to  manufactured  housing
dealers are made in blocks of several  lots per  transaction  to dealers who are
motivated  to create  additional  outlets for  manufactured  housing  units sold
through  their  dealerships.  The second  group of  customers  which the Company
anticipates  are  those  resulting  from  direct  sales  through  the  Company's
manufactured housing dealership division discussed below.

     Government Regulation

     A portion of the lots purchased by the Company  located in the Community at
Bear Creek are  already  platted in sizes  designed to  accommodate  double- and
triple-wide  manufactured houses. The remaining lots acquired by the Company are
currently  platted as  single-wide  lots.  The Company is  currently  filing new
applications  with  governmental  authorities  to  re-plat  that  portion of the
project  acquired  for  purposes  of lot sizes,  road  re-alignment,  etc.  [The
Company's  final  development  plans are currently being reviewed the by City of
Colorado  Springs  Planning,  Development and Finance  Department prior to their
implementation.  Presently,  the City of Colorado  Springs has not agreed to the
specific  plans  proposed by the Company.  However,  the Company feels that such
approval will be forthcoming.  Such governmental approval may require alteration
in the Company's  development plans, and there is no assurance that approval, if
obtained, will not require the Company to incur increased development costs.]

     Competition

     The Company faces  competition from the existing Phase I development of the
Community at Bear Creek,  as well as potential of  additional  available  ground
development  at the  Community at Bear Creek.  Competition  comes from  existing
companies with lots or potential lots in nearly the same location as those owned
by the  Company.  There can be no  assurance  that the  Company  will be able to
competitively price its lots with those owned by other developers. Additionally,
the  Community  at  Bear  Creek,  in  general,   faces  competition  from  other
manufactured home communities and individual real estate parcel sales located in
areas adjacent to or near the City of Colorado  Springs,  as well as competition
from  builders of  traditionally-built  houses which are also able to compete in
the low-end housing market (under $125,000).

     Business Outlook

     In the last few years,  the demand for  manufactured  housing has increased
within the United States and, particularly,  within the El Paso County area. The
Company feels the potential for the low cost housing  market within its targeted
region  will  continue  to be  strong.  The  lots  owned by the  Company  at the
Community  at Bear Creek will  permit home sales in the  under-$125,000  market.
First  home  buyers  and  seniors  appear  to be  the  most  likely  prospective
purchasers  at this  time.  Accordingly,  the  Company  intends to  continue  to
emphasize  the area of  manufactured  housing,  and, to that end, the Company is
currently reviewing the feasibility of acquiring additional manufactured housing
subdivisions or  participating  in additional  business  ventures in the area of
manufactured  housing  through  mergers,  acquisitions,  joint ventures or other
business related transactions.  The Company has reviewed several such prospects,
but has not entered into any agreements or letters of intent to acquire or merge
with any particular company. The Company has not conducted, nor have others made
available to it, results of any market research studies which show the Company's
contemplated business activities to be capable of further implementation.

     In the event the  Company is unable to complete a  merger/acquisition,  the
Company will  continue to use its best efforts to market and expand its existing
subdivision.  There can be no assurance  that the Company will be  successful in
the acquisition or development of new subdivisions or have sufficient  resources
to do so.

Manufactured Housing Dealership

     The Company has acquired a manufactured  housing  dealership.  On August 1,
1996,  the Company  entered into an agreement  with  Columbine Home Sales llc to
manage its manufactured  housing dealership.  Subsequently,  pursuant to option,
the  Company  acquired  portions of the assets of  Columbine  Home Sales llc and
became a  full-fledged  manufactured  housing  dealer on November  1, 1996.  The
manufactured housing dealership was acquired by the Company for a total purchase
price of $289,074.91, consisting of the following:
     
     1.   13,500,000  shares of restricted Common  Stock  of  the
          Company;
     2.   $29,000 cash;
     3.   $14,151.63 management fee forgiveness; and
     4.   $95,873.38, representing future adjustable proceeds from
          the  sale  of certain manufactured homes acquired  from
          the seller.
     
     For  purposes of  determining  the  purchase  price,  the fair market value
assigned  by the  Company to the  restricted  Common  Stock of the  Company  was
determined by the Board to be $.011 per share. The Company  additionally granted
the seller a  three-year  option to  purchase  additional  shares of  restricted
Common Stock of the Company up to 13,500,000 shares at $.035 per share.

     Products and Services

     The Company's  manufactured  home  dealership  division is a dealer for the
following manufacturers:  Silver Crest, Western Homes Construction,  Palm Harbor
Homes,  Masterpiece Homes,  Redman Homes,  Cavco Litchfield,  Guerdon Homes, Oak
Creek Homes, American Homestar  Corporation,  Silver Creek Homes, Showcase Homes
and Perfect Steel Systems.  It has floorline credit financing  through Greentree
Financial  Services,  Inc., and Deutsche  Financial  Services  Corporation.  The
Company's  manufactured home dealership has sub-dealer  agreements with Grantham
Realty of Ordway,  Colorado, and Outpost Homes Company of Walsenburg,  Colorado.
The Company's sales and services with respect to manufactured homes are centered
around its models located at the Community at Bear Creek discussed above, and at
its retail lot facility located in Colorado Springs,  Colorado, which houses its
office for manufactured housing sales, as well as model show homes.

     Product Development

     The Company has an on-going  program of developing and updating its product
line to improve its sales and to increase its regional share of the manufactured
home market. The Company maintains contact with major  manufacturers in order to
broaden not only the  sources,  but also the  availability,  of new and existing
products.  The Company is also  intending to increase the number of  sub-dealers
with which it has  contractual  relations  in order to maintain or increase  its
competitive  position within the regional  manufactured  housing  industry.  The
Company feels  failure to do so would have a negative  effect upon the Company's
ability to increase  sales.  As the Company is dependent upon its  relationships
with   manufacturers,   the  importance  of  broadening  the   availability   of
manufacturer's  represented  is  significant,  especially in view of the need of
supply sources during periods of maximum  activity in seasonal home business.  A
broad  source of supply  enables  the Company to  conserve  working  capital and
reduces its dependence  upon floorline  financing in order to assure its ability
to meet customer requirements and a variety of products to offer.

     Major Customers

     The  Company is  presently  not  dependent  on any major  customers  in its
manufactured housing division.

     Competitive Conditions

     The manufactured  housing  dealership  industry is characterized by intense
competition   involving  many  companies  which  have  extensive  experience  as
manufactured housing dealers and which possess  substantially  greater financial
and personnel resources than the Company. At present, the Company's  competitive
position in the regional market is not  significant.  The Company believes it is
competitive in the local Colorado Springs market, due in part to its combination
of subdivision  development discussed above and manufactured housing dealership.
The Company currently is under contract with a construction company specializing
in the  installation  of  manufactured  homes  which it feels  makes its overall
pricing more competitive.

     In marketing its  products,  the Company  faces  competition  from existing
companies with products which are similar,  such as manufactured houses,  mobile
and modular homes and traditionally- built structures, and there is no assurance
that  the  Company  will  be  able  to  retain  its  dealership  relations  with
manufacturers  listed  above or  maintain or expand its  sub-dealer  network The
Company's direct El Paso County competitors include the following: Seeger Homes,
Inc., Willmax Homes of Colorado, Nationwide Homes and Westar/American Homestar .

     Business Outlook and Company Diversification Efforts

     The Company has a stated goal of further  developing  its business  through
the vertical  integration of other aspects of the manufactured housing industry.
Accordingly,  it is the  Company's  intent  to  seek  merger  or  joint  venture
opportunities with manufacturers of homes,  obtain additional  sub-dealers,  and
become  positioned  in the  finance  industry to enable it to finance the retail
purchaser of manufactured  houses in their  acquisitions of products  offered by
the company.  Additionally,  the Company is seeking to acquire,  to merger or to
establish  joint  ventures  with  companies  which  utilize,  as a part of their
product, the pre- manufactured housing units in their industry.

     In the near  term,  the  emphasis  of the  Company  will be in the areas of
acquiring and developing  additional  manufactured  housing subdivisions and the
expansion of its subdealership network.

     Employees

     The Company has 3 full-time employees and 1 part-time or contract employee.

Item 2.  DESCRIPTION OF PROPERTIES

Sales Lot
     
     The Company leases  approximately 4.5 acres for its model display and sales
office complex located at 4326 N. Nevada, Colorado Springs,  Colorado, at a cost
of  approximately  $6,000  per month  from two  separate  lessors.  The  Company
believes  this facility is adequate to handle its current  manufactured  housing
sales and service needs and is in good condition for that purpose.

Model Homes
     
     The Company owns two lots with model homes upon a portion of the  Community
at Bear Creek  adjacent to its  existing  subdivision  development  as discussed
above in Item 1.

Community at Bear Creek
     
     The Company owns 30 platted and  approximately 25 unplatted lots located in
the Community at Bear Creek in Colorado Springs,  El Paso County,  Colorado,  as
more fully discussed above in Item 1.
     
     Investments in Real Estate or Interests in Real Estate
     
     The  Company  has  invested  and  intends to seek  further  investments  in
subdivisions which may be utilized for manufactured  housing.  The Company feels
that the development of such  subdivisions  and related real estate best enhance
and expand the Company's  manufactured  housing  dealership.  Additionally,  the
availability of manufactured  structures enhance and accelerate the sale of lots
located in subdivisions designed for manufactured housing upon which the Company
intends to concentrate.  The Company initially intends to emphasize the regional
Colorado  market,  which  can best be  serviced  by the  Company's  manufactured
housing  dealership  and  the  Company's  subdealers.  The  Company  has  used a
combination  of equity and debt  financing with respect to its Community at Bear
Creek  subdivision,  and proposes to continue the  acquisition  of  subdivisions
utilizing such methodology.
     
     Description of Real Estate and Operating Data
     
     The  property,  which is currently  composed of developed  and  undeveloped
lots,  is to be sold to  owners  of or  dealers  in  manufactured  housing.  The
developed lots are currently being marketed for the foregoing  purpose while the
Company is in the process of completing  engineering and obtaining  governmental
approvals for the development of the undeveloped lots, as discussed in Item 1.
     
     The Company currently holds fee simple title to the Community at Bear Creek
property,  and the  encumbrance  thereon  is a note  payable  in the  amount  of
$303,793.00,  bearing  interest at 15.5% per annum,  payable in monthly interest
only payments of $3,923.99, with final principal and interest due July 25, 1997.
The note is  collateralized by a First Deed of Trust on the Company's Bear Creek
Subdivision property.
     
     Present  plans  of  the  Company  for  the   development  of  the  existing
undeveloped  portion of the Company's property of the Community at Bear Creek is
anticipated to be complete by the end of the third quarter,  1997, at which time
the undeveloped portion will then be marketed as completed lots for manufactured
housing.
     
     General competitive conditions are anticipated by the Company to remain, as
set forth hereinabove in Item 1.
     
     Management  of the  Company  feels that the  existing  liability  insurance
covering the  developed and  undeveloped  lots at the Community at Bear Creek is
adequate.
     
Item 3.  LEGAL PROCEEDINGS

     The Company  knows of no material  pending legal  proceedings  to which the
Company is a party or of which any of its  properties is a subject,  and no such
proceedings  are  known  to  the  Company  to be  contemplated  by  governmental
authorities.

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

     The following  matters were submitted to a vote of the  shareholders of the
Company at the Company's annual meeting on October 10, 1996 and approved:

          1. Proposal to amend the Articles of  Incorporation to effect a change
     of the name of the Company from Microtech Medical Systems,  Inc. to Eclipse
     Corporation;
     
          (a)  Number of Shares Voted FOR:          39,752,600
          (b)  Number of Shares Voted AGAINST:          40,000
          (c)  Number of Shares ABSTAINING:              8,500
     
          2.  Proposal  to amend  the  Articles  of  Incorporation  to  effect a
     designation of 500,000 shares of stock as Preferred Stock;

          (a)  Number of Shares Voted FOR:          36,717,100
          (b)  Number of Shares Voted AGAINST:       3,076,500
          (c)  Number of Shares ABSTAINING:              7,500
     
          3.  Proposal  to amend  the  Articles  of  Incorporation  to  effect a
     1-for-100   reverse  stock  split,   to  be  implemented  at   management's
     discretion;

          (a)  Number of Shares Voted FOR:          38,260,100
          (b)  Number of Shares Voted AGAINST:       1,533,500
          (c)  Number of Shares ABSTAINING:              7,500
     
          4. Proposal to amend the Articles of Incorporation to effect a sale of
     the medical test kit business.
       
          (a)  Number of Shares Voted FOR:          38,122,600
          (b)  Number of Shares Voted AGAINST:       1,671,000
          (c)  Number of Shares ABSTAINING:              7,500
       
          Also at the above  meeting,  Kenneth M. Cahill,  James A.  Humpal,  J.
     Royce Renfrow,  Darel A. Tiegs and Thomas M. Dines were elected to serve as
     Directors of the Company until the next annual meeting of shareholders  and
     until their successors are elected and qualified.

                             PART II
                                
Item 5.   MARKET  FOR  THE  COMPANY'S COMMON EQUITY  AND  RELATED
      STOCKHOLDER MATTERS

      (a)   Principal Market or Markets.  
      ------------------------------------

     The  Company's  stock is  traded  on the  over-the-counter  market,  and is
presently  quoted on the NASDAQ OTC  Bulletin  Board under the  symbol,  "ECLP."
Following  table  sets  forth the high and low bid  prices of the  Common  Stock
during the two years ended  December 31, 1996 on the NASDAQ OTC Bulletin  Board.
The prices are believed to be  representative  interdealer  quotations,  without
retail mark-up, mark-down or commissions,  and may not represent prices at which
actual transactions occurred.
<TABLE>
<CAPTION>

                                                  Bid
                                                  ---
                                          High           Low
                                          ----           ---
<S>                                     <C>            <C>   
Quarter Ended March 31, 1996             $.04           $.02
Quarter Ended June 30, 1996              $.06           $.03
Quarter Ended September 30, 1996         $.038          $.038
Quarter Ended December 31, 1996          $.025          $.012

                                                  Bid
                                                  ---

                                          High           Low
                                          ----           ---
Quarter Ended March 31, 1995             $.005          $.005
Quarter Ended June 30, 1995              $.0075         $.005
Quarter Ended September 30, 1995         $.12           $.005
Quarter Ended December 31, 1995          $.0625         $.02
</TABLE>

     (b) Approximate Number of Holders of Common Stock. The number of holders of
record of the  Company's  $.0005 par value Common  Stock at March 11, 1997,  was
approximately 346.

     (c)  Dividends.  The  Company  has  followed  the  policy of re-  investing
earnings in the business, and, consequently, has not paid any cash dividends. At
the present time, no change in this policy is under  consideration  by the Board
of Directors.  The payment of cash dividends in the future will be determined by
the Board of Directors  in light of  conditions  then  existing,  including  the
Company's  earnings,  financial  requirements and conditions,  opportunities for
re-investing earnings, business conditions, Colorado law and other factors.

Item 6.   MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
          RESULTS OF OPERATIONS

     The following  summarizes the Company's results of operations and financial
condition, and should be read in conjunction with the financial statements.

     Liquidity and Capital Resources
     -------------------------------

     There are several components which affect the Company's ability to meet its
financial needs,  including funds generated from operations,  levels of accounts
receivable and inventories, capital expenditures, short-term borrowing capacity,
and the ability to obtain long-term  capital on reasonable  terms. At the end of
1996, the Company's working capital was $522,406,  a decrease of $ $183,413 from
December 31,  1995.  The decrease is  primarily  attributable  to the  Company's
increasing its holdings in its new industry.

     The following  current  portion of long-term  debt is due and payable on or
before December 31, 1997:

<PAGE>

                   Description                        Principal  Amount
                   -----------                        -----------------
                                                    
1.   Note  in  the  amount of $303,973.00  payable          $303,793.00
bearing  interest at 15.5% per annum,  payable  in
monthly interest only payments of $3,923.99,  with
final  principal and interest due July  25,  1997.
Note  collateralized by a First Deed of  Trust  on
the Company's Bear Creek Subdivision property.

Total                                                       $303,793.00
                               
                                                    
Less:  Current Maturities                                   $303,793.00
                                                    
Total Long-Term Debt as of December 31, 1996                   $-0-


     In  order  to  meet  its  obligations  at  maturity  with  respect  to  the
outstanding  principal  and interest on such notes  payable,  the Company may be
required to  restructure  the terms of such notes  and/or  refinance  such notes
through  additional  third-party debt and/or equity  financing.  The Company can
make no assurance  that it will be able to  restructure  such notes or alter the
ultimate terms thereof. In addition,  there can be no assurance that the Company
will be successful in obtaining such third-party financing,  or that anticipated
cash from operations will render refinancing unnecessary.

     Although the Company  currently has no available  credit  facilities  other
than floorlines,  the Company  believes that, based on its current  projections,
its cash,  capital  resources and cash from  operations  should be sufficient to
meets its liquidity and financing  requirements in 1997,  other than third-party
financing  necessary to complete the development of its  subdivision  located at
the Community at Bear Creek. The Company can make no assurance, however, that it
will meet its current  projections.  In addition to seeking additional financing
for the Community at Bear Creek  project,  the Company has explored  alternative
sources of  liquidity,  including  additional  third-  party debt and/or  equity
financing.

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

     Total  revenues  for the year ended  December  31, 1996 were  $705,279,  an
increase (decrease) of $230,188,  or more than 48 percent compared with the year
ended  December 31, 1995. The increase from 1995 to 1996 was primarily due to an
increase in medical  test kit sales and the  discontinuance  of that  operation,
along with the  increase  in  activity in the  Company's  real  estate  oriented
business.

     Cost of sales as a  percentage  of total  revenue  was 67  percent,  and 52
percent in 1996 and 1995, respectively. Increase in the cost of sales percentage
from 1995 to 1996 was primarily the result of discontinuing the medical test kit
operations and the start-up of the real estate business.

     Gross profits were  $232,751,  or 33 percent of sales in 1996,  compared to
$227,131 or 48 percent of sales in 1995.


     Selling and general and administrative  expenses in 1996 were 128,834,  and
as a  percentage  of total  revenues  were 18 percent and 28 percent in 1996 and
1995,  respectively.  Selling expenses include  advertising,  sales commissions,
brochures and other  promotional  material and certain salary expenses.  General
and  administrative  expense costs include all  corporate  overhead,  management
fees,  all  occupancy  costs and  interest.  While  general  and  administrative
expenses are primarily fixed expenses, the Company achieved a reduction in these
expenses,  primarily  again to its management  contract with  InnerCircle  Group
Incorporated.  In addition,  the Company was able to increase its total revenues
in 1996 from  1995  without  proportionally  increasing  general  administrative
expenses by its change of business emphasis.

     Interest income (net of interest  expense) of 1996 was $44,895  compared to
interest  income (net of interest  expense) of $24,177 in 1995.  The increase of
interest  income of $20,718 during the year resulted  primarily from an increase
in investments.

     As a result,  the Company recorded $245,428 net income in 1996 compared to
$92,348 in 1995.

Item 7.  FINANCIAL STATEMENTS

     The report of the independent  auditors on the financial  statements appear
at Pages F-2 and F-3, and the  financial  statements  and most of the  financial
statements appear at Pages F-4 through F-18 hereof.  These financial  statements
and  related   financial   information   required  to  be  filed  hereunder  are
incorporated herein by reference.

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

       Not applicable.


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

      (a)   Directors and Executive Officers.  
     -----------------------------------------
     The names and ages of the Directors  and executive  officers of the Company
are as follows:

     Name                Age               Position                  Since
     ----                ---               --------                  -----
                                                         
Kenneth M. Cahill        60        Chairman   of   the   Board        6/96
                                   of Directors, President  and  
                                   Chief Executive Officer
                                                             
J.Royce Renfrow          53        Secretary and Director             6/96

Darel A. Tiegs           52        Vice President and Director        6/96
                                                             
James A. Humpal          42        Treasurer and Director             6/96
                                                             
Thomas M. Dines          49        Director                           8/96
<PAGE>

     The Directors serve until the next annual meeting of shareholders, or until
their successors are elected.

     The following sets forth information  concerning the principal  occupations
and business experience of each of the officers and Directors of the Company:

     Kenneth M. Cahill,  Chairman of the Board,  President  and Chief  Executive
Officer. Mr. Cahill joined the Company as Director,  Chief Executive Officer and
President in June of 1996.  From 1980 to May 1996, Mr. Cahill served as Director
of Operations for Larken,  Inc., a hotel operator.  Mr. Cahill directed Larken's
day-to-day  marketing and training  initiatives for over 76 hotels. In 1984, Mr.
Cahill  formed  Arcadia,  Inc.,  where,  as  its  Chief  Executive  Officer,  he
concentrated Arcadia's efforts in the areas of gaming and hospitality. Since May
1996,  Mr.  Cahill has also  served as a Vice  President  of  InnerCircle  Group
Incorporated,  a management and consulting  company.  Since May 1996, Mr. Cahill
has also  served as a Director  and as the  President  and CEO of Gallery  Rodeo
International, a publicly- traded company involved in the real estate and gaming
industries.

     Darel A. Tiegs,  Director and Vice President.  Mr. Tiegs joined the Company
in June of 1996.  From 1972 to 1975,  Mr.  Tiegs was Vice  President  of Norwest
Bank,  where he gained  extensive  experience  in all facets of the real  estate
industry.  Mr.  Tiegs  headed  projects,   including  residential  developments,
shopping centers,  hospitals and casinos.  From 1984 to the present, he has been
President  and part  owner of  Superior  Homes,  a company  specializing  in the
construction,  warranty work and installation of modular homes.  Since May 1996,
Mr. Tiegs has also served as a Director and as Vice  President of Gallery  Rodeo
International,  a publicly-traded company involved in the real estate and gaming
industries.

     J. Royce Renfrow,  Director,  Corporate Secretary and General Counsel.  Mr.
Renfrow joined the Company as General Counsel,  Corporate Secretary and Director
in June 1996. Mr.  Renfrow  practiced law in a small firm  specializing  in real
estate and corporate law from 1969 until May 1996. From 1969 to the present, Mr.
Renfrow has served as President and as General  Counsel for Speedway Gas and Oil
Co.,  Inc.,  a small firm which  provides  management  services  for oil and gas
companies.  From 1989 to 1992,  Mr. Renfrow served as Vice President and General
Counsel of a small,  privately-held  medical start-up  company,  MedLogic Global
Corporation.  From May 1996  until  the  present,  Mr.  Renfrow  has  served  as
Corporate  Secretary and General Counsel to InnerCircle  Group  Incorporated,  a
management consulting company.  Since May 1996, Mr. Renfrow has also served as a
Director,   General   Counsel  and   Corporate   Secretary   of  Gallery   Rodeo
International,  a publicly-traded company involved in the real estate and gaming
industries.

     James A. Humpal,  Director and Treasurer.  Mr. Humpal joined the Company in
June of 1996 as Treasurer and Director  From 1989 to 1991,  Mr. Humpal served as
General Manager of the Holiday Inn-Columbus in Ohio. From 1991 to 1992, he began
work for  Larken,  Inc.,  as a General  Manager  of the  Holiday  Inn-Tucson  in
Arizona.  In 1992 and until May 1996,  Mr.  Humpal  served as Vice  President of
Operations  of  Larken,  Inc.  Since May 1996,  Mr.  Humpal  has also  served as
Director and Treasurer of Gallery Rodeo International, a publicly-traded company
involved in the real estate and gaming industries.

     Thomas M. Dines,  Director.  Mr.  Dines was  appointed as a Director of the
Company  in August  1996.  For the last five  years,  Mr.  Dines has been a real
estate broker doing business under his own name. He has extensive  experience in
real estate, loans, creation, estate settlement,  banking and appraisal. He also
has  expertise  in  the  areas  of  income,  rental,  farm  and  ranch  property
management. Mr. Dines has served as President of several corporations, including
Mountain  Securities  Corporation,  where he was President from 1995 to 1996 and
remains as such.  He has been a Member and Director of Mountain  Securities  for
over 27 years.
<PAGE>
      (b)  Directorships.  
      ---------------------
     Kenneth M.  Cahill,  Darel A. Tiegs,  J. Royce  Renfrow and James A. Humpal
have also been selected as Directors of Sierra-Rockies Corporation.

Item 10.  EXECUTIVE COMPENSATION

     No executive officer,  including the Chief Executive Officer,  received any
compensation during 1996.

     The  Company  did not grant any  options  or SAR's in 1996.  Similarly,  no
Directors fees were paid during 1996.

     The  following  table  sets  forth  information  with  respect to the Chief
Executive  Officers  concerning  the exercise of options  during the fiscal year
ending  December  31, 1996 and  unexercised  options  held as of the end of that
fiscal year:

    Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
    ------------------------------------------------------------------------
                                
                                
<TABLE>
<CAPTION>
                           
                                                  
                                                                  Number of       Value of       
                                                                    Shares      Unexercised
                                                                 Underlying    In-the-Money
                                                                 Unexercised     Options at
               Name              Shares  Acquired                 Options at     FY-End($)(1)(2)
                                 on Exercise (#)  Value Realized  FY-End(#)(1)
                                 ---------------  --------------  ------------
<S>                                    <C>         <C>              <C>         <C>  
Kenneth M. Cahill ..............       - 0 -       $     0.00         - 0 -       $   0.00
Jerry G. Kilgore ...............       7,500,000   $16,500.00        3,000,000   $6,000.00
<FN>

     (1) All options are presently  exercisable.  (2) Market value of underlying
securities  minus the exercise price.  Based on closing sale price of $ 0.02 per
share on the 11th day of March,  1997.  (3)  Exercise  price  equal to $0.02 per
share.
</FN>
</TABLE>

Item  11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL  OWNERS  AND
MANAGEMENT

     The following table sets forth information  regarding  beneficial ownership
as of March 11, 1997 of the Company's common stock by any person who is known by
the  Company to be the  beneficial  owner of more than five (5%)  percent of the
Company's voting securities,  and by each Director and by officers and Directors
of the Company as a group. Although authorized for Preferred Shares, the Company
has issued only Common Stock.
<TABLE>
<CAPTION>

          Name and Address             Number of     Percentage
                                         Shares       of Class
<S>                                   <C>                   <C>    
Kenneth M. Cahill                       12,880,000           14.75%
Holly Sugar Building - Suite 330
2 N. Cascade Avenue
Colorado Springs, CO  80903
                                                                 
Darel A. Tiegs                           6,708,750(2)         7.68%
Holly Sugar Building - Suite 330               
2 N. Cascade Avenue
Colorado Springs, CO  80903
                                                                 
J. Royce Renfrow                         6,708,750(1)         7.68%
Holly Sugar Building - Suite 330               
2 N. Cascade Avenue
Colorado Springs, CO  80903
                                                                 
James A. Humpal                             536,700  *        .61%
Holly Sugar Building - Suite 330
2 N. Cascade Avenue
Colorado Springs, CO  80903
                                                                 
Thomas M. Dines                              20,000  *        .02%
16 Heather Drive
Colorado Springs, CO  80906-3114
                                                                 
Glacier Valley Holding Corporation        6,225,000          7.13%
13 S. Tejon - Suite 502
Colorado Springs, CO  80903

Columbine Home Sales LLC                 13,500,000         15.45%
4320 N. Nevada Avenue
Colorado Springs, CO 80907
                                                                 
All  Officers  and  Directors  as        26,854,200(1)(2)   30.74%
a Group (5 persons)                          
<FN>
*  Represents  less  than 1% of the Company's outstanding  Common
Stock

     (1)  Represents  shares  held by R Lazy J Trust  with J.  Royce  Renfrow as
Trustee.  The  beneficiaries  under  the R Lazy J Trust are  Seadon T.  Renfrow,
Stephanie J. Renfrow and other members of the Renfrow family, excluding J. Royce
Renfrow.

     (2) Represents shares held by The Tiegs Family Trust with Darel A. Tiegs as
Trustee. The beneficiaries under The Tiegs Family Trust are Scott D. Tiegs, Beth
L. Tiegs and other members of the Tiegs family, excluding Darel A. Tiegs.
</FN>
</TABLE>

Item 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Settlement Agreement with Jerry Kilgore and Related Matters

     Beginning on or about October 1, 1992 and continuing through  approximately
April 21, 1994, Mr. Jerry Kilgore,  who during such period was the President and
Treasurer and a Director of the Company,  made several unauthorized  investments
of Company funds,  which investments were not made on behalf, or recorded in the
name, of the Company.  Also,  during fiscal years 1991,  1992 and 1993 and until
approximately  the end of the first  quarter of 1994,  Mr.  Kilgore made several
payments  of Company  funds  ostensibly  as  compensation  for  services  to the
company,  which payments were made to relatives and/or associates of Mr. Kilgore
and were unsupported by any contracts or appropriate invoices.  Mr. Kilgore also
took bonus  payments  during such period  which were not duly  authorized.  As a
result of these unauthorized  investments and payments,  and after giving effect
to partial  reimbursements  made by Mr.  Kilgore to the Company,  Mr.  Kilgore's
liability  to the  Company  as of March 1, 1995 was  determined  by the Board of
Directors to be $422,774.24,  which included interest retroactive to the date of
the first misappropriation of Company funds.

     On August 28, 1995 the Company  entered  into a Settlement  Agreement  (the
"Settlement Agreement") with Mr. Kilgore, the purpose of which was to facilitate
Mr. Kilgore's  satisfaction of his debt to the Company over a period of time, in
recognition of fact that he lacked the financial  capacity to repay  immediately
the  misappropriated  funds. While Mr. Kilgore no longer serves as President and
Treasurer or as a Director of the Company, the Settlement Agreement acknowledged
that his continued  employment  is necessary for the continued  operation of the
business of the Company,  and he has agreed to be employed by the Company and to
serve in an advisory  capacity to the  Company's  Board of Directors for certain
limited purposes.

     Concurrently  with the execution of the Settlement  Agreement,  Mr. Kilgore
made and issued to the Company an interest-bearing  Promissory Note (the "Note")
payable to the Company in the amount of $422,774.24. The Note was collateralized
by (1) Mr. Kilgore's  approximately 19 million shares of the Common Stock of the
Company,(2) his outstanding  options to acquire 10,500,000 shares of such Common
Stock  (as  well  as the  shares  of the  Sun  Wireless  TV,  Inc.,  an  Arizona
corporation  ("Valley"),  (3) a  promissory  note  in the  principal  amount  of
$235,000   issued   to  Mr.   Kilgore   on  August   10,   1994,   by   Carolina
Multi-Communications Corp., a Nevada corporation ("CM-CC") and (4) Mr. Kilgore's
residential real property located in Denver,  Colorado. The Settlement Agreement
also granted the Company full  authority  to receive  payment of any  principal,
interest,  dividends or any other  distribution from CM- CC and/or the shares of
stock in Valley and to liquidate or otherwise dispose of the same at any time.

     Lastly, the Settlement  Agreement provides that within sixty days after the
Note is paid in full,  Mr.  Kilgore  must remit to the  Company a sum equal to a
reasonable attorneys' fees, accounting fees, Directors' fees and any other costs
and expenses  incurred by the Company relating to and arising from Mr. Kilgore's
misappropriation of funds, the investigation thereof, the preparation, execution
and performance of the Settlement  Agreement and any other effort to recover the
Company's funds.

     On June 27, 1996 Mr.  Kilgore sold all of the  26,835,000  shares of common
stock  of  the  Company  owned  by him  (the  "Shares")  to  Kenneth  M.  Cahill
("Cahill"),  the Tiegs Family Trust (an affiliate of Darel A. Tiegs)  ("Tiegs"),
the R Lazy J Trust (an affiliate of J. Royce Renfrow) ("Renfrow"),  and James A.
Humpal ("Humpal"),  each of whom are currently Directors of the Company,  for an
aggregate purchase price of $561,946 in cash, pursuant to an Agreement dated May
16, 1996 (the "Sale Agreement") between Mr. Kilgore,  Cahill, Tiegs and Renfrow.
Cahill,  Tiegs,  Renfrow and Humpal shall be collectively  referred to herein as
the "Purchasers."

     Pursuant  to the Sale  Agreement,  of the total  purchase  price  amount of
$561,946,  (1)  $63,000  was  paid by the  Purchasers  to Mr.  Kilgore,  and (2)
$498,346  was paid by the  Purchasers  directly  to the Company on behalf of Mr.
Kilgore,  as payment in full of all  amounts  due by Mr.  Kilgore to the Company
pursuant to the Settlement Agreement and the Note.

     In connection with the Sale Agreement,  on June 27, 1996 the members of the
Company's  Board of  Directors,  Charles  L.  Diehl and J.  Kenneth  McClatchey,
resigned  from the Board of Directors  and as Company  officers,  and Kenneth M.
Cahill,  J. Royce Renfrow,  James A. Humpal and Darel A. Tiegs were appointed as
Board members to fill the four vacancies on the Board.  In addition,  Kenneth M.
Cahill was  appointed as Chief  Executive  Officer and President of the Company,
Darel A.  Tiegs was  appointed  as Vice  President,  and J.  Royce  Renfrow  was
appointed as Corporate Secretary and General Counsel.

     As  additional  consideration  for the sale of the Shares,  the  Purchasers
agreed to submit to the  Company's new Board of Directors a proposal to sell the
Company's medical testing products manufacturing  operations to Mr. Kilgore. The
Purchasers,  as new  Directors of the  Company,  also agreed to vote in favor of
this asset sale  transaction and to recommend to the shareholders of the Company
the approval of such sale.

     Following the  consummation  of the  transaction  contemplated  in the Sale
Agreement,  Mr.  Kilgore  continues  to hold options to purchase up to 3,000,000
shares of the  Company's  Common  Stock.  Pursuant  to the Sale  Agreement,  Mr.
Kilgore has agreed that,  upon exercise of any of such options,  he will appoint
one or more of the  Purchasers  as proxy to vote the shares  acquired  upon such
exercise at any shareholder meeting. In addition, Mr. Kilgore has agreed that he
will use his best  efforts in  obtaining  proxies  for  approximately  5,000,000
additional shares of the Company's  outstanding  Common Stock in order to obtain
shareholder  approval  of  any  transaction   requiring   shareholder  approval,
including  the  sale  of  the  Company's  medical  laboratory  testing  products
manufacturing operations to Mr. Kilgore.

     The Sale  Agreement  also  contemplates  that Mr. Kilgore will remain as an
employee  of the  Company  until  the  sale  of  the  medical  testing  products
manufacturing  operations has been consummated.  Mr. Kilgore will continue to be
paid a salary of $9,250  per month  until his  employment  terminates  upon such
sale.

     In  connection  with  the  transactions   contemplated  by  the  Settlement
Agreement  and the  resignation  of its  former  Directors,  Messrs.  Diehl  and
McClatchey,  the Company  has entered  into an  Indemnification  Agreement  with
Messrs. Diehl and McClatchey,  dated June 27, 1996 pursuant to which the Company
has acknowledged its continuing obligation to indemnify Messrs.  Kilgore,  Diehl
and  McClatchey  for  claims  that  may be  asserted  against  such  persons  in
connection  with the  Settlement  Agreement  transactions.  The  Indemnification
Agreement  provides that the Company will indemnify the former Directors against
such  claims to the  fullest  extent  permitted  by the  Company's  Articles  of
Incorporation and Colorado Corporation Law.

     Agreement for Sale of Medical Testing Products Manufacturing  Operations to
Mr. Kilgore

     The Company has entered  into an Asset  Purchase  Agreement  dated June 27,
1996 (the "Asset  Purchase  Agreement"),  between  the Company and Mr.  Kilgore,
pursuant to which the Company  has agreed to sell its medical  testing  products
manufacturing  operations,  including  all  licenses,  contracts,   inventories,
operating  assets,  personal and real property,  and any other assets related to
such  operations to Mr. Kilgore for $251,000.  That on the 31st day of December,
1996, the agreement  between the company and Mr. Kilgore was modified,  a credit
toward Mr. Kilgore's purchase price of $50,000 of benefits which the company had
agreed to pay on his behalf, and, accordingly,  the promissory note evidencing a
portion of the purchase price for said operation was reduced to $200,000.

InnerCircle Group Management Agreement

     In June 1996 the Company entered into an agreement with  InnerCircle  Group
Incorporated  ("InnerCircle")  with  respect to the  management  of the Company.
InnerCircle is a company that provides  general  managerial  services to various
businesses.  Kenneth M.  Cahill,  Darel A.  Tiegs,  James A. Humpal and J. Royce
Renfrow  each own a 25% equity  interest in  InnerCircle  and are  employees  of
InnerCircle.  As  employees  of  InnerCircle,  they are  obligated to assume the
following  roles in the  Company:  (1)  Kenneth  M.  Cahill:  President/CEO  and
Director;  (2) Darel A. Tiegs: Vice President and Director; (3) James A. Humpal:
Treasurer and Director;  and (4) J. Royce Renfrow:  Corporate  Secretary/General
Counsel and Director.

     Under the agreement,  InnerCircle is to provide the following services: (1)
general and administrative business office services,  including the use of Class
A office space,  as necessary,  furniture,  equipment,  fixtures and secretarial
services; (2) general legal and accounting services necessary for the day-to-day
operation of the Company's  offices and activities,  not including outside legal
and accounting services; (3) planning,  structuring,  development and financing,
if applicable, of projects to be considered on behalf of the Company,  including
the  completion of project  approved;  and (4) the compliance  with  appropriate
corporate and securities laws of the state of  incorporation  of the Company and
the United States,  including filing of appropriate reports, forms and documents
with the various regulatory  authorities.  The Company paid to InnerCircle Group
Incorporated  (IGI),  an  affiliate  of the Company,  management  fees  totaling
$65,000 per month for 6 months during the year ended December 31, 1996. IGI also
forgave fees during the year totaling $90,000.

Transactions with Gallery Rodeo International

     In August 1996,  the Company  purchased  from Gallery  Rodeo  International
("Gallery"),  a corporation  controlled by the Company's  Board of Directors,  a
promissory  note  dated  July 14,  1995,  issued by Elk Creek  Partners  Limited
Partnership,  in the  principal  amount of  $500,000.  The Company  paid Gallery
$450,000 in cash for this note. The note bears interest at a rate of ten percent
(10%) per annum, payable in equal monthly  installments of $4,166.67.  Principle
and  accrued  but unpaid  interest  under the note is due and payable in full on
July 13, 2000. The note is secured by certain real property  (including a casino
building and lot) located in Cripple Creek, Colorado.

     In August 1996, the Company  purchased from Gallery a promissory note dated
June 30, 1995,  issued by Colorado  Escrow,  Inc.,  in the  principal  amount of
$208,133.34.  The Company paid Gallery  $200,000 in cash for this note. The note
bears interest at a rate of seven and one-half percent (7.5%) per annum, payable
in equal monthly  installments  of  $1,300.87.  Principle and accrued but unpaid
interest under the note is due and payable in full on November 27, 1997. Kenneth
Cahill, the President and CEO and a Director of the Company,  owns,  directly or
indirectly, approximately 70% of Colorado Escrow, Inc.

     Kenneth M. Cahill is the Chairman of the Board,  Chief  Executive  Officer,
and President of Gallery.  Darel A. Tiegs and J. Royce Renfrow  collectively own
890,975 shares of Gallery's Common Stock  (approximately 5.6% of the outstanding
shares) and are each officers of Gallery.  James A. Humpal is also an officer of
Gallery.

     During 1996, the Company paid $3,500 in consulting fees to Thomas M. Dines,
a Director of the Company.

     Item 13. EXHIBITS AND REPORTS ON FORM 8-K (Footnotes on following page)

(a)     Exhibits

        The following exhibits are submitted herewith:

     Number                       Description
     ------                       -----------
                    
     (a)(1)   Financial  Statements.  Reference is made the  Index
             to Financial Statements of the Company on Page F-1
             of   this  report.  
     3.1.1   Articles   of  Incorporation  of  the  Company,   as
             amended. (1)
     3.1.2   Amendment  to Articles of Incorporation (Article  I)
             as  approved by shareholders at Annual Shareholders'
             Meeting on October 10, 1996 changing the name of the
             corporation to Eclipse Corporation.
     3.2     By-Laws (1)
     3.2.1   Amendments   to  By-Laws  adopted  June   27,   1996
             (amending Section 23), and August 15, 1996 (amending
             Section  13),  both  of which are incorporated  into
             January 15, 1997 Restatement of By-Laws.
     4.1     Form of Underwriters Warrant (1)
     10.1    Lease Agreement (2)
     10.2    Incentive Stock Option Plan (2)
     10.3    Distribution  Agreement with  Innovative  Diagnostic
             Systems, Inc. (2)
     10.4    Settlement Agreement between the Company  and  Jerry
             G. Kilgore (3)
     10.6    Asset Purchase Agreement dated June 27, 1996 between
             the  Company  and  Jerry  G. Kilgore  and  amendment
             thereto.
     10.7    Management   Agreement  between  the   Company   and
             InnerCircle Group, Incorporated, dated July 9, 1996.
     10.8    Promissory  Note  Purchase  Agreement  between   the
             Company   and  Gallery  Rodeo  International   dated
             July 9, 1996.
     10.9    Promissory  Note  Purchase  Agreement  between   the
             Company and Gallery Rodeo International dated August
             1, 1996.
     10.10   Purchase  Agreement between the Company and  Glacier
             Valley Holding Corporation dated September 30, 1996.
     10.11   Purchase Agreement between the Company and Columbine
             Home Sales llc dated the 1st day of November, 1996.
     10.12   Lease  Agreement between the Company and Ram Holding
             Corporation dated the 1st day of December, 1996.

(b)  Reports on Form 8-K

      Reference  is  made to the dates of the  Company's  current
reports on Form 8-K:

                Date              Item Disclosed

               6/27/96        Changes in Control
                              Acquisition or Disposition of Assets

                8/27/96       Changes in Registrant's Certified Acct.

               10/11/96       Acquisition of Assets

Footnotes from prior page:

(1)  Incorporated by reference to the exhibit of the same  number
(except  where  noted otherwise) as filed with  the  Registrant's
Form S-18 (File No. 33-14106).

(2)  Incorporated by reference to the exhibit of the same  number
(except  where  noted otherwise) as filed with  the  Registrant's
Annual  Report  on Form 10-K for the fiscal year ending  December
31, 1990.

(3)  Incorporated by reference to the exhibit of the same  number
(except  where  noted otherwise) as filed with  the  Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31,
1994.

<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.

(Registrant):                 ECLIPSE CORPORATION



By:  /s/ Kenneth M. Cahill              Date:  April 14, 1997
     ---------------------                     --------------
     Kenneth M. Cahill
     President

     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 date indicated.

By:   /s/  Kenneth M. Cahill            Date:   April 14, 1997
      ----------------------                    ---------------
     Kenneth M. Cahill
     President
     Director

By:   /s/  Darel  A.  Tiegs             Date:   April 14, 1997
      ----------------------                    --------------
     Darel A. Tiegs
     Vice President
     Director

By:   /s/  James A. Humpal              Date:   April 14, 1997
     ----------------------                     --------------
     James A. Humpal
     Treasurer
     Director

By:   /s/  J. Royce Renfrow             Date:   April 14, 1997
     ----------------------                     ---------------
     J. Royce Renfrow
     Corporate Sect'y/Gen. Counsel
     Director

By:   /s/  Thomas M. Dines              Date:   April 14, 1997
     ---------------------                      ---------------
     Thomas M. Dines
     Director
<PAGE>
                              ECLIPSE CORPORATION

                         Index To Financial Statements

                                                              Page

Independent Auditors' Reports................................. F-2

Balance Sheet, December 31, 1996.............................. F-4

Statements of Operations, for the years ended 
December 31, 1996 and 1995 ................................... F-6

Statement of Shareholders' Equity, January 1, 1995 
through December 31, 1996 .................................... F-7

Statements of Cash Flows, for the years ended 
December 31, 1996 & 1995 ..................................... F-8

Summary of Significant Accounting Policies.................... F-10

Notes to Financial Statements................................. F-12



                                      F-1

<PAGE>






To the Board of Directors
Eclipse Corporation


INDEPENDENT AUDITORS' REPORT


     We  have  audited  the  balance  sheet  of  Eclipse  Corporation  (formerly
Microtech  Medical  Systems,  Inc.) as of  December  31,  1996  and the  related
statements of operations, shareholders' equity and cash flows for the year ended
December 31, 1996.  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 audit.

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

     In our opinion,  the financial  statements referred to above present fairly
the financial position of Eclipse  Corporation,  as of December 31, 1996 and the
results of its  operations  and its cash flows for the year ended  December  31,
1996 in conformity with generally accepted accounting principles.




Cordovano and Company, P.C. Denver, Colorado
March 12, 1997








                                      F-2

<PAGE>


                  INDEPENDENT AUDITOR'S REPORT





To the Stockholders and Board of Directors
Microtech Medical Systems, Inc.
Aurora, Colorado


     We have  audited  the balance  sheet (not  separately  included  herein) of
Eclipse Corporation formerly Microtech Medical Systems, Inc.) as of December 31,
1995)  and  the  accompanying  related  statements  of  operations,  changes  in
stockholders'  equity and cash flows for the year then  ended.  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 audit.

     We conducted  our audit in  accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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 Eclipse  Corporation as of
December 31, 1995,  and the results of its operations and its cash flows for the
year ended December 31, 1995 of Microtech  Medical Systems,  Inc., in conformity
with generally accepted accounting principles.







HEIN - ASSOCIATES LLP

Denver, Colorado
March 7, 1996


                                      F-3
<PAGE>


                              ECLIPSE CORPORATION
                              -------------------
<TABLE>
<CAPTION>

                                 Balance Sheet
                               December 31, 1996

<S>                                                                  <C> 
ASSETS
CURRENT ASSETS
Cash and cash equivalents ...................................         $    2,955
Restricted cash .............................................             52,706
Receivables:
Trade, net of allowance of $5,080 ...........................             25,917
Notes, related parties (Note C) .............................            228,134
Employee ....................................................              3,000
Accrued interest ............................................             19,439
Inventory, at cost ..........................................          2,084,528
Prepaid expenses ............................................            143,288
                                                                         -------
TOTAL CURRENT ASSETS ........................................          2,559,967

NOTES RECEIVABLE (Note C) ...................................            652,283

PROPERTY AND EQUIPMENT, less accumulated
depreciation of $221 (Note D) ...............................            143,687

OTHER ASSETS
Deferred charges, less accumulated
amortization of $2,200 ......................................             11,000
Other .......................................................                576
                                                                             ---

                                                                      $3,367,513
                                                                      ==========
                                                     
</TABLE>


        See accompanying summary of significant accounting policies and
                         notes to financial statements.

                                       F-4

<PAGE>

                              ECLIPSE CORPORATION
<TABLE>
<CAPTION>

                   Balance Sheet, Concluded December 31, 1996


                      LIABILITIES AND SHAREHOLDERS' EQUITY
<S>                                                    <C>
CURRENT LIABILITIES
Accounts payable ..............................................       $  178,980
Accrued expenses ..............................................            7,354
Flooring lines ................................................        1,091,230
Notes payable (Note E) ........................................          528,793
Deferred revenue ..............................................          221,929
Customer deposits .............................................            9,275
                                                                           -----
TOTAL CURRENT LIABILITIES .....................................        2,037,561

COMMITMENTS (Note H) ..........................................             --

SHAREHOLDERS' EQUITY (Note F)
Preferred stock, $.0005 par value, 500,000 shares
authorized, -0- issued and outstanding ........................             --
Common stock, $.0005 par value, 200,000,000 shares
authorized, 87,330,900 issued and outstanding .................           37,578
Additional paid-in capital ....................................        1,280,852
Retained earnings .............................................           11,522
                                                                          ------
TOTAL SHAREHOLDERS' EQUITY ....................................        1,329,952
                                                                       ---------

                                                                      $3,367,513
                                                                      ==========
</TABLE>
                                            

        See accompanying summary of significant accounting policies and
                         notes to financial statements.

                                      F-5

<PAGE>

                              ECLIPSE CORPORATION
<TABLE>
<CAPTION>

                            Statements of Operations

                                                      For The Years Ended
                                                         December 31,       
                                                         ------------
                                                   1996             1995    
                                                   ----             ----    
<S>                                          <C>             <C>
NET SALES ................................   $    529,322    $       --

COST OF SALES ............................       (425,244)           --   
                                                 --------                 
GROSS PROFIT .............................        104,078            --

OPERATING EXPENSES
Management fees, related parties (Note B)         300,000            --
Selling, general and administrative ......         80,625            --   
                                                   ------                 
                                                  380,625            -- 
                                                  -------               

INCOME (LOSS) FROM OPERATIONS ............       (276,547)           --

OTHER INCOME (EXPENSE)
Interest and dividend income .............         63,668            --
Interest expense .........................        (18,773)           --
Other income (expense), net ..............           (466)           --   
                                                     ----                 
TOTAL OTHER INCOME (EXPENSE) .............         44,429            --

INCOME (LOSS) BEFORE INCOME TAXES ........       (232,118)           --

INCOME TAX (EXPENSE) BENEFIT (Note G) ....           --              --   
                                                  ________       ________
INCOME (LOSS) FROM CONTINUING OPERATIONS .       (232,118)           --

DISCONTINUED OPERATIONS (Note A):
Net income from medical product
development operations, net of
$64,315 and $27,000 in income taxes  .....        433,773          92,348

Gain on sale of operations, net of
$-0- in income taxes .....................         43,773            --   
- -                                                ------          ------       

NET INCOME ...............................   $    245,428    $     92,348
                                             ============    ============
NET INCOME (LOSS) PER SHARE,
CONTINUING OPERATIONS ....................   $         *     $         *
                                             ============    =============
 NET INCOME (LOSS) PER SHARE .............   $         *     $         *
                                             ============    =============
 WEIGHTED AVERAGE SHARES OUTSTANDING .....     72,060,067      62,992,000
                                               ==========      ==========
</TABLE>


*  Less than $.01 per share.

        See accompanying summary of significant accounting policies and
                         notes to financial statements.

                                      F-6

<PAGE>

                               ECLIPSE CORPORATION
                          (A DEVELOPMENT STAGE COMPANY)
<TABLE>
<CAPTION>

                        STATEMENT OF SHAREHOLDERS' EQUITY
                    January 1, 1995 through December 31, 1996



                                                                                   Additional
                                  Preferred Stock              Common Stock          Paid-in      Retained
                                 Shares   Par Value       Shares        Par Value    Capital      Earnings           Total
                                 ------   ---------       ------        ---------    -------      --------           -----
<S>                                <C>           <C>    <C>          <C>           <C>           <C>            <C>
  BALANCE, JANUARY 1, 1995 ......   --          --      59,080,900   $    29,540   $ 1,010,605   $  (326,254)   $   713,891

     Net Income .................   --          --            --            --            --          92,348         92,348
BALANCE, DECEMBER 31, 1995 ......   --          --      59,080,900        29,540     1,010,605      (233,906)       806,239

                                    --          --       7,500,000         3,750        12,750          --           16,500

     Shares issued for
      acquisition of land
      (Note A) ..................   --          --       6,250,000         3,113       163,095          --          166,208

     Shares issued for exercise
      of stock option ...........   --          --       1,000,000           500           500          --            1,000

     Shares issued to acquire
      assets of manufactured
      housing dealership ........   --          --      13,500,000           675        93,902          --           94,577

     Net income .................   --          --            --            --            --         245,428        245,428
       BALANCE, DECEMBER 31, 1996   --          --      87,330,900   $    37,578   $ 1,280,852   $    11,522    $ 1,329,952
                                    ==   ===========   ===========   ===========   ===========   ===========    ===========

</TABLE>



    See accompanying summary of significant accounting policies and notes to
                       consolidated financial statements.
                                       F-7

<PAGE>

                              ECLIPSE CORPORATION
<TABLE>
<CAPTION>

                            Statements of Cash Flows
                                                      For The Years Ended
                                                            December 31,       
                                                            ------------
                                                         1996             1995    
                                                         ----             ----    
<S>                                               <C>               <C>
OPERATING ACTIVITIES
Net income ...................................     $   245,428      $    92,349

Transactions not requiring cash:
Depreciation and amortization ................           2,421            9,113
Gain on sale of discontinued
operations ...................................         (43,773)            --
Unauthorized transaction recoveries ..........            --            (12,000)
Bad debt expense .............................            --             13,794
Deferred income taxes ........................          69,000           (9,000)
Other, net ...................................            --              4,602

Changes in current assets and
current liabilities: Receivables,
inventory and other
current assets ...............................        (203,384)         (20,289)
Accounts payable and other
current liabilities ..........................         339,869           32,550
                                                       -------           ------
NET CASH PROVIDED BY
OPERATING ACTIVITIES .........................         409,561          111,119
                                                       -------          -------

INVESTING ACTIVITIES
Repayments, former president (Note A) ........            --             12,000
Changes in certificates of deposit ...........          51,359         (100,000)
Purchase of property and equipment ...........        (328,060)         (26,000)
Retirements of property and equipment ........          30,920             --
Payments for deferred charges ................         (13,200)            --
Purchase of notes receivable,
related parties, (Note B) ....................        (836,644)            --   
                                                      --------                  
NET CASH (USED IN)
INVESTING ACTIVITIES .........................      (1,095,625)        (114,000)
                                                    ----------         -------- 

FINANCING ACTIVITIES
Proceeds from long-term debt .................         165,000             --
Proceeds from sale of common stock ...........          17,500             --   
                                                        ------                  
NET CASH PROVIDED BY
FINANCING ACTIVITIES .........................         182,500             --   
                                                       -------                  

NET DECREASE IN CASH .........................        (503,564)          (2,881)
Cash at beginning of year ....................         506,519          509,400
                                                       -------          -------
CASH AT END OF YEAR ..........................     $     2,955      $   506,519
                                                   ===========      ===========
</TABLE>



        See accompanying summary of significant accounting policies and
                       notes to financial statements. 

                                      F-8

<PAGE>

                              ECLIPSE CORPORATION
<TABLE>
<CAPTION>

                       Combined Statements of Cash Flows

                                                      For The Years Ended
                                                            December 31,       
                                                            ------------
                                                         1996             1995    
                                                         ----             ----   
<S>                                                    <C>           <C>  
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest ..........................................    $   12,073    $      --
Income taxes ......................................    $     --      $      --

NONCASH INVESTING AND FINANCING TRANSACTIONS:
Inventory purchased for flooring
lines and debt ....................................    $1,151,230    $      --
Land purchased for debt and stock .................    $  470,001    $      --
Property acquired for stock .......................    $   94,577    $      --
Deferred gain on note receivable from
former president ..................................    $  126,056    $      --

</TABLE>



        See accompanying summary of significant accounting policies and
                         notes to financial statements.

                                       F-9
<PAGE>

                              ECLIPSE CORPORATION

                   Summary of Significant Accounting Policies
                               December 31, 1996

Revenue and cost recognition
----------------------------
Revenue from all home sales is recognized upon the closing of the sale using
the deposit method.  All customer deposits and advances for homes are treated
as liabilities.  Costs incurred in connection with the finished homes,
marketing and selling, as well as general and administrative costs are charged
to expense as incurred.

Use of estimates 
-----------------
The preparation of the 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.

Cash equivalents
----------------
For the purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.

Restricted cash
---------------
Restricted cash consists of a certificate of deposit which secures a required
letter of credit for water and sewer taps on a development.

Accounts receivable 
--------------------
     The Company  provides an allowance for doubtful  accounts,  as needed,  for
accounts  deemed  uncollectible.  The  allowance  for  doubtful  accounts  as of
December 31, 1996 totaled $5,080.

Inventory 
----------
     Inventory consists of 28 finished  prefabricated homes, which are valued at
cost on a specific identification basis, and $748,730 of land held for sale.

Property, equipment and depreciation 
-------------------------------------
Fixed  assets  are  stated  at  cost.  Depreciation  is  computed  over the
estimated useful life of the assets using the straight-line method. Depreciation
expense was $221 for the period ended December 31, 1996.

Deferred revenues 
------------------
Deferred revenues consist of curtailment payments of $95,873
related to the acquisition of inventory from Columbine Home Sales, LLC which
are anticipated to be realized upon sale of the inventory and a deferred gain
of $126,056 related to sale of the discontinued operations which will be
recognized when received from the former president.




                                      F-10
<PAGE>

                              ECLIPSE CORPORATION

             Summary of Significant Accounting Policies, Concluded
                               December 31, 1996

Income Taxes 
-------------
The Company accounts for income taxes under the liability method,
which requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns.  Under this method, deferred tax assets
and liabilities are determined based on the difference between the financial
statements and tax bases of assets and liabilities using enacted tax rates in
effect for the year in which the differences are expected to reverse.

Impact of recently issued accounting standards
----------------------------------------------
In March 1995, the Financial Accounting Standards Board (FASB) established an
accounting standard for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to those assets to be held and
used for long-lived assets and certain identifiable intangibles to be disposed
of.  This standard requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
of an asset may not be recoverable.  This standard is effective for financial
statements beginning after December 15, 1995.  Management implemented this
standard during 1996.  The standard did not have a material impact on its
financial statements.

     During 1995, the FASB established  Financial  Accounting  Standard No. 123,
"Accounting for Stock-Based Compensation".  This Statement establishes financial
accounting and reporting standards for stock- based employee compensation plans.
This  Statement  defines a fair value based method of accounting for an employee
stock option or similar  equity  instrument and encourages all entities to adopt
that method of accounting for all of their employee  stock  compensation  plans.
However,  it also allows an entity to continue to measure  compensation cost for
those plans using the intrinsic  value based method of accounting  prescribed by
APB  Opinion  No.  25,  "Accounting  for Stock  Issued to  Employees".  Entities
electing  to  remain  with the  accounting  in  Opinion  25 must  make pro forma
disclosures of net income, and if presented,  earnings per share, as if the fair
value based method of  accounting  defined in this  Statement  has been applied.
This standard is effective for financial statements beginning after December 15,
1995.  Management  implemented  this standard  during 1996. The standard did not
have a material impact on its financial statements.






                                      F-11

<PAGE>

                              ECLIPSE CORPORATION

                         Notes to Financial Statements
                               December 31, 1996

Note A:  Nature of operations
-----------------------------
          The  Company  was  incorporated  in  Colorado  on  December 8, 1981 to
     develop  and   manufacture   a  line  of  products  for  sale  to  clinical
     microbiology laboratories throughout the United States.

          Settlement Agreement
          --------------------
          Former  President  The  Company's  former  president  was  involved in
     various alleged unauthorized transactions.  On August 28, 1995, the Company
     entered into a Settlement Agreement with the former president,  the purpose
     of which was to facilitate the former president's  satisfaction of his debt
     to the Company over a period of time.

          Concurrently  with the  execution  of the  settlement  agreement,  the
     former president issued to the Company an interest- bearing promissory note
     payable  to the  Company  in  the  amount  of  $422,774.  As a part  of the
     agreement,  within  sixty days after the note was paid in full,  the former
     president  was to remit to the Company a sum equal to  reasonable  fees and
     costs incurred by the Company relating to and arising from the unauthorized
     transactions.  This note and related expenses were paid in full on June 27,
     1996.

          Change in control 
          ------------------
          On June 27, 1996,  the Company's  former  president,  sold  26,835,000
     shares of his common  stock,  representing  40.3  percent of the  Company's
     outstanding common stock, to a new control group for approximately $561,946
     in  cash.  $63,000  was  paid  by the  purchasers  directly  to the  former
     president,  and $498,346 was paid  directly to the Company on behalf of the
     former  president,  as  payment  in full of all  amounts  due by the former
     president to the Company  pursuant to the settlement  agreement and note as
     described above.

          In connection with this sale, two prior members of the Company's Board
     of Directors  resigned and four new Board  members and three new  officers,
     including  a new  president,  affiliated  with the new  control  group were
     appointed.  The prior directors and former president retained their options
     to purchase an  aggregate of  7,000,000  shares of common stock  (4,000,000
     options exercisable at $.001 per share and 3,000,000 options exercisable at
     $.02 per share).




                                      F-12


<PAGE>

                              ECLIPSE CORPORATION

                    Notes to Financial Statements, Continued
                               December 31, 1996

Note A:  Nature of operations, continued - Discontinued Operations 
-----------------------------------------------------------------
          On October 10, 1996,  shareholders  approved the sale of the Company's
     medical test kit operations,  pursuant to an asset purchase agreement dated
     June 27, 1996,  between the Company and its former  president.  The Company
     agreed to sell its medical test kit manufacturing operations, including all
     licenses,  inventories,  and operating  assets to the former  president for
     $251,000.  In payment for the assets, the former president delivered $1,000
     in cash and a note for $250,000. This agreement was amended on December 31,
     1996, to apply a credit of $50,000  toward the purchase  price for benefits
     which the  Company  had  agreed to pay on behalf of the  former  president.
     Accordingly,  the note was reduced to $200,000.  The note bears interest at
     prime plus 1 percent and is due and payable on June 1, 2001.

          On October  10,  1996,  the Company  changed  its name from  Microtech
     Medical Systems, Inc. to Eclipse Corporation.

          The  Company  recorded  a net  gain on the  sale  of the  discontinued
     operations  of  $169,830  of which  $126,056  is  deferred  until  the note
     receivable is collected.

          Where  appropriate,  the  financial  statements  reflect the operating
     results  of  the   discontinued   operations   separately  from  continuing
     operations.  Prior  years have been  restated.  Operating  results  for the
     discontinued operations were:
<TABLE>
<CAPTION>

                                          December 31, 
                                          -------------
                                        1996          1995     
                                        ----          ----     
<S>                               <C>           <C>         
Operating revenue................ $   175,957   $   475,091 
                                  -----------   ----------- 

Income before income taxes.......     498,088       119,348
Income tax expense...............      64,315        27,000 
                                       ------        ------ 
Income from operations........... $   433,773   $    92,348
                                  ===========   ===========
</TABLE>


     Acquisition 
     ------------
          On  August  1,  1996,  the  Company  entered  into an  agreement  with
     Columbine  Home  Sales,  LLC  (CHS)  to  manage  its  manufactured  housing
     dealership. Subsequently, pursuant to option, the Company acquired portions
     of the assets of CHS and became a full-fledged  manufactured housing dealer
     on November 1, 1996. The  manufactured  housing  dealership was acquired by
     the Company  for a total  purchase  price of  $289,075,  consisting  of (1)
     13,500,000 shares of the

                                      F-13

<PAGE>

                              ECLIPSE CORPORATION

                    Notes to Financial Statements, Continued
                               December 31, 1996

Note A:  Nature of operations, concluded 
-----------------------------------------
          Company's  restricted  common stock,  (2) $29,000 cash, (3) $14,152 in
     management fee forgiveness,  and (4) $95,873 representing future adjustable
     proceeds from the sale of certain manufactured homes acquired from CHS.

          For purposes of determining the purchase price,  the fair market value
     assigned by the Company to the  restricted  common stock of the Company was
     determined by the Board of Directors to be  approximately  $.011 per share.
     The  Company  additionally  granted  CHS a  three-year  option to  purchase
     additional  shares  of  restricted  common  stock  of  the  Company  up  to
     13,500,000 shares at $.035 per share.

Note B:  Related party transactions
-----------------------------------
          In August, 1996,  the  Company   acquired  a  promissory  note  from
     Sierra-Rockies  Corporation (SRC) (formerly Gallery Rodeo International) in
     the  principal  amount of $208,133.  Payor of the note is Colorado  Escrow,
     Inc. SRC is an affiliate of the Company.

          Effective  July 1,  1996,  the  Company  acquired  a  promissory  note
     receivable and a deed of trust from SRC for $450,000.  The principal amount
     of the  note is  $500,000  and the  payor  is Elk  Creek  Partners  Limited
     Partnership, a Minnesota LLP (D&D Gaming).

          Effective August 1, 1996, the Company agreed to manage CHS in exchange
     for 2 percent of gross  sales.  Effective  November  1, 1996,  the  Company
     acquired  all of the assets of CHS in  exchange  for  13,500,000  shares of
     common stock and a waiver of commissions  totaling $14,152.  Two members of
     CHS are also directors and shareholders of the Company.

          The Company paid to InnerCircle Group Incorporated (IGI), an affiliate
     of the Company,  management  fees  totaling  $65,000 per month for 6 months
     during the year ended  December 31, 1996.  IGI also forgave fees during the
     year totaling  $90,000.  The principal  shareholders of IGI are also either
     principal shareholders or directors of the Company.

          The Company advanced $65,500 to SRC during the year ended December 31,
     1996.  During 1996,  $24,630 of the  advances  were repaid and $40,870 were
     reclassified to prepaid management fees.



                                      F-14

<PAGE>

                               ECLIPSE CORPORATION

                    Notes to Financial Statements, Continued
                               December 31, 1996
<TABLE>
<CAPTION>

Note C:  Notes receivable
-------------------------

          Notes receivable at December 31, 1996 consisted of the following:
<S>                                                                  <C>    
Note receivable from affiliate, interest
at 7.50 percent due in monthly installments
of $1,301, balance due November 27, 1997, 
collateralized by real estate ...............................         $ 208,134

Note receivable from officer and director,
non-interest bearing, due on demand ..........................           20,000

Note receivable from D&D Gaming, interest at
10.00 percent due in monthly
installments of $4,167, balance due July 13, 2000,
collateralized by real estate ................................          500,000

Note receivable from former president,
interest at 9.25 percent due in monthly
installments of $1,542, balance due
June 1, 2001 .................................................          200,000
     -- ----                                                            -------
                                                                        928,134

Less: Discounts ..............................................          (47,717)
Current maturities ...........................................         (228,134)
                                                                       -------- 
                                                                      $ 652,283
                                                                      =========
                                           
</TABLE>

<TABLE>
<CAPTION>

Note D:  Property and equipment 
--------------------------------
     Listed below are the major classes of property and equipment as of December
31, 1996:
<S>                                                                   <C>  
Land, leasehold improvements .............................            $  72,346
Building .................................................               21,334
Computer equipment .......................................                3,859
Furniture and fixtures ...................................               46,369
                                                                        143,908
Less: accumulated depreciation ...........................                 (221)
                                                                           ---- 
                                                                      $ 143,687
                                                                      =========
</TABLE>

     Depreciation  expense for the years ended  December  31, 1996 and 1995
     totaled $221, and $9,113.



                                      F-15


<PAGE>

                              ECLIPSE CORPORATION

                    Notes to Financial Statements, Continued
                               December 31, 1996

Note E:  Notes payable
----------------------
<TABLE>
<CAPTION>
          Notes payable at December 31, 1996 consisted of the following:

<S>                                                                   <C>  
Note to individual, interest at
15.50 percent due in monthly installments
of $3,923, balance due August 25, 1997,
collateralized by real estate ................................          $303,793

Note to individual, interest at 18.00
percent due in monthly installments of
$2,475, balance due June 4, 1997,
collateralized by note receivable ............................           165,000

Note to RAM Holding, Corp., interest at
12.00 percent, balance due December 2,
1996, currently in default,
collateralized by real estate ................................            60,000
                                                                        $528,793
</TABLE>


Note F:  Stockholders' equity 
------------------------------
          During 1996, the Company's  shareholders approved the authorization of
     500,000 shares of $.0005 par value preferred  stock.  The preferred  shares
     may be issued as and when the Board of Directors  shall determine in one or
     more  series.  The Board of  Directors  is  vested  with the  authority  to
     establish and designate  series,  to fix the number of shares therein,  and
     the  variations in the relative  rights,  preferences,  and  limitations as
     between  series,  including  voting  powers,  number of shares,  dividends,
     redemption privileges and conversion rights.

          The Company has  reserved  10,000,000  shares of its common  stock for
     issuance  under the terms of an  incentive  stock  option  plan,  which was
     adopted  during  1986.  Under the  plan,  the  Board of  Directors  has the
     authority to grant, with certain  restrictions,  stock options to employees
     of the Company.  In a prior year, the Company had granted 7,500,000 options
     with an exercise  price of  approximately  $.002 per share to the Company's
     former president. The options were exercised during 1996.






                                      F-16


<PAGE>

                              ECLIPSE CORPORATION

                    Notes to Financial Statements, Continued
                               December 31, 1996

Note F:  Stockholders' equity, continued
----------------------------------------
          In prior years,  the Company granted  12,000,000  non-qualified  stock
     options,  with an  exercise  price of $.001  per  share,  primarily  to the
     Company's former president and to the directors.  During 1994, options were
     exercised to purchase 8,000,000 shares of common stock (including 7,000,000
     options of the former  president).  The outstanding  options are vested and
     exercisable  through  December  1997  (1,000,000  options) and October 1998
     (3,000,000 options). In February 1996, an additional 3,000,000 options were
     granted to the Company's two Board members.  These options are  exercisable
     at $.02 per share for five years.

Note G:  Income taxes
---------------------
          Deferred tax assets and liabilities result from temporary  differences
     between  financial  statement and tax bases of assets and liabilities.  The
     amounts  which give rise to the net  deferred tax asset  (liability)  as of
     December 31, 1996 and 1995, are as follows:
<TABLE>
<CAPTION>

                                                              December 31,            
                                                              ------------
                                                           1996          1995     
                                                           ----          ----     
<S>                                                   <C>             <C>  
Deferred tax assets:
Note receivable from former president ..........      $    --         $  79,000
Compensation on options granted at
less than fair market value ....................           --            22,000
Net operating loss carryforward ................         56,705            --
Other, net .....................................           --             7,000
                                                                          -----
                                                         56,705         108,000

Valuation allowance ............................        (56,705)        (39,000)
                                                        -------         ------- 

NET DEFERRED TAX ASSET .........................      $    --         $  69,000
                                                      ==========      ==========
</TABLE>





                                      F-17

<PAGE>

                              ECLIPSE CORPORATION

                    Notes to Financial Statements, Concluded
                               December 31, 1996

Note G:  Income taxes, continued 
---------------------------------
          Income tax expense  differed from the amounts computed by applying the
     U.S.  Federal  income  tax  rates to  pretax  earnings  as a result  of the
     following:
<TABLE>
<CAPTION>

                                                                December 31,  
                                                                ------------  
                                                             1996          1995    
                                                             ----          ----    
<S>                                                    <C>            <C>       
Computed "expected" tax expense ...................   $       25 %   $     34 %
Changes in income taxes resulting from:
     State income taxes ............................            2 %          2 %
Valuation allowance ................................            - %         (9)%
Permanent differences ..............................            - %         (3)%
Other ..............................................          (14)%         (1)%
                                                                ---           --  
                                                       $       13 %   $     23 %
                                                         ==========     ========  
</TABLE>

Note H:  Commitments
--------------------

          The Company  leases land under an operating  lease that expires in May
     1999.  Rent expense  under the lease for the years ended  December 31, 1996
     and 1995 was  $5,000  and  $-0-,  respectively.  The total  minimum  rental
     commitments at December 31, 1996 are as follows:

          1997.................................. $ 60,000
          1998.................................. $ 60,000
          1999.................................. $ 25,000



                                      F-18