UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                           Washington, D.C. 20549

                               FORM 10-KSB/A1

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

For the fiscal year ended December 31, 1996

                                     OR

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

For the transition period from              to

Commission file number 0-24520

                          IMSCO TECHNOLOGIES, INC.
           (Exact name of registrant as specified in its charter)

                 DELAWARE                                04-3021770
     (State or other jurisdiction of                  (I.R.S. Employer
      incorporation or organization)                 Identification No.)

 40 Bayfield Drive, North Andover, MA                     01845
(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code: (978) 689-2080

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

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


[X]   Indicate by check mark if disclosure of delinquent filers pursuant to 
      Item 405 of Regulation S-K is not contained herein, and will not be 
      contained, to the best of registrant's knowledge, in definitive proxy 
      or information statements incorporated by reference in Part III of 
      this form 10K or any amendment to this Form 10K.

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

      The aggregate market value of common stock held by nonaffiliates on 
      December 31, 1996 was $7,708,208.

      The number of shares of the Registrant's common stock outstanding on 
      December 31, 1996 was 6,092,425.



                          IMSCO TECHNOLOGIES, INC.
                              AND SUBSIDIARIES
                      (A Development Stage Enterprise)

                            FINANCIAL STATEMENTS
                      As of December 31, 1996 and 1995


         [FORM OF LETTERHEAD OF GORDON, HARRINGTON & OSBORNE, P.C.]

                        INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders
 of Imsco Technologies, Inc.:

We have audited the accompanying consolidated balance sheet of Imsco
Technologies, Inc. (a development stage enterprise) and subsidiaries as of
December 31, 1996 and 1995, and the related consolidated statement of
operations and deficit and cash flows for the years ended December 31, 1996 and
1995 and the cumulative amounts from July 9, 1992 (inception of the current
development stage) to December 31, 1996. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Imsco Technologies,
Inc. (a development stage enterprise) and subsidiaries as of December 31, 1996
and 1995 and the results of their consolidated operations and their
consolidated cash flows for the years ended December 31, 1996 and 1995 and the
cumulative amounts from July 9, 1992 (inception of the current development
stage) to December 31, 1996 in conformity with generally accepted accounting
principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company incurred a net loss of $1,062,758 during the year ended December
31, 1996. As discussed in Notes 1, 8 and 9, the Company has suffered continuing
losses from now discontinued losses and development stage operations. The
continuing losses raise substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

As described in Note 15 to the financial statements, the Company has corrected
an error in the accounting for common stock and prepaid advertising credits.

                                       /s/ Gordon, Harrington & Osborn, PC

North Andover, MA
April 2, 1997
(Except as to Note 14 which is as of May 28, 1997 and Note 15 which is as of 
November 6, 1997)


                  IMSCO TECHNOLOGIES, INC. and SUBSIDIARIES
                      (A Development Stage Enterprise)
                         CONSOLIDATED BALANCE SHEET
                      As of December 31, 1996 and 1995

<TABLE>
<CAPTION>
                                                      1996              1995
                                                      ----              ----

<S>                                               <C>               <C>
Current assets:
  Cash and cash equivalents                       $    450,880      $      8,634
  Miscellaneous receivable                             200,000
                                                  ------------------------------
      Total current assets                             650,880             8,634
                                                  ------------------------------

Property and equipment:
  Equipment & furniture                                151,717            76,672
  Leasehold improvements                                 5,845             4,900
  Less accumulated depreciation                        (78,246)          (78,246)
                                                  ------------------------------
      Net property & equipment                           79,316            3,326
                                                  ------------------------------

Other assets:
  Organization costs, net of amortization of
   $28,060                                                  100              100
  Deposits                                               21,648              390
  Due from officer                                                           530
                                                    ----------------------------
      Total other assets                                 21,748            1,020
                                                    ----------------------------
      Total assets                                  $   751,944      $    12,980
                                                    ============================

      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
  Accounts payable                                  $    28,877      $    52,927
  Accrued payroll taxes                                  10,550            2,044
  Accrued expenses                                       38,456            8,372
                                                    ----------------------------
      Total current liabilities                          77,883           63,343
                                                    ----------------------------

Minority interest                                           -0-              -0-

Stockholders' equity (deficit):
  Common stock, par value $.001 per share,
   15,000,000 shares authorized; 6,092,425 issued
   and outstanding and 3,000,000 shares authorized;
   2,994,839 issued and outstanding, respectively         6,092            2,995

  Preferred stock, par value $.001 per share,
   1,000,000 shares authorized, -0- shares issued
   and outstanding                                            0                0

  Additional paid-in capital                          5,078,089        1,794,004

  Less:  Prepaid advertising credits receivable      (1,500,000)

  Accumulated deficit:
    Development stage                                (2,289,212)      (1,226,454)
    Discontinued operations                            (620,908)        (620,908)
                                                    ----------------------------
      Total accumulated deficit                      (2,910,120)      (1,847,362)
                                                    ----------------------------
      Total stockholders' equity (deficit)              674,061          (50,363)
                                                    ----------------------------

      Total liabilities and stockholders equity
       (deficit)                                    $   751,944      $    12,980
                                                    ============================
</TABLE>

                   See accompanying notes to consolidated
                            financial statements.

                  IMSCO TECHNOLOGIES, INC. and SUBSIDIARIES
                      (A Development Stage Enterprise)

              CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
        For the Years Ended December 31, 1996 and 1995 and Cumulative
   Amounts from July 9, 1992 (inception of the current development stage)
      
<TABLE>
<CAPTION>
                                                                Cumulative Amounts
                                                                  from current
                                                                   development
                                     1996             1995            stage
                                     ----             ----      ------------------

<S>                               <C>              <C>             <C>
Operating expenses:
  Development expense             $    53,838      $   30,759      $  196,863
  Salaries and wages                   42,087          82,645         245,849
  Officers' salaries                   61,375         110,458         333,069
  Payroll taxes                        10,006          20,407          55,270
  Outside labor                                                       120,350
  Professional services               458,483         116,434         683,545
  Public relations                      1,800                           1,800
  Rent                                 22,470          15,088          79,998
  Insurance                            22,344          12,553          54,838
  Travel & business meetings           35,222           8,754          66,542
  Auto expense                          3,716           2,580          24,292
  Telephone & utilities                 9,199           4,226          33,697
  Office expense                       25,905           3,468          40,247
  Equipment rental                      4,883                           8,345
  Contributions                                                            35
  Corporate fees                        6,496           1,328          40,605
                                  -------------------------------------------
      Total operating expenses        757,824         408,700       1,985,345
 
Other income (expense):
  Interest & dividend income            3,022           3,070           6,092
  Interest expense                   (307,500)              0        (309,047)
                                  -------------------------------------------

Loss before provision for income
 taxes                             (1,062,302)       (405,630)     (2,288,300)

Provision for income taxes               (456)           (456)           (912)
                                  -------------------------------------------

Net loss from development          (1,062,758)       (406,086)    $(2,289,212)
                                                                  ===========

Accumulated deficit-development
 stage at beginning of year        (1,226,454)       (820,368)
                                  ---------------------------

Accumulated deficit-development 
 stage at end of year              (2,289,212)     (1,226,454)
                                  ---------------------------

Accumulated deficit-discontinued
 operations                          (620,908)       (620,908)
                                  ---------------------------
     Total accumulated deficit    $(2,910,120)    $(1,847,362)
                                  ===========================

Net loss per common share         $      (.32)    $      (.14)
                                  ===========================

Weighted average number of 
 shares outstanding                 3,274,954       2,899,790
                                  ===========================
</TABLE>

        See accompanying notes to consolidated financial statements.


                  IMSCO TECHNOLOGIES, INC. and SUBSIDIARIES
                      (A Development Stage Enterprise)

                    CONSOLIDATED STATEMENT OF CASH FLOWS
        For the Years Ended December 31, 1996 and 1995 and Cumulative
   Amounts from July 9, 1992 (inception of the current development stage)

<TABLE>
<CAPTION>
                                                                                       Cumulative Amounts
                                                                                          from current
                                                                                          development
                                                           1996             1995             stage
                                                           ----             ----       ------------------

<S>                                                     <C>              <C>              <C>
Cash flows for operating activities:
  Cash received from dividends and interest             $     3,022      $    3,070       $     6,092
  Cash received from customers                                                                 57,004
  Cash received from research and testing                                                       8,187
  Cash received from unemployment taxes                                                           170
  Cash received from travel reimbursements
   and other rebates                                                            408               938
  Cash  paid to suppliers and employees                    (758,406)       (320,126)       (1,802,508)
                                                        ---------------------------------------------
     Net cash used by operating activities                 (755,384)       (316,648)       (1,730,117)
                                                        ---------------------------------------------

Cash flows form investing activities:
  Prepaid Research Testing                                                                     (7,734)
  Purchase of Fixed Assets                                  (75,990)                          (78,538)
                                                        ---------------------------------------------

     Net cash provided (used) by investing activities       (75,990)                          (86,272)
                                                        ---------------------------------------------

Cash flows from financing activities:
  Interim Loan financing                                    300,000                           385,000
  Proceeds from issuance of common stock                    973,620         162,000         1,896,376
                                                        ---------------------------------------------
     Net cash provided by financing activities            1,273,620         162,000         2,281,376
                                                        ---------------------------------------------

Net increase (decrease) in cash and  cash equivalents       442,246        (154,648)          464,987
Cash and cash equivalents at beginning of year                8,634         163,282           (14,107)
                                                        ---------------------------------------------
Cash and cash equivalents at end of year                $   450,880      $    8,634       $   450,880
                                                        =============================================

      RECONCILIATION OF NET LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES

Net loss                                                $(1,062,758)     $(406,086)       $(2,289,212)
                                                        ---------------------------------------------
Increase in miscellaneous receivable                       (200,000)                         (200,000)
Decrease in Due from Officers                                   530                              (120)
Depreciation and amortization                                                                   2,613
Contract Services paid with common stock                    213,562        107,013            437,045
Interest paid with common stock                             300,000                           300,000
Increase (decrease) in accounts payable                     (24,050)       (14,798)           (35,574)
Increase (decrease) in accrued payroll taxes                  8,506        (11,399)            10,550
Increase in accrued expenses                                 30,084          8,372             38,456
Decrease (increase) in deposits                             (21,258)           150            (16,973)
Decrease in accounts receivable                                                                 2,998
Decrease in inventory and assets                                               100             20,100
                                                        ---------------------------------------------
    Total adjustments                                       307,374         89,438            559,095
                                                        ---------------------------------------------

Net cash used by operating activities                   $  (755,384)     $(316,648)       $(1,730,117)
                                                        =============================================
</TABLE>

        See accompanying notes to consolidated financial statements.


                          IMSCO TECHNOLOGIES, INC.
                      (A Development Stage Enterprise)

          CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
               FOR THE YEARS ENDED DECEMBER 31, 1996 and 1995

<TABLE>
<CAPTION>
                                                                                                             Total
                                                       Additional                         Prepaid            Stockholders'
                                           Common      Paid-in          Accumulated       Advertising        Equity 
                                           Stock       Capital          Deficit           Receivable         (Deficit)
                                           ------      ----------       -----------       -----------        -------------

<S>                                        <C>         <C>              <C>               <C>                <C>
Balance at December  31, 1994              $2,751      $1,525,235       $(1,441,276)                         $    86,710

Issuance of shares of $.001 par
 value for $1.25 per share                     97         120,403                                                120,500

Issuance of shares  of $.001 par
 value for contract  services performed       119         106,894                                                107,013

Issuance of shares  of $.001 par
 value for 1.55 per  share                     11          16,989                                                 17,000

Issuance of shares  of $.001 par
 value for $1.50 per  share                    17          24,483                                                 24,500

Loss from development for the year
 ended December  31, 1995                                                  (406,086)                            (406,086)
                                           -----------------------------------------------------------------------------
Balance at December  31, 1995               2,995       1,794,004        (1,847,362)                             (50,363)

Issuance of subsidiary stock                               10,000                                                 10,000

Issuance of shares of $.001 par value
 for $2.00 per share                           10          19,990                                                 20,000

Issuance of shares of $.001 par value          47             (47)

Issuance of shares of $.001 par value
 in connection with loan                      150         299,850                                                300,000

Issuance of shares of $.001 par value
 for contract services                        284         213,278                                                213,562

Issuance of shares of $.001 par value
 in payment of loan                           227         299,773                                                300,000

Issuance of shares of $.001 par value
 for prepaid advertising                    1,136       1,498,864                         $(1,500,000)                 0

Issuance of shares of $.001 par value
 at $1.32 per share                           775         942,845                                                943,620

Issuance of shares of .001 par value
 for subsidiary stock                         468            (468)      

Loss from development for the year
 ended December 31, 1996                                                 (1,062,758)                          (1,062,758)
                                           -----------------------------------------------------------------------------
Balance at December 31, 1996               $6,092      $5,078,089       $(2,910,120)      $(1,500,000)       $   674,061
                                           =============================================================================
</TABLE>

      The accompanying notes are an integral part of these statements.


                  IMSCO TECHNOLOGIES, INC. and SUBSIDIARIES
                      (A Development Stage Enterprise)

                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         December 31, 1996 and 1995

1.    Summary of Significant Accounting Policies:

      Organization:

      In July 1996, IMSCO, Inc. was reincorporated in Delaware as IMSCO
Technologies, Inc., the Company filed a Certificate of Incorporation in
Delaware incorporating a new wholly-owned subsidiary, IMSCO Technologies, Inc.
The Board of Directors of the Company at a meeting held in May 1996 voted,
subject to the adoption by the stockholders, to merge into its wholly-owned
subsidiary, IMSCO Technologies, Inc., a Delaware corporation. On July 9, 1996,
the stockholders of IMSCO, Inc., voted to approve the change of corporate
domicile from Massachusetts to Delaware. Therefore, on July 18, 1996, there
remained one surviving corporation and the name surviving corporation became
IMSCO Technologies, Inc. As of the effective date of the merger, each
stockholder of the Company held one share of common stock, par value $.001 per
share, of IMSCO Technologies, Inc. for each one share of common stock, par
value $.001 per share, of IMSCO, Inc. previously held by him.

      Imsco Technologies, Inc., a Delaware corporation, is currently a
development stage enterprise which has developed a core technology that
achieves molecular separation with innovative applications of electrostatics.
Until July 7, 1992, the Company was engaged in the sale of an automated
luminometer and an accompanying reagent system that measures raw material for
microbiogical contamination. The Company discontinued operations and liquidated
the remaining inventory of reagents on April 16, 1993. Due to a lack of demand
for the technology developed, the Company changed its focus and began applying
its engineering and medical talents to the development of a separation system.
No revenue has been received from current products to date. The technology
developed has two prototypes. Tests of the Company's decaffeination technology
have successfully removed caffeine from coffee. In addition, The Plasma Pure
has been tested and can remove viruses from plasma.

      There are 15,000,000 shares of common stock and 1,000,000 shares of
preferred stock authorized, of which 6,092,425 and -0-, respectively are issued
and outstanding at December 31, 1996.

      The Company's subsidiaries, Decaf Products, Inc. (DPI) and BioElectric
Separation and Testing, Inc.; (BEST) (the subsidiaries) were formed in 1995.
DPI was formed to market a unique proprietary technology to decaffeinate
coffee. BEST was founded to create systems to improve human therapy, by
developing new diagnostics and improved methods for production and use of
drugs, biologics, and extracorporeal devices. As of December 31, 1996 and
December 31, 1995 the subsidiaries had minimal activity, did not own any assets
and are not liable for any liabilities.

      Principles of Consolidation:

      The consolidated financial statements include the accounts of the Company
and its subsidiaries Decaf Products, Inc. (DPI) and BioElectric Separation and
Testing, Inc, (BEST). All significant intercompany accounts and transactions
have been eliminated in consolidation.

      Property and Equipment:

      Property and equipment are stated at cost. Significant additions or
improvements extending asset lives are capitalized; normal maintenance and
repair costs are expended as incurred. Depreciation is provided on the
straight-line method over the estimated useful lives of the assets ranging from
five to ten years. No depreciation expense was charged to development stage
operations for the years ended December 31, 1996 and 1995.

      Cash Equivalents:

      The Company considers all highly liquid investments with an original
maturity of less than three months to be cash equivalents.

      Loss per Common Share:

      Loss per common share is based on the weighted average number of common
shares and common equivalent shares outstanding during the year ended December
31, 1996 and 1995.

      Estimates:

      Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the estimates
that were assumed in preparing the financial statements.

2.    Leases:

      In 1993, the Company entered into an operating lease for office space
which expired in August, 1996. The Company is currently leasing the premises as
a tenant-at-will. Rental expense for the operating lease was $14,050 and
$15,088 for the years ended December 31, 1996 and 1995, respectively. Under the
terms of the lease the Company is responsible for 15% of operating expense and
maintenance costs of the leased property, including 15% of any increase in real
estate taxes. The Company is responsible for all utilities.

      In September 1996, the Company established an office at 950 Third Avenue,
New York, New York, consisting of approximately 2,500 square feet of space,
with the intention of conducting its sales, marketing and finance related
activities. The Company has decided that it will be more efficient and cost
effective to run all of its activities from the North Andover office for the
near future and is negotiating to sub-lease or assign the lease at 950 Third
Avenue to an unrelated party. The lease at 950 Third Avenue, New York, New
York, is for a term of five years at an annual base rental of $32 per square
foot. The lease contains standard pass-throughs by the unaffiliated landlord of
increase in real estate taxes and operating expenses after the first year of
occupancy. The 950 Third Avenue lease expires on January 31, 2002. Rental
expense for the above lease was $8,020 for the year ended December 31, 1996.

      Minimum future lease payments under noncancelable operating leases as of
December 31, 1996 are as follows:

      Year ending December 31:

            1997                              $78,575
            1998                               78,575
            1999                               78,575
            2000                               78,575
            2001                               78,575
            2002                                6,548

      The Company entered into various leases for equipment during the year
ended December 31, 1996. Minimum future lease payments under these
noncancelable operating leases as of December 31, 1996 are as follows:

            1997                              $14,676
            1998                               14,676
            1999                               11,045

      Rental expense for the above leases was $4,883 for the year ended
December 31, 1996.

3.    Federal and State Income Taxes: 

      As of December 31, 1996, the Company had net operating loss carryforwards
for federal income tax purposes which expire as follows:

            2000                              $      4,180
            2001                                   181,180
            2002                                   233,280
            2003                                    88,125
            2004                                    70,850
            Thereafter                           2,332,140
                                                ----------
                                                $2,909,755
                                                ==========

      The deferred tax asset from the benefit of the losses is $436,400 and
$277,050 for the years ending December 31, 1996 and 1995, respectively which is
offset by an equivalent reserve account each year.

      As of December 31, 1996, the Company had net operating loss carryforwards
for state income tax purposes which expire as follows:

            1997                              $   259,185
            1998                                   40,825
            1999                                  513,690
            2000                                  405,630
            2001                                1,062,300
                                               ----------
                                               $2,281,630
                                               ==========

      The deferred tax asset from the benefit of the losses is $216,750 and
$115,800 for the years ending December 31, 1996 and 1995, respectively which is
offset by an equivalent reserve account each year.

      State excise tax expense amounted to $456 for the years ended December
31, 1996 and 1995.

4.    Related Party Transactions:

      In August 1996, Hampton Tech Partners, LLC acquired $300,000 in
promissory notes from the Company and 150,000 shares of Common Stock for the
total consideration of $300,000. There was effectively $300,000 of interest
expense recognized on this loan as the value of the common stock issued. On
September 20, 1996, the Company entered into a Purchase Agreement with Hampton
Tech Partners II, LLC wherein Hampton Tech Partners II, LLC acquired 761,000
shares of Common Stock for $1,004,520 in cash or $1.32 per share. Private
placement expenses of $77,400 were incurred during this transaction, reducing
net cash proceeds to $927,120. Hampton Tech Partners II received 227,273 shares
in repayment of the $300,000 promissory notes with Hampton Tech Partners, LLC
and 129,151 shares in payment of private placement fees. Mr. Scott Robinson, a
recently elected director of the Company, is a member of Hampton Tech Partners
and Hampton Tech Partners II, LLC. Mr. Robinson's brother, Mr. Jeffrey Robinson
is the sole shareholder of Hampton Partners Investments, Inc., the Managing
Member of Hampton Tech Partners and Hampton Tech Partners II, LLC.

      On September 20, 1996, the Company entered into the Media Purchase
Agreement with Proxhill Marketing Ltd., wherein Proxhill Marketing Ltd. Agreed
to sell $1,500,000 of media credits to the Company in consideration for the
Company issuing 1,136,364 shares of Common Stock, representing a price of $1.32
per share. (Notes 11 and 15). In connection with the private placement of the
Shares of Hampton Tech Partners II, LLC, Hampton Tech Partners and Proxhill
Marketing Ltd., First Capital Investments, Inc. a broker-dealer which is a
member of the National Association of Securities Dealers, Inc. ("NASD"),
received 242,272 Class A Warrants entitling it to acquire Common Stock for the
price of $1.45 per Share exercisable over a period ending July 31, 2001. For
advertising and marketing services rendered to the Company in 1996 and 1997,
Proxhill Marketing Ltd. also received 127,262 Class D Warrants, entitling it to
acquire Common Stock for the price of $1.32 per share for a period ending July
31, 2001. As of December 31, 1996, the registration statement for the Class A
Warrant Common Stock and Class D Warrant Common Stock had not been declared
effective.

      In 1996, Mr. Sol L. Berg, a Director and President of the Company,
received 150,000 shares of Common Stock in exchange for shares of common stock
in Decaf Products, Inc. (DPI) based on a conversion of .60 IMSCO Technologies,
Inc. shares for 1.00 Decaf Products, Inc. shares. In 1996, Mr. James G. Yurak,
a Director and President of the DPI subsidiary, received 75,000 shares of
Common Stock in exchange for shares of common stock in Decaf Products, Inc.
(DPI) based on a conversion of .60 IMSCO Technologies, Inc. shares for 1.00
Decaf Products, Inc. shares. Mr. Yurak received another 75,000 shares of Common
Stock in February 1997 upon the one year anniversary of his employment
agreement with DPI. In 1996, Dr. Alan Waldman entered into an understanding
that he shall receive 100,000 shares of Common Stock representing payment for
services due him under his consulting agreement through December 31, 1996, with
the shares vesting and being issued on January 1, 1997. In 1996, David E.
Fleming, a member of Epstein, Becker & Green, P.C., counsel to the Company, was
granted 90,000 shares of the Company's Common Stock in exchange for shares of
Common Stock in Decaf Products, Inc. (DPI) based on a conversion of .60 IMSCO
Technologies, Inc. shares for 1.00 Decaf Products, Inc. shares, which shares
will vest on January 1, 997. In 1996, Mr. Vernon Oberholtzer, a former Director
of the Company who resigned in February 1997, received stock options to acquire
10,000 shares for a price of $1.32, exercisable over a period ending December
31, 1999. In 1996, Universal Sales, Inc. ("Universal"), a sales and marketing
company of which Mr. Victor Bauer, a Director of the Company, is President and
a 50% shareholder, received cash compensation in the amount of $31,500, and
75,000 shares of Common Stock for services rendered to the Company, including
the recruitment of the services of Mr. Abramson for the Company.

      During the year ended December 31, 1995, a director of the Company, David
E. Fleming, Esquire was also a partner with Campbell and Fleming, P.C., a law
firm which provides certain services for the Company. As of July 31, 1995,
David E. Fleming had resigned as a director of the Company.

      In April 1994, the Company entered into a "best efforts" placement letter
agreement with D.H. Vermogensverwaltungs-und Beteiligungsgesellschaft mbH, a
German investment company ("DH"), for 500,000 shares of common stock at a
minimum of $.90 per share. This placement letter agreement was amended on
August 29, 1994. DH also arranged the placement of another 80,000 shares of
Common Stock as a supplement to the Regulation S placement. Mr. Dirk Hagee, a
former director of IMSCO is the managing director and majority shareholder of
DH.

      Upon closing of the offering, the Company paid DH a commission of $52,200
which is at the rate of ten percent (10%) of all monies raised in that offering
and also granted to DH warrants to 116,000 shares of common stock of the
Company. These warrants are exercisable for up to five years after issuance at
the same price paid by purchasers of the placement. Additionally, the placement
agreement provides that upon completion of the placement, DH shall have the
right to designate two directors of a five member board of directors of the
Company for a period of three years. See Note 5 for agreements.

5.    Agreements:

      Effective as of September 1, 1996, the Company entered into an employment
agreement with Sol L. Berg providing for Mr. Berg's employment as the Company's
President for a three year term. Mr. Berg's salary under this agreement is
$125,000 per year. Mr. Berg is also eligible to receive an annual bonus. In the
event that Mr. Berg's employment with the Company is terminated by the Company
other than for cause, Mr. Berg shall receive one year's base salary. In
connection with the exchange of his DPI stock for the Company's Common Stock,
Mr. Berg received 150,000 shares of the Company's Common Stock.

      Effective February 23, 1996, as amended effective as of September 1,
1996, the Company entered into an employment agreement with James G. Yurak
providing for Mr. Yurak's employment as the DPI's President and Chief Executive
Officer for a three year term. Mr. Yurak's salary under this agreement is
$75,000 for the first year, $125,000 for the second year and $150,000 for the
third year. Mr. Yurak is also eligible to receive an annual bonus. Mr. Yurak
was also granted 75,000 shares of the Company's Common Stock upon signing his
employment agreement and 75,000 shares after one full year of employment.

      Effective as of September 1, 1996, the Company entered into an employment
agreement with James Crose providing for Mr.Crose's employment as the Company's
Vice President of Engineering for a two year term. Mr. Crose's salary under
this agreement is $75,000 per year.

      On August 13, 1996, the Company entered into a Business Consulting
Agreement with Mr. Edmund Abramson for a period of three years at an annual
cash compensation of $200,000, excluding benefits. The services to be rendered
by Abramson under his Consulting Agreement consist of advice and opinions to
the Company concerning business and financial problems in connection with the
operation and management of the Company, capital structuring and private and
public equity and debt financing, shareholder relations (including assistance
in the preparation of the Company's Annual Report), acquisitions, mergers, and
other similar business combinations. In the event that Mr. Abramson's agreement
with the Company is terminated by the Company, Mr. Abramson shall receive two
year's base cash compensation. Mr. Abramson was also granted 100,000 shares of
the Company's Common Stock and an option to purchase 100,000 shares of Common
Stock at $1.50 per share. For fiscal year ended December 31, 1996, Mr. Abramson
received total consulting fees of $291,666 from the Company, which consisted of
$150,000 in common stock and $141,666 in cash and accrued payments.

      On August 13, 1996, the Company entered into a three year Consulting
Agreement with WRA Consulting, Inc. a corporation having Willa Rose Abramson,
wife of Edmund Abramson ("WRA") as its sole director and shareholder. Under the
agreement, if WRA finds $1 million in capital financing for the Company, the
Company shall grant WRA 150,000 shares of Common Stock and warrants or options
to acquire an additional 150,000 shares of Common Stock at $1.50 per share. If
WRA arranges a transaction with a third party introduced by WRA which has a
consideration or value to the Company of $5 million or greater, whether through
a merger, acquisition, business combination or security placement for the
benefit of the Company, it shall receive an additional 250,000 shares of the
Company's Common Stock and 250,000 warrants to purchase Common Stock,
exercisable at $1.50 per share for a period ending December 31,1999. If the
transaction is assisting in arranging capital for the Company, it shall also
receive an investment banking fee equal to five percent of amounts in excess of
$5 million. WRA assisted in the Company's sale of the $3 million of common
stock to Hampton Tech Partners, Hampton Tech Partners II and Proxhill Marketing
Ltd. in November and December 1996. The agreement also grants WRA a bonus equal
to 5 % of the "Net Earnings" in excess of $3 million per year from the Company
if WRA is successful in arranging an equity or debt placement for the Company,
or a transaction which has a consideration or value to the Company of $5
million or greater. In consideration of its arranging the $3 million sale and
exchange of Common Stock to Hampton Tech Partners, Hampton Tech Partners II and
Proxhill Marketing Ltd., the Board of Directors determined that WRA is entitled
to receive 150,000 Class B Warrants entitling it to acquire Common Stock for
$1.50 per Share for a period ending December 31, 1999. As of December 31, 1996,
the registration statement for the Class B Warrant Common Stock had not been
declared effective.

      Effective as of September 1, 1996, Universal Sales, Inc., also entered
into a Sales Administration and Servicing Agreement ("Universal Agreement")
with the Company for a seven year term, providing a broad scope of sales
administration and services to the Company. As compensation for its services,
Universal shall receive an amount equal to 2.5 % of the Company's gross
revenues from operations in excess of $5 million per annum. Mr. Victor Bauer, a
Director of the Company, is also the President and a 50% shareholder of
Universal Sales. Additionally, under the Universal Agreement, Universal shall
be entitled to a sales commission equal to 2.5 % of the gross revenues
resulting from all sales generated through the efforts of Universal. Universal
also received $31,500 and 75,000 Shares of Common Stock as compensation for
services rendered to the Company in 1996.

6.    Research and Development Costs:

      During the year ended December 31, 1996 and 1995, the Company charged
$53,838 and $30,759, respectively to research and development expense.

7.    Nonmonetary Transactions:

      During the years ended December 31, 1996 and 1995, the Company issued
common stock for services rendered based upon the fair market value of services
received. The following summarizes the capital stock issued in lieu of cash for
services received:

<TABLE>
<CAPTION>
                                                                                Charged to Assets/
Description of            Shares         Common     Paid in        Charged      Liabilities/Equity
Service                   Issued         Stock      Capital        to Expense   Expense
--------------            ------         ------     -------        ----------   ------------------

1996
----
<S>                       <C>            <C>        <C>            <C>          <C>
Prepaid adv.              1,136,364      1,136      1,498,864                   1,500,000
Loan repayment              227,273        227        299,773                     300,000
Loan interest               150,000        150        299,850      300,000
Finance consultants         140,000        140        202,660      202,800
Private placement fees      129,151        129           (129)       
Legal fees                   15,000         15         10,747        5,138          5,624

<CAPTION>
Description of               Shares        Common     Paid in      Charged
Service                      Issued        Stock      Capital      to Expense
--------------               ------        ------     -------      ----------

1995
----
<S>                          <C>           <C>        <C>          <C>
Research                     22,000        $22        $21,978      $22,000
Accounting & auditing        74,790        $75        $60,971      $61,046
Other professional            9,510        $10        $11,004      $11,014
</TABLE>

      In addition, the Company issued 12,923 shares in payment of a prior
obligation valued at $12,953.

8.    Commitments:

      The Company entered an agreement with the University of Massachusetts to
provide certain services in connection with the testing and development of
materials for use in a decaffeinator device for the period November 1, 1994
through December 31, 1994. During the year ended December 31, 1995, the
University of Massachusetts continued to provide research services to the
Company for which it received 10,000 shares of common stock.

      In 1996, the Company entered into a collaborative Research Agreement with
the Polymer Sciences Division of the University of Akron, for further
development of the electrostatic decaffeination technology. The Company pays
$10,000 per month for the use of the University of Akron's facilities and the
dedication of certain professors to the Company's project.

      On September 20, 1996, the Company entered into the Hughes Marketing
Agreement for certain large institutional marketing of the Decaffeination
System. Hughes is a privately held corporation, based in Traverse City,
Michigan, and is one of the larger marketers of institutional coffee making
equipment and supplies in North America. The Company agreed that Hughes will
have the exclusive right to sell the DECAFFOMATIC to so-called "large
institution" coffeemaker market in North American for a period of three years.
The "large institutional" marketplace is dominated by major hotel chains and
major restaurant and fast-food chains. In exchange for these exclusive rights,
Hughes agreed to sell or purchase from the Company a minimum of $3 million
worth of units for the first year, $5 million worth of units for the second
year and $7 million worth of units the third year.

      Under the Hughes Agreement, the Company sells units of the Decaffeination
System to Hughes' customers for a stated price of $199 per unit for the
institutional coffeemakers. If Hughes fails to sell the minimum amount it must
purchase the difference for its own account to maintain the Agreement in force.
All servicing and customer calls will be performed by Hughes. In addition to
other legal remedies, the parties can terminate the Hughes Agreement if Hughes
fails to make the specified minimum amount of Decaffeination System purchases.

      Under a Media Purchase Agreement with Proxhill Marketing Ltd., it
contractually agreed to finance $1.5 million of media for the Company's public
relations and advertising campaign through Grown Marketing Services ("GROW"),
an independent marketing company. In exchange for the Company issuing 1,136,363
shares of its common stock, representing a price of $1.32 per share, the
Company acquired the $1.5 million of prepaid, dedicated media credits (the
"Media Credits") and certain media services. The Media Purchase Agreement
expires at the end of sixty (60) months or upon the depletion of the prepaid
media credits.

      On September 20, 1996, the Company entered into an agreement with NEWCO
for certain institutional manufacturing and marketing of the Decaffeination
System. NEWCO is a privately held corporation based in St. Charles, Missouri,
and is one of the larger manufacturers and distributors of institutional
coffeemaking equipment in North America. The Company agreed that NEWCO will
have the exclusive right to sell the DECAFFOMATIC to so-called "Office Coffee
Supply" ("OCS") subsection of the institutional coffeemaker market and will be
the manufacturer of the DEFAFFOMATIC for the institutional marketplace in North
American for a period of three years. NEWCO further agreed to sell or purchase
from the Company for the OCS market a minimum of 25,000 units of the product
for the first year, 50,000 units for the second year and 100,000 units the
third year. Under the NEWCO Agreement, NEWCO has also agreed to pay the costs
of making final working models, and the cost of creating moulds and related
parts for the DECAFFOMATIC device for the institutional coffeemaker
marketplace. All of the technology and final commercial model designs of the
Decaffeination System will be the property of the Company.

      Under the NEWCO Agreement, the Company sells units of the Decaffeination
System to NEWCO for a net price to the Company. The Company anticipates that
the price to be paid by NEWCO, which is still being finalized until the final
working and commercial ready components are established, will be in the range
of approximately $20 per unit for small OCS type users, ranging to $200 for
large, high volume institutional coffee brewers. NEWCO takes the Decaffeination
System and in turn incorporates it into its coffeemakers and re-sells it to a
variety of end users in the OCS marketplace. The terms of the minimum purchase
by NEWCO are mandatory and are not subject to, or conditioned upon, NEWCO's
ability to sell the units acquired. All servicing and customer calls will be
performed by NEWCO. In addition to other legal remedies, the parties can
terminate the NEWCO Agreement if NEWCO fails to make the specified minimum
number of Decaffeination System purchases.

9.    Going Concern:

      As shown in the accompanying financial statements, the Company incurred a
net loss of $1,062,758 during the year ended December 31, 1996. The significant
operating loss as well as the uncertain conditions that the Company faces
regarding sources of financing, create an uncertainty about the Company's
ability to continue as a going concern. Management of the Company has developed
a business plan to finance the Company through licensing of its technology and
individual patent rights to its subsidiaries. The plan calls for the
subsidiaries to seek partners for manufacturing and marketing. The subsidiaries
will also seek financing through a public offering. The ability of the Company
to continue as a going concern is dependent on the plan's success. The
financial statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern.

10.   Development Stage Enterprise

      On July 7, 1992, the Company discontinued regular operations relating to
the sale of an automated luminometer. On July 22, 1992, the company and The
General Hospital Corporation, doing business as Massachusetts General Hospital,
entered a research agreement for $45,100, to perform the research and
evaluation using the Company's electro-static filter. As defined by the
Financial Accounting Standards board Statement No. 7, the Company is now a
development stage enterprise and it has been devoting substantially all of its
efforts to developing, engineering and obtaining patents for new technologies
relating to separation technologies for the medical and consumer product
sectors. The Company applied for United States Patents covering its
decaffeination and Plasma Pure separation technologies in 1993. With a
prototype, marketing of this product began in December, 1993. Although no
income has been received, letters of interest and royalty agreement
negotiations have begun. The cumulative deficit during the development stage is
$1,989,212 for the period July 7, 1992 through December 31, 1996.

11.   Advertising

      The costs of advertising are expensed the first time the advertising
takes place. There was no advertising expense for the years ended December 31,
1996 and 1995, respectively. At December 31, 1996 and 1995, $1,500,000 and $
-0-, respectively, of advertising is reflected as a reduction of shareholders
equity. (Note 15).

12.   Employee Incentive Stock Options

      In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for
Stock-Based Compensation. The Company has elected to comply with the fair value
based method of accounting prescribed by SFAS No. 123 for its employee stock
option program.

      On May 21, 1996, the Board of Directors adopted the Employee Incentive
Stock Option Program (the "Option Program"), which provides for the issuance of
up to the lesser of 24% of the issued and outstanding Common Stock or 1,500,000
shares of Common Stock through the grant of incentive and non-qualified stock
options. Stock options will be issued by action of the Board of Directors or
its Compensation Committee (the "Administrator") to key employees of the
Company as a long-term incentive. Key employees will be designated by the
Administrator in its sole discretion; there are currently three employees so
designated.

      Stock options under the Option Program will provide for an exercise price
per share determined by the Administrator (but not less than the par value of
$.001), subject to tax requirements in connection with incentive stock options.
No payment will be required from participants in connection with grants. The
options will be exercisable as specified by the Administrator at the time of
grant, although the tax benefits of incentive stock options described below
will be unavailable if the option is exercised less than one year after grant.
Options will be exercisable for a period determined by the Administrator but
not in excess of 10 years after grant. As of December 31, 1996, an option to
purchase 100,000 shares of common stock at $1.50 per share was exercisable. The
weighted average fair value of the options granted during the year is $-0-.

13.   Stock Options

      In addition to the Stock Warrants described in Note F, the Company filed
a registration statement for 50,000 shares of common stock issuable upon
exercise of Class C Warrants exercisable at a price of $2.875 per share for a
period ending on December 31, 1999. As of December 31, 1996 there were no Class
C warrants outstanding and the registration statement for Class C warrant
common stock had not been declared effective.

      The following summarizes the warrants and stock options of IMSCO:

<TABLE>
<CAPTION>
                                                       Number of     Exercise Cost
                                                       Options/      Per Share of      Termination
Holder                           Description           Warrants      Common Stock      Date
------                           -----------           ---------     -------------     -----------

<S>                           <C>                      <C>           <C>               <C>
First Capital Investments       *Class A Warrants      242,272       1.45               7/31/01
Proxhill Marketing Ltd          *Class D Warrants      127,262       1.32               7/31/01
Vernon Oberholtzer            ***Stock options          10,000       1.32              12/31/99
DH Ver. Bet. MbH               **Warrants              116,000       0.90               8/29/99 (5 years after issuance)
Edmund Abramson               ***Employee Incentive
                                 stock options         100,000       1.50               5/14/01
WRA Consulting Inc.             *Class B Warrants      150,000       1.50              12/31/99
                                *Class C Warrants       50,000       2.875             12/31/99

<F*>  As of December 31, 1996, the registration statement for these securities
      had not been declared effective by the Security Exchange Commission

<F**> The warrants given to DH were awarded in 1994 at an option price which was
      the same as the price paid by purchasers of the placement it arranged.  
      Therefore no compensation expense was recorded.

<F***>During 1996, there were two major sales of stock at a price of $1.32 per
      share.  The option price of these two securities are the same or higher
      than the price per share of the two placements which is considered the 
      fair value of the common stock.  Therefore the fair value of these 
      warrants and options are $-0- and compensation or consulting expense has 
      not been recorded.
</TABLE>

14.   Notes to Financial Statements

      Subsequent to our report dated April 2, 1997, certain facts came to our
attention which required the revision of Notes 4 and 12 and additional
disclosures described in Notes 13 and 14. The following summarizes the
subsequent revisions and disclosures:

*     Note 4 has been revised to indicate that Dick Hagee is a former 
      director of IMSCO.
*     Note 12 includes additional information in compliance with (SFAS) 
      No. 123.
*     Note 13 and 14 have been added.

      The above changes did not effect our opinion dated April 2, 1997 nor the
accompanying financial statements.

15.   Financial Statement Correction

      In accordance with Staff Accounting Bulletin 4:E of the SEC, the
$1,500,000 of prepaid advertising (Media) credits (Notes 4 and 11) are being
reflected as a reduction of the stockholders equity section which originally
were accounted for as a prepaid expense for the year ending December 31, 1996.
The impact of this change was to reduce current assets, total assets and
stockholders equity by $1,500,000. Also, in the debt transaction with Hampton
Tech Partners, LLC referred to in Note 4 of the financial statements, the stock
issued in consideration of interest has been accounted for at the fair market
value of $300,000. This change had the effect of increasing the additional paid
in capital and increasing the loss by the amount of $300,000 for the year
ending December 31, 1996.

                                 SIGNATURES

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

                                       IMSCO TECHNOLOGIES, INC.
                                       By:  /s/ Sol L. Berg
                                            -------------------------------
                                            Sol L. Berg

                                       Date:  November 12, 1997

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


/s/ Sol L. Berg
---------------------------------------
Sol L. Berg, President and Director

Date: November 12, 1997


/s/ Alan Waldman
---------------------------------------
Dr. Alan Waldman, Vice President
and Director

Date: November 12, 1997


/s/ Gloria Berg
---------------------------------------
Gloria Berg, Secretary-Treasury

Date: November 12, 1997


---------------------------------------
James G. Yurak, Director

Date:


/s/ Scott Robinson
---------------------------------------
Scott Robinson, Director

Date: November 12, 1997


---------------------------------------
Victor Bauer, Director

Date: