<PAGE>



                    SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549

                                FORM 10-K

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

          For the fiscal year ended 31 JANUARY 1997 ("FISCAL 1997")

          Commission file number   0-18163   EDGAR Filing Number      000-18163
          CUSIP number           738908102   SEDAR Project Number      00004997

                         POWER PLUS CORPORATION

         (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
         (the "REGISTRANT", or the "COMPANY", or "POWER PLUS")


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  | PROVINCE OF ALBERTA, CANADA                                    52-1976897 |
  | (JURISDICTION OF INCORPORATION)      (IRS EMPLOYER IDENTIFICATION NUMBER) |
  |                                                                           |
  | 7850 WOODBINE AVENUE, SUITE 201,                                          |
  | MARKHAM, ONTARIO, CANADA                                          L3R 0B9 |
  | (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                (ZIP/POSTAL CODE) |
  |                                                                           |
  | 905-479-5683                                                              |
  | 800-769-3733 (800-POWERED)                                   905-479-8911 |
  | (TELEPHONE NUMBERS)                                          (FAX NUMBER) |
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          Securities registered pursuant to Section 12(b) of the Act:
                                     None

            Securities registered pursuant to Section 12(g) of the Act:
                           Common Stock, no par value
                                (TITLE OF CLASS)

Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.  Yes  / /    No  /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 10-K or any 
amendment to this Form 10-K.     Yes  / /     No  /X/

As of 18 July 1997, the aggregate market value of the voting stock of the 
registrant held by non-affiliates was approximately $11,341,095 based upon 
the closing price of the shares on The Alberta Stock Exchange of $1.50 per 
share. As of such date, 7,620,730 common shares (the "Common Shares") of the 
Registrant's Common Stock were outstanding. (Please refer to ITEM 7 -- 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATIONS concerning the reorganization and consolidation of the Company's 
stock on the basis of 20 to 1.)
                                                            
                DOCUMENTS INCORPORATED BY REFERENCE
None.

<PAGE>
                                                                    FORM 10-K
                                                         Fiscal Year End 1997
                                                                       Page 2

                                                    
                        BASIS OF PRESENTATION

The Company prepares its consolidated financial statements in Canadian 
dollars.  In this report all references to "$" are to Canadian dollars, 
unless otherwise noted.

                           EXCHANGE RATES

Based on the noon buying rates for cable transfers in New York City, 
certified for customs purposes by the Federal Reserve Bank of New York, the 
exchange rate on 18 July 1997 was C$1 = US$1.37.  For additional information 
on exchange rates see ITEM 6 -- SELECTED FINANCIAL DATA - EXCHANGE RATES.


                               PART I

ITEM 1 --      BUSINESS

A.   GENERAL DEVELOPMENT OF BUSINESS
1.   TODAY
     On 31 July 1996, the Company changed its name to Power Plus
     Corporation, signifying a new beginning and the launch of
     POWERFUL STUFF, a unique specialty niche retailing concept
     focused on wireless communication products and services
     (beepers/pagers, cellular phones, Personal Communications
     Systems (PCS) and related service contracts) together with
     portable electronics (the latest in hand-held electronic
     communications, entertainment, business and lifestyle
     products). This bold move represents a broad departure from
     the Company's past.

     As of 18 July 1997, the active companies in the Power Plus
     Group include: Power Plus Corporation, Power Plus USA, Inc.,
     Power Plus Canada, Inc. and First Olympia Holdings, Inc.
     (collectively "Power Plus" or the "Company").


                       [Corporate Organization Chart]
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                                                                        Page 3

2.  REORGANIZING, RESTRUCTURING, REFINANCING AND REBUILDING
    On 1 February 1996, the Company announced its Reorganization
    Plan which was disclosed in detail in the former FORM 10-K
    registration statement for Fiscal 1996 dated 19 June 1996.

    In overview, the Reorganization Plan is subdivided into two
    parts: PLAN 2000, the Company's 5-year business plan
    prescribing how the Company proposes to build its business
    to in excess of 1000 stores by the end of the Year 2000;
    and, the Financing Plan which sets out the manner in which
    the Company proposes to provide a total of $49.1 million
    over the initial 3 years of PLAN 2000 to finance its
    requirements -- $33.7 million of which remains over the next
    2 years.

    The Reorganization Plan and the related Plan of Arrangement
    proposed by new management received shareholder, regulatory
    and court approval in July 1996. Among other matters, the
    Company's proposal included:

         -  Changing the Company's name to POWER PLUS 
            CORPORATION.

         -  Reorganizing and consolidating the outstanding 
            share capital, requiring a reverse-split on the 
            basis of every twenty shares before consolidation
            being reorganized and consolidated into one 
            consolidated share plus an exchange right.

         -  Funding the Company's Reorganization Plan and 
            PLAN 2000 by implementing its Financing Plan.

         -  Consolidating corporate headquarters into offices
            in Toronto, Canada.

         -  Establishing new retail operations in the US 
            and Canada.

         -  Putting new management in place.

    PLAN 2000 is the blueprint providing the foundation for the
    Company's launch of POWERFUL STUFF  in late Fiscal 1997.
    The POWERFUL STUFF specialty retail chain is conceived to be
    a branded North American distribution channel focused on
    PORTABLE LIFESTYLE COMMUNICATIONS, WEARABLE FASHION
    ELECTRONICS and PALM-TOP BUSINESS TECHNOLOGY -- to meet the
    expanding demand for wireless communication products and
    services plus portable electronics. Power Plus has combined
    these distinct merchandising segments into a single retail
    store -- POWERFUL STUFF!  The pagers/beepers and cell phones
    featured at POWERFUL STUFF stores are a source of
    significant per transaction revenue, contributing additional
    strong secondary margins through accessory and airtime sales
    plus activation fees, and generating recurring revenues from
    customer airtime and renewals.  The fashion electronics and
    palm-top business technology segments of the business, plus
    accessories and batteries, also contribute complementary
    revenues.

    PLAN 2000 envisions a 5-year expansion program to over 1000
    stores by rolling out new stores in a district cluster
    marketing approach throughout seven geographic North
    American regions -- the Southeast, Mid-Atlantic, Northeast,
    North Central, Northwest, Southwest and South Central
    regions.  The Company is currently in the second year of
    implementing PLAN 2000.  At the end of Fiscal 1997, the
    Company operated 51 retail stores under the trade name
    POWERFUL STUFF, this marking the conclusion of the first
    year of PLAN 2000.  With its Corporate Office now
    established in Toronto and its North American Operations
    Office in Sarasota, the Company expects approximately 85% of
    its POWERFUL STUFF stores to be in the US. As of 18 July 1997,
    the Company has 36 

<PAGE>

                                                                        Page 4


    locations open in the US and 19 in Canada, totaling 55.  The stores, 
    operating from leased premises ranging from 150 to 700 square feet
    and averaging 300 square feet, are located in major enclosed shopping
    malls in the US and Canada. 

    The Company's Reorganization Plan incorporates a related $49.1 million
    Financing Plan over the first 3 years of PLAN 2000, providing the 
    framework for the capital projected to be required to rapidly increase
    the number of POWERFUL STUFF stores to the level of critical mass 
    necessary to expeditiously achieve economies of scale and operating
    efficiencies.  During the first year of PLAN 2000, the Company received
    $15.4 million in proceeds from the Financing Plan. (See ITEM 7 -- 
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
    OF OPERATIONS for a discussion of the Financing Plan and ITEM 7 - 
    Section C (4) SUMMARY OF CHANGES TO SHARES AND SHARE CAPITAL.) Long-term 
    debt and new equity capital are the sources of funding for both future
    growth and the operating losses incurred during this expansion stage.
    While the Company has made and will make every effort to raise the capital
    provided for under the Financing Plan, differences in timing and the 
    amounts of proceeds actually received will impact the pace of the future
    rollout, and no assurances can be given the financing will be completed 
    as planned. Management, projecting that the Company must expand to the
    125 store level before it will attain profitable operations, anticipates 
    reaching critical mass by the end of calendar 1997 based upon the funding
    being received as planned.

    POWERFUL STUFF'S Canadian division launched in July 1996 in the Northeast 
    Region with its first store in Toronto.  Since then, 18 new locations have
    been opened in Ontario and a number of additional locations are currently
    under negotiation.  This division's immediate expansion thrust is expected
    to be concentrated primarily in Ontario.  Several store locations in 
    British Columbia and Alberta, in the Northwest Region, are under 
    consideration for 1997's expansion.  Business options for further expansion
    into other provinces will be considered once the business has been firmly
    established in the initial targeted markets. (See ITEM 1 - Section C 
    LOCATION, DESIGN AND CONSTRUCTION OF STORES, below, for more information 
    of the approach to store rollout and definition of the Regions.)

    POWER PLUS USA, INC. also launched in July 1996 commencing in the Northeast
    Region (Pittsburgh - a total of four locations by year end), and following 
    in the Southeast Region (Florida, Georgia, Mississippi, North Carolina and
    Tennessee).  The Southeast expansion is a blend of new POWERFUL STUFF 
    stores being opened, combined with 13 retail locations acquired in Florida 
    in September.

    Effective 1 September 1996, Power Plus launched its wireless airtime 
    rebilling business -- its  POWERFUL CONNECTIONS division -- with the 
    purchase of over 20,000 existing pager customers under contract and the 
    entitlement to the related future wireless (pager/beeper airtime) rebilling 
    revenue, plus the 13 above-referenced Florida retail locations. These were 
    purchased from CONSUMER ELECTRONICS SPECIALTY STORES, INC. ("CESS"), 
    located in Sarasota, Florida (see ITEM 7(B) - MANAGEMENT'S DISCUSSION AND 
    ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, The Southeast
    Region).  POWERFUL STUFF, in implementing PLAN 2000, expects to become 
    significant in the retail sales of pager and other wireless hardware, 
    accessories and related services, by firmly establishing POWERFUL 
    CONNECTIONS as a reseller business in both the US and Canada.

<PAGE>

                                                                        Page 5

3.  BACKGROUND AND HISTORY
    Power Plus Corporation was incorporated under the BUSINESS CORPORATIONS 
    ACT, ALBERTA, Canada, on 15 December 1986 under the name "Caio Capital 
    Company."  However, prior to the 1 May 1988 acquisition of all of the 
    issued and outstanding shares of Battery One-Stop International Inc., a 
    company incorporated under the BUSINESS CORPORATIONS ACT, CANADA on 6 
    March 1985 ("BOSI"), the Company had not conducted any significant 
    operations.  In connection with its acquisition of BOSI, the Company 
    changed its name to "Battery One-Stop Inc." and continued to develop the
    specialty retail business, begun by BOSI, of marketing and selling 
    batteries and certain battery-powered products in Canada and the United 
    States.  On 8 November 1994 the Company changed its name to Battery One, 
    Inc. 

    In November 1992, the Company formed two new US wholly-owned 
    subsidiaries, First Olympia Holdings Inc., a US limited liability company
    which has been inactive in the business since incorporation and Batteries
    Etc., Inc. ("Etc."). Effective 25 November 1992, Etc. purchased from 
    One-Stop Battery, Inc., an unrelated privately-held company, certain of 
    its assets including inventory, kiosks, fixtures and related equipment 
    and office furnishings through these subsidiaries.  The acquisition 
    included 40 operating locations in the United States and the leases 
    therefor. 

    The Company's former business was primarily the retail sales of 
    over 400 types of dry cell batteries, including common and specialized 
    cells, plus battery-powered and battery-related products through 
    Company-owned stores. The Company's products were sold principally from 
    kiosks or inline stores situated in high traffic areas of major shopping 
    centers and transportation hubs.  During most of Fiscal 1996, the Company 
    operated 18 retail locations in Canada and 33 locations in the United 
    States. 

    By the last quarter of Fiscal 1996 (the year ended 31 January 1996), it 
    had become apparent to then management that on the basis of the Company's
    share capitalization, and considering the continued non-profitability of
    Etc. which formerly operated the business in the US, notwithstanding
    its best efforts, the Company was not able to complete the financing of 
    its turnaround program on the basis contemplated. The poor performance of
    Etc. resulted from a number of unproductive stores situated in secondary
    locations committed to by prior management.  In fact, during this period
    Etc.'s cash flow was subsidized by BOSI which formerly operated the 
    business in Canada, to BOSI's serious detriment. (Etc. and BOSI are 
    referred to collectively as the "Former Subsidiaries".)

    In December 1995, BOSI made a voluntary assignment into bankruptcy pursuant
    to the CANADIAN BANKRUPTCY AND INSOLVENCY ACT. In December 1995, Etc. made
    a voluntary petition seeking protection under Chapter 11 of the US 
    BANKRUPTCY CODE, which in January 1996 was then converted to a Chapter 7 
    filing. The Company is the largest creditor of the Former Subsidiaries 
    but does not expect to receive any recovery of substance upon the winding 
    up of these bankruptcies expected during Fiscal 1998.  (See ITEM 7 --
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS.)

    All of the Company's then operations were conducted through the Former 
    Subsidiaries and all of its capital assets were owned by the Former 
    Subsidiaries.  Accordingly, at 31 January 1996 the Company had no ongoing
    retail operations.

<PAGE>

                                                                        Page 6


    Power Plus Corporation, however, as the parent company, maintained 
    continuous operations and remained in good standing.  The Company continued
    its ongoing statutory reporting requirements, making all the required 
    disclosures to shareholders, raising new capital for the purpose of 
    restructuring and reorganizing its operations, and trimming its overhead, 
    leaving a committed executive management team dedicated to turning the 
    business around.

B.  PRINCIPAL PRODUCTS AND SERVICES

1.  THE WIRELESS COMMUNICATIONS -- PAGERS, CELLULAR TELEPHONES AND 
    AIRTIME REBILLING
    While the reseller distribution channel is an established concept in the US,
    it is a new concept for Canada.  The distribution chain for paging and 
    cellular services starts with the carriers or airtime providers that own 
    regional and national networks. Telephone companies control some airtime
    providers and often partner with the leading independents to offer expanded
    coverage and service.  Most paging carriers have large direct sales forces
    selling primarily to businesses, but they rely on indirect retail channels 
    and resellers for small business and consumer sales.

    A reseller buys wireless services from carriers at discounts and then 
    packages these services, sells and bills them to its own customers, collects
    the payments and provides customer service.  To the customers, the RESELLER
    IS the paging or cellular company.  Resellers aim to create long-term 
    customer relationships.

    For paging services, the monthly service bill is usually fixed, and priced
    competitively to the local market (which is usually defined by technology,
    by the radio frequency of the pager).  With up-front and properly timed 
    payment schedules for pagers customers, there is limited risk for carrying
    receivables for the reseller.

    Cellular airtime reselling is similar to that of paging reselling although 
    there is a major difference because it is both rate and usage (including 
    particular time of usage) sensitive.  As each person uses a phone 
    differently, the monthly per customer revenue is variable, ranging from 4 to
    10 TIMES more than that of a pager customer.  So, in addition to the cost of
    funding marketing and sales efforts, the cellular airtime reseller must 
    be able to finance, manage and collect receivables.  Satisfied cellular
    customers typically remain active with a carrier for 5 years or more.

    A reseller that is also a retailer has the advantage of being able to 
    combine equipment sales with service sales to maximize company margins 
    where the retail margin on the equipment alone is limited.  Providing easy
    access to high quality service at low rates is critical to switching
    customers from other carriers and then keeping them.

    i.  BEEPERS / PAGERS

        a.)  Equipment
             The beeper department is a new merchandise category in
             POWERFUL STUFF stores.  Depending on the store location, the
             sale of pagers, accessories and the attendant service
             packages, is expected to account for between 30% to 80% of
             stores sales.  Merchandise margin on equipment is highly
             competitive and something of a loss-leader, whereas the
             margins made on activation fees and recurring paging service
             and renewals are higher.  High margin fashion 

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                                                                        Page 7


             sensitive paging accessories are included with most purchases,
             then continually purchased, to modify and personalize a pager.

             Pagers are typically sold near cost.  (Selling, giving away
             or leasing pagers at cost, in extreme situations, can be a
             requirement for selling the service.  This marketing ploy is
             analogous to giving away razors in order to sell blades.)
             While numeric pagers are the most affordable for the younger
             market, it is planned that stores will carry a broad range
             of pagers, including some with advanced features such as
             alpha-numeric message, 2-way message and voice mail.

             POWERFUL STUFF stores will maintain a breadth and depth of
             pager and accessories inventories in each store.  It is
             planned that all the brightly colored beepers, airbrushed
             cases and accessories catch the shopper's eye and draw
             customers to the store.  Sales representatives are trained
             to make minor service repairs and accessory customization at
             the store.

        b.)  Market Overview
             From various sources researched by management, it appears
             that the paging industry in the US has grown from less than
             2 million subscribers in 1981 to more than 34 million by the
             end of 1995.  At the end of 1995, the top 22 paging
             providers in the US were servicing roughly 25 million
             subscribers. Penetration in the US is currently approaching
             15% and, for comparison, in Hong Kong about 20%.

             The less developed paging market in Canada is believed to
             proffer even more room for growth.  The 1.2 million paging
             customers in Canada (3.5% market penetration) is expected to
             double in the next 5 years according to industry analysis.
             US companies building networks with Canadian partners will
             accelerate this growth and introduce aggressive marketing.

             Lower prices for equipment and paging service has shifted
             the growth in paging from the business sector to the
             consumer marketplace. The average monthly service fees for
             the leading paging providers has dropped from a range of
             US$10 to US$15 in 1994 to the US$7 to US$10 range in 1996,
             and according to Motorola, consumer demand increased
             dramatically.

             Power Plus' target customer market for pagers is the under
             30 year olds -- particularly the 15 to 25 year old group --
             for the following reasons:

             -   The segment is under-served, retailers having concentrated
                 efforts on business customers.

             -   Young people are in the malls.

             -   This segment represents an exploding market in paging.

             -   It is the targeted media group for fashion electronics.

             -   Enhances the value of the Company's retail distribution chain.

             This market buys pagers in every conceivable color or custom
             design as a fashion statement and status symbol, as well as
             to be in touch with peers and sometimes even their parents.
             For the 15 to 25 year olds, pagers are a status symbol and,
             for many, provides them with the independence of their own
             private phone number.

             As the consumer demand increased, there has been a shift in
             distribution channels from direct (business to business)
             sales by carriers to sales by retail 

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                                                                        Page 8


             stores.  This marketing shift is responsive to the retail 
             customer becoming a target market, versus commercial accounts.
             Today, about 71% of pager customers prefer a retail store to 
             make their purchase as opposed to directly from the carrier.

             The Company's research also indicates that paging customers
             are among the best prospects to buy cell phones.

  ii.   CELLULAR

        a.)  Equipment
             Cellular telephones provide a product migration for pager
             customers.  While cellular equipment margins are expected to
             be small, as with pager equipment, it is the activation and
             service contracts, renewals, repairs and accessories that
             yield substantial dollar volume and margin.  Power Plus will
             focus evolving this category as an agent and reseller for
             cellular carriers.

             An agent earns a fee paid by the carrier for its marketing
             and sales efforts that culminate in a cellular contract with
             a customer.  However, the agent is often required to provide
             the customer with a FREE or highly subsidized cellular
             phone.  POWERFUL STUFF, in the future, intends to offer the
             consumer a choice of the carrier's plan with phone included,
             or a resellers plan with lower per minute charges.  The
             latter will be priced to attract more customers and create a
             reasonable return while eliminating subscriber churn.

             Conversely, selling cellular telephones to new customers
             requires carrying high cost merchandise inventory and this
             can be costly in both real dollar terms and in opportunity
             cost when valuing the limited retail shelf space in a kiosk
             which is normally dedicated to faster-turning merchandise.

             Power Plus will attempt to make special merchandise
             distribution arrangements with selected phone manufacturers.
             Possibilities should increase for these relationships as 
             manufacturers see the scope of the distribution channel
             being created. POWERFUL STUFF intends to test new ways of
             selling cellular services, acquiring customers and building
             a significant profit center.

        b.)  Market Overview
             Research indicates that the wireless telecommunications
             market in North America has reached mass-market proportions.
             In 1995, 9.6 million customers signed up for cellular
             service, a record in the US.  According to CTIA's industry
             survey in the US, wireless phone customers number 33.8
             million at the end of 1995 -- a 40% increase.  Total sales
             in the US topped $19 billion, a 34% annual increase that is
             projected to continue.

             The number of new cell sites in the US, the building blocks
             of a wireless system, increased 26% to a total of 22,663 in
             1995.  This excludes the build-out of the new PCS network.
             New cells increase capacity, improve voice quality and
             reduce power (broadcasting) needs.  With the industry's
             growth and expansion into the consumer marketplace, the
             average monthly customer bill dropped to $51 in 1995 from an
             average of almost $100 in 1987.

             Research indicates that a typical cellular telecommunications
             customer is a male over age 30.  The industry has significantly
             penetrated the business market, particularly professionals, 
             executives, and outside sales and 

<PAGE>
                                                                        Page 9


             management people.  Penetration of the consumer marketplace is
             accelerating as networks expand, as competitors enter the market
             and as new products are developed.  The transformation from an 
             analog to a digital service will also open new product 
             opportunities. 

             Many current subscribers own their cell phones and
             have passed the initial contract expiry dates locking them into
             specific carriers.  Currently the industry entices these
             customers to switch to alternative carriers with new
             promotion offers.  Another reason that customers will shop
             around results from technological innovation that, in fact,
             has reduced the carrier's capital investment.  Over the next
             few years many consumers who are paying 50CENTS to 60CENTS
             per prime time minute will be converting to lower group
             rates -- the CONVERSION MARKET.  Switching a customer's
             cellular phone from one cellular service to another is a
             relatively simple task which can be done at the sales
             counter of any store by knowledgeable sales representatives.

             Selling an alternative carrier's airtime package to an
             existing cellular customer whose contract recently expired
             with a different carrier -- SWITCHING SERVICES -- is a new
             opportunity that requires little investment in inventory by
             the agent since customers will already own their phone.  The
             Company believes there is a large number of cellular
             customers who now own their own phones with service
             commitments expiring shortly.

             New limited calling products are beginning to appear in the
             marketplace which will make cell phones more accessible to
             young people, the Company's target market for pagers.  The
             fact that pager customers often become cellular customers
             means that Power Plus is well positioned to capture some
             portion of this burgeoning new market.  To service both this
             and the CONVERSION MARKET, POWERFUL STUFF intends to build a
             distribution channel to service these customers in a
             convenient mall location.

2.   PORTABLE ELECTRONICS
     Consumers love to see and try leading-edge products and live
     the fashion statement they make -- the latest in hand-held
     electronics, communications, entertainment, business and
     lifestyle products to be featured at POWERFUL STUFF stores.
     These products range from low-priced impulse items to more
     expensive products that must be explained or demonstrated
     and include: calculators, translators, data and voice
     recorders and organizers, PDAs (personal digital
     assistants), pointers and palm-top computers; as well as
     audio/video products, radios, Walkmans, CD players,
     miniature TVs, remote controllers, flashlights and hand-held
     games for young people and adults.

3.   BATTERY ACCESSORIES
     All pagers, cellular phones and portable electronic products
     require the batteries needed to power them (sometimes common
     cells and oftentimes specialty batteries), which will be
     made available at POWERFUL STUFF stores. Annual battery
     sales in the US exceed $9 billion representing an annual
     consumption of over 7 billion batteries.  Growth has been
     about 12% per year and is expected to continue. At least 90%
     of all households maintain and use one or more battery-
     powered product.

<PAGE>
                                                                        Page 10

4.   MERCHANDISE AND SERVICE
     It is important to note that the merchandise and service mix
     for a store -- or cluster of stores -- can be sensitive to
     unique regional market conditions.  Within the key
     merchandise categories, it is planned that each store will
     offer innovative products (new items), opportunity items
     (special prices) and continuity products and services
     (repeat purchases and recurring sales).  To keep merchandise
     fresh and exciting, it is planned that all stores will have
     new, just-in items and this week's specials. While wireless 
     communications and related services are a key factor in the 
     new business thrust envisioned by the Company, merchandising 
     flexibility enables POWERFUL STUFF to adapt to a specific 
     location and regional market.  In locations where paging and
     cellular cannot play the dominant merchandise role, batteries
     and battery-related products will be emphasized to a greater 
     degree in order to maintain acceptable sales levels.  For 
     instance, at the AirMall in the Pittsburgh International 
     Airport where shoppers include many business travelers and at
     Florida Mall in Orlando where many shoppers are tourists, 
     portable electronic products plus batteries will be the emphasis.

5.   SOURCES AND AVAILABILITY OF PRODUCTS
     To meet its anticipated merchandise and inventory
     requirements, the Company will attempt to forge strategic
     vendor-partner relationships with key suppliers.  Such
     partnerships should recognize the importance of both parties
     to each other's plans and success. These vendor-partnerships
     do not normally occur at start up unless the supplier is
     actually an equity or contracted partner in the business.
     As a new entrant, it is expected that POWERFUL STUFF must
     demonstrate its potential and its ability to achieve its
     vision in order to include suppliers in the vision.

     In the short-term, most brand name products are available
     from distributors, if not on a direct basis. In some cases,
     vendors prefer to support their distributors and will sell
     exclusively through distributors until the retailer reaches
     substantial volume commitments.

     POWERFUL STUFF plans to sell brand name merchandise to the
     extent possible.  However, this does not always mean the
     NUMBER ONE brand.  Vendors of the NUMBER TWO brand might be
     more receptive and flexible than brand leaders.  It is also
     common practice in the industry that as a retail chains
     grows merchandise suppliers (whether agents or direct)
     become eager to ensure that the important chains have access
     to new product and ample supply of normal merchandise.

     Consequently, the Company is not dependent upon a single or
     limited source of supply for the vast majority of its
     merchandise or services.  Moreover, many manufacturers make
     the same products in different countries.  Hence, if one
     supplier is short of product, another supplier can be called
     upon to fill the Company's needs.  The Company believes that
     an adequate supply of all types of merchandise, batteries
     and battery-powered products is available.

6.   MARKETING OF PRODUCTS
     While most retailers in the mall draw from traffic in the
     mall, POWERFUL STUFF has developed a business model which
     the Company believes, in certain circumstances, actually
     draws customers to the mall.  The POWERFUL STUFF business
     system plans to 

<PAGE>
                                                                        Page 11


     utilize targeted media advertising, primarily radio to paging 
     and cellular subscribers, at the stores as well as to position 
     and create an image for the business.

     Acquiring new customers, rather than just selling
     merchandise, is a key part of the POWERFUL STUFF business
     model and operating plan.  By design, a significant portion
     of POWERFUl STUFF'S advertising will be measurable, direct-
     response advertising rather than general retail support
     advertising.  POWERFUL STUFF plans to advertise to capture
     new paging customers. Advertising, will be measured to
     determine incremental benefit and cost per new customer.
     Advertising, in combination with the LOOK AND FEEL of the
     stores and an effective sales staff, will attempt to
     establish POWERFUL STUFF'S image to its core market.

     The media-market approach to clustering the stores enhances
     the effectiveness, efficiency and economy of advertising.
     The Company believes that radio advertising, itself both
     highly MARKET- and AUDIENCE-SPECIFIC by nature, will raise
     the target customers' awareness and image of POWERFUL
     STUFF'S stores.  Accordingly, the potential to use radio
     advertising is a criteria in selecting new store locations.

     In addition to broadcast media advertising to acquire new
     customers at the store, direct customer promotions may be
     employed by including promotional offers in the invoices
     mailed for paging and cellular rebilling airtime and related
     services.  As each store can capture customer and
     transaction data, it can also create a database for targeted
     promotions and follow-on direct marketing.  In retail,
     customer lists are an important asset.

     Finally, because of the particular locations of the kiosks,
     the Company believes that marketing its merchandise and
     services enjoy a competitive advantage compared to other
     retail and chain stores.  The merchandise is displayed
     prominently in its stores, which are located primarily in
     shopping malls.

C.   LOCATION, DESIGN AND CONSTRUCTION OF STORES

The selection of the best locations and the appearance is
vital for long-term profitability.  High volume shopping
malls are key to POWERFUL STUFF'S growth strategy.  Over
1000 specific mall locations have been identified in the US
and Canada that meet Power Plus' criteria.  The rollout plan
focuses on the top 20 developers who, between them, manage
an aggregate of over 900 shopping malls.  The Company's PLAN
2000 targets opening 1000 stores over a 5 year period.

POWERFUL STUFF stores are either 150 square foot kiosks or
small inline stores of 300 to 700 square feet.  The kiosk
and small store model has proven successful for a number of
companies, for example Sunglass Hut.  One of  Power Plus'
primary real estate strategies is to pattern itself after
the Sunglass Hut model, including acquiring locations near
proven Sunglass Hut stores.

The Company's rollout plan foresees clustering POWERFUL
STUFF stores in regional markets, opening a minimum of 5
stores in a district but each district must have the
capacity to add at least 10 more stores over the next 3
years to be viable economically.  A District Manager can
then be responsible for the operations and performance of
between 15 and 20 stores.  







<PAGE>
   
                                                                       Page 12
             
Clustering stores within media areas creates an economically viable opportunity
to advertise effectively and efficiently.

In order to meet the demands anticipated by the rapid pace of the rollout 
program, the Company has developed a modularized attack to the build out 
program that is particularly adapted when employed in a clustering approach.

1.   CLUSTERING FOR RAPID, MANAGED GROWTH

     A Region at maturity may contain up to 8 districts of 15 to 20 
     stores extending from a metropolitan area, which has as its nucleus 
     6 to 8 stores within the radius of the city. The rest of the stores 
     are selected in suburban or smaller cities within close proximity 
     to the metro area.  This allows POWERFUL STUFF to reach an economic 
     critical mass in a cluster rapidly, as opposed to spreading 
     resources to isolated locations across the continent.

     At the maturity of Plan 2000, POWERFUL STUFF expects to be 
     positioned throughout the 7 geographic Regions listed below, each 
     typically comprised of approximately 8 Districts which themselves each 
     comprise between 15 and 20 stores on average, making the typical Region 
     in the 160 store range.

          -   Northeast Region
          -   Mid-Atlantic Region
          -   Southeast Region
          -   North Central Region
          -   South Central Region
          -   Northwest Region
          -   Southeast Region

     Clustering also enables POWERFUL STUFF to maximize marketing dollars, 
     control turnover, minimize training and recruiting costs, and reduce 
     financial risks because of more frequent supervision by District 
     Managers.

2.   TARGET LOCATIONS

     The dominant form of retail space in North America is the suburban 
     shopping center which is identified by the following characteristics.
     
     i.   Shopping centers are typically defined by their dominant anchor 
          tenants and their gross leasible area ("GLA"), and to some extent by
          population or trade area that they serve.

     ii.  Shopping malls are rated according to customer traffic and annual 
          sales per square foot standard measurements.  Shopping malls under 
          consideration should have annual sales in the range of $300 to $500
          per square foot.  Other measures are the upscale versus mass market 
          characteristics, the ethnic demographics of the customers and the 
          experience of other retailers in the mall.  A key consideration for 
          targeting cities will be to identify areas where the wireless 
          communications market is under-served, presenting an opportunity for 
          POWERFUL CONNECTIONS to be a dominant provider.

<PAGE>

                                                                       Page 13

     Seven types of shopping centers exist:  super regional mall, regional 
     mall, airport, downtown retail, off-price, transportation and festival 
     locations.  The majority of POWERFUL STUFF stores will be in the first 
     two categories with a few opportunistic stores in other types of 
     locations.

3.   SITE CHARACTERISTICS

     i.   Population       200,000 people in a primary trading area of a 
                           town ranging from a three to five mile radius

     ii.  Mall Site        500,000 square feet GLA with two fashion anchors

    iii. Location in Mall  Main mall with adjacencies to record stores and 
                           teen fashion apparel tenants.

4.   NEAR-TERM LOCATIONS

     Power Plus opened 51 retail stores by the end of 1996, against a target 
     of 40, and plans to open about 75 during 1997 and about 300 for each of 
     the next three years, subject to the timing and amounts of capital 
     injections.  The focus is on opening clusters, not just opening stores. 
     The Company will aggressively pursue opportunities to expand in cities 
     where POWERFUL STUFF can offer pager and cellular telephone service as a 
     reseller in addition to portable electronics.

     Currently being targeted for the rollout thrust are the Northeast, 
     Mid-Atlantic, Southeast and Northwest Regions.

5.   TOP 20 DEVELOPERS

     As noted earlier, PLAN 2000 envisions a 1000 store rollout plan.  Power 
     Plus has identified that the Company's criteria will play into the top 
     20 developers, such as Rousse, Simon/DeBartolo and Urban Retail Group, 
     portfolios of mall properties in a complimentary fashion.  Most of the 
     developers have properties that are regionalized in certain geographic 
     areas throughout North America, a factor which may also make it easier 
     for Power Plus to cluster locations. 

     The Company anticipates that over time, developer relationships 
     established in one market will benefit others.  This advantage can 
     create a snowball effect, and may assist the Company in attaining a 
     significant number of locations in a short duration.

     Power Plus plans to focus on the top 20 developers list since they have 
     many of the best centers.  Between them, these developers could account 
     for 90% of Power Plus's location requirements.

<PAGE>

                                                                    Page 14

6.   DESIGN

     In partnership with award-winning architectural retail designer Michel 
     Dubuc Concept, Power Plus has created a store which has put a bold new 
     twist on the traditional electronics niche, and in so doing has set its 
     sights on changing the face of this specialty niche retail marketplace. 
     Michel Dubuc, the founder of Michel Dubuc Concept, has agreed to stand 
     for election to Power Plus' Board of Directors (see ITEM 10 - A(2) for 
     further background on Michel Dubuc Concept and detail of Mr. Dubuc's 
     pending appointment.) POWERFUL STUFF stores combine design elements 
     which have mass appeal across age, gender and ethnic boundaries, 
     addressing today's retailers needs to ensure market longevity and 
     flexibility. From the elliptical lines encircling the brand name and the 
     bold lifestyle posters, to the graphic computer circuit boards on the 
     walls, this futuristic. hi-tech design, with it's rich colors and 
     textures has redefined what it means to sell electronic products.

     By bringing a fashion dimension to the store design, POWERFUL STUFF has 
     created a few portable electronic lifestyle niche in the marketplace. 
     This is a store that doesn't just grab the attention of today's 
     consumers, but one that genuinely appeals to their emotions, senses and 
     mind.

     POWERFUL STUFF stores are not only dramatic, but are fun places to go. 
     Unlike some novelty stores, the design doesn't engulf the product, but 
     brings it to life. All of the palm-top products are presented in 3 easy 
     to shop lifestyle concepts within the store: FUN TECH - presented on the 
     whimsical hi-tech computer graphic wall; COMMUNICATIONS TECH - 
     presented against a colorful street map illustrating the prominence of 
     communications in our lives; and BUSINESS TECH - presented in sleek, 
     energetic and futuristic cases for the discerning and hurried business 
     customer.

     POWERFUL STUFF stores grasp the basic premise of retail mass appeal by 
     creating a compelling design that humanizes technology, thereby 
     connecting with consumers again and again because we understand their 
     purchase will have more memorable appeal, and will take on more 
     significance when it is purchased at a POWERFUL STUFF store.

     The standard kiosk is 150 square feet, rectangular in shape with mitered 
     corners. Every inch of space is maximized to emphasize merchandise 
     under the Company's banner and colors.

     With the exception of hands-on merchandise, the 360 degrees of product 
     display is either under glass or out of normal reach of customers, thus 
     limiting the potential of shrinkage while still keeping product close to 
     the customer. Merchandise displayed on the center island may be hung on 
     slot-boards or similar displays. The hands-on merchandise is secured to 
     the counter but easily removable and stored in one of the lockable 
     drawers for night security.

     Inline stores, typically in the 300 to 700 square feet range, are designed 
     specifically to match the space, provide comfortable selling area and 
     attract customer traffic in the mall.

     The capital investment, excluding inventory, per location ranges from 
     $28,000 to $115,000.

<PAGE>
                                                                     Page 15
     
7.   CONSTRUCTION

     With all materials on site it takes 2 days to manufacture a kiosk.  The 
     modular design facilitates shipping to its destination.  The 
     mechano-approach installation enables the Company to retain local 
     contractors to install the kiosk in the malls, which usually takes less 
     than 8 hours -- a cost saving compared to shipping the installation team 
     with the kiosk.  In this way, it will be possible for one local 
     contractor to install all the kiosks in a large but local geographic 
     area, as required.  By using the same contractor, in addition to the 
     efficiency gains, the Company is building a base of resources that can 
     also be called upon to perform usual maintenance or repairs in the future.

     Display cases are constructed of predominantly plastic laminate and 
     either tempered or laminate safety glass.  The glass shelving inside 
     each case (glass so that the maximum amount of merchandise may be viewed 
     by customers) can be adjusted for height or removed to enable special 
     merchandise display units. Indeed, with the modular approach 
     incorporated in the new store design, any display case can be removed 
     and replaced with a special-purpose case.
     
     The size of the case goods means that the Company can place orders for 
     multiple units at one time -- even build a small inventory of them -- 
     thus obtaining volume price concessions. By limiting variations, 
     adopting a modular approach and specifying building and material 
     standards, it is possible for the Company to tender for the supply of 
     its casegoods. There are more than 500 casegoods manufacturers in North 
     America and it will be possible for the Company to select suitable ones 
     proximate to the specific areas the Company plans to roll into next, 
     thereby saving shipping costs.

     Power Plus has developed a modular approach to remodeling inline 
     locations for POWERFUL STUFF stores.  The same size and style for 
     casegoods as used in kiosks are also employed to fixture the store.  
     Since installation crews are handling the same casegoods, the cost of 
     installation benefit from the mechano-approach and the Company is able 
     to employ consistently its standard colors and appearance.

     The importance of a well-run construction department is easily 
     understood in the context of the demands of meeting the rigorous pace 
     of the rollout. The Company prefers to use local contractors to install 
     kiosks or build inlines, in order to control construction costs (cost of 
     roving installation team versus local contractors) and have them 
     nearby for future routine repair and maintenance.  As well, often local 
     contractors can obtain permits and approvals, if only because they know 
     the local rules and processes better.

     General contractors are selected via a bidding process (against 
     architectural drawings supplied by the Company) and once selected will 
     report to one of the Company's Store Construction Project Managers. The 
     bidding process requires, among other matters, that the general 
     contractor demonstrate it has suitable insurance coverage.

<PAGE>
                                                                    Page 16


D.   EMPLOYEES

As of 18 July 1997 the Company employs: 1 Regional Manager, 7 District 
Managers, 54 Store Managers, 82 Full time associates, 64 Part time associates 
and 71 Administrative, Customer Service, Distribution and Warehouse personnel 
-- a total in all of 288 employees including senior officers and executive 
management.

POWERFUL STUFF stores are opened and managed regionally. POWERFUL STUFF will 
attract talent from all areas of the wireless communications and retail 
industries.  By implementing a planned growth through a geographic clustering 
approach, and the creation of a responsive supervisory and training plan, the 
Company is fast approaching self-sufficiency.

However, the Company's PROMOTE FROM WITHIN PHILOSOPHY will be periodically 
supplemented by outside hires for the purpose of keeping its perspective 
fresh and ideas innovative.

1.   ECONOMIC GROWTH MODEL - GEOGRAPHIC CLUSTERING

     POWERFUL STUFF is deploying the rapid growth model used similarly by 
     some of the industry's most successful retail companies - GEOGRAPHIC 
     CLUSTERING.

     Geographic clustering is managed growth by establishing and 
     penetrating specific geographic markets with multiple stores, usually a 
     minimum of 5 in the first year of opening any new district. This 
     approach assures operational overhead efficiencies, brand identity and 
     rapid market dominance. Clustering also creates a productive stable and 
     well-trained sales and management team, from which Power Plus can pull 
     resources to transplant and seed the next cluster.

2.   FIELD SUPERVISORY STRUCTURE

     The clustering approach is being implemented to create a streamlined and 
     efficient field supervisory infrastructure, assuring each store is 
     operating to its maximum potential.

     i.   REGIONAL MANAGER

          A Regional Manager will supervise approximately 8 District
          Managers who will oversee 15 to 20 Store Managers within
          their districts, or up to 160 stores in total.  Each
          region functions as its own OPERATING UNIT to promote
          bottom-line accountability and to focus on the specific
          product assortment needed to capture its unique market
          niche.  At the maturity of PLAN 2000, POWERFUL STUFF expects
          to have 7 Regional Managers overseeing the 7 Regions, each
          typically comprising approximately 8 districts of 15 to 20
          stores.

    ii.   DISTRICT MANAGER

          A District Manager is the PROFIT CENTER MANAGER overseeing
          the profitability of each district by assuring: sales
          growth, recruiting personnel, opening new stores, training,
          customer service, fine-tuning merchandise assortment
          tailored to the local market, and operating profit.
          District Managers will supervise 15 to 20 stores.
     
   iii.   MANAGER TRAINER

          Each district will have one to two senior store managers called 
          Manager Trainers.  Manager Trainers are the most senior and 
          experienced store managers who are placed in higher volume stores, 
          generally centralized within the district.  Store 
     

<PAGE>
                                                                 Page 17




          Managers must become Manager Trainers
          before becoming eligible for promotion to a District
          Manager.  A Manager Trainer serves multiple purposes --
          preparing and overseeing the training of new store managers,
          communicating with and motivating the store teams within
          their market area, and recruiting new sales associates.
     
          The Manager Trainer is the key mentor to the seeding of new
          clusters with quality, well-trained personnel.

     iv.  STORE MANAGER

          POWERFUL STUFF Store Managers are incentivised for and have as their
          primary focus 3 main responsibilities:

          a.)  Producing sales

               Because stores, at an average of 300 sq. ft., are 
               operationally easy to manage, and because a high percentage of 
               store sales are produced by the Manager, POWERFUL STUFF Store 
               Managers are incentivised for their personal sales as well as 
               their store sales productivity -- training and motivating --
               of their sales team.

          b.)  Controlling non-fixed expenses

               Store Managers will be held accountable for controlling 
               non-fixed expenses including labor costs, shrinkage due to 
               cash and merchandise losses, and supplies and material costs.
     
          c.)  Maintaining a visually appealing and properly merchandised store

               Store Managers will be held accountable for the 
               professionalism of their staff and for ensuring each store is 
               clean and maintained to corporate visual merchandising 
               standards, and that the product mix is appropriate for the 
               need of the local market for that store.

3.   STORE STAFFING AND COMPENSATION

     The total projected selling and non-selling hours for store labor at a 
     retail mall location is 110 hours per week, a standard 120 hours 
     annualized over a year, taking into account 4th quarter seasonality.  
     This is the equivalent of 2 full-time and 1 to 2 part-time people per 
     store except in peak seasons.  POWERFUL STUFF, through its years of 
     rapid growth, will emphasize full-time employees to the extent possible, 
     in order to maximize staff coverage in metro areas and to feed 
     new-location growth with well-trained associates.

     POWERFUL STUFF employs a PAY FOR PERFORMANCE compensation plan which 
     maximizes sales productivity through personal and team incentives.  
     Store associates will receive an hourly rate and percentage of sales 
     based on specific categories of merchandise which will promote sales 
     without eroding margins.  Contributions from merchandise and service 
     vendor partners will allow POWERFUL STUFF to maximize sales productivity 
     in promotional periods through special contests and spiffs.
     
     Store Managers will also participate in a monthly incentive program on 
     overall store sales based on hitting a budgeted sales target, and 
     will be able to earn an annual bonus by maximizing store sales 
     performance and controlling expenses. Opportunities to increase 
     compensation will be earned by increasing store sales and through 
     promotions to higher-volume stores.

<PAGE>
                                                                Page 18

     
4.   TRAINING AND DEVELOPMENT

     POWERFUL STUFF will be relying heavily on POWERFUL UNIVERSITY which will 
     be deployed as its 6 month, 3 segment training and development program.  
     Consisting of a self-study workbook for each segment, there will be a 
     written training curriculum that must be completed by all full-time 
     associates before the individual earns the right to run their own 
     POWERFUL STUFF store.  Each segment must be reviewed and signed off by 
     the District and Regional Manager for that store.

     Each segment is divided into 4 main areas with a lesson each week.

          -  Sales and Customer Service
          -  Store Operations
          -  Product Knowledge
          -  Leadership and Management

     Associates will be tested both orally and in written format before 
     receiving their Graduation Certificate.

     POWER U is supplemented by a NEW HIRE ORIENTATION program and PART-TIME 
     PARTNER training program.  The Company believes training is most 
     effective when driven down to front-line levels of accountability, 
     therefore most training will be executed by District Managers and 
     Manager Trainers who will be assisted by Vendor Partners for 
     product-specific training.  POWERFUL STUFF will also schedule periodic 
     classroom and market training conducted by regional training 
     coordinators, for those areas that are more complex, required by law, or 
     critical to the well-being of the organization, such as performance 
     appraisals, sexual harassment and diversity training.

     POWERFUL STUFF currently communicates to Store Associates through a 
     Weekly Sales Bulletin featuring the top sales performances by the 
     district team, store team, and individual performances. This bulletin 
     also communicates new product information and other news from the Home 
     Office Team.

     POWERFUL STUFF will also utilize multi-media devices such as video for 
     training and communications to ensure consistency from store to store 
     and as a mechanism to drive the values and mission of the company to the 
     field associates.

E.   COMPETITION

The Company has not identified a major US competitor that, on a national 
scale, is positioning itself to be the dominant provider of paging products 
and services to the youth market.  The Company's strategy is to take a 
pre-emptive position to the extent possible.  In part, this will depend on 
its ability to target and open large numbers of stores quickly.  Competition 
must be evaluated on a market by market basis.  There maybe a number of 
markets where paging penetration and the number of resellers may be 
sufficiently high (New York City, Miami) such that POWERFUL STUFF will 
carefully consider whether or not to enter that market.

A potential competitor, Simply Wireless, being rolled out by Century Cellular 
Network, Inc. is a kiosk STORE-WITHIN-A-STORE concept for supermarkets, as 
opposed to shopping malls.  

<PAGE>
                                                                     Page 19


Simply Wireless has targeted expansion into 9 states and anticipates growing 
to 250 locations.

While not a kiosk-type store chain, Radio Shack is by far the largest 
competitor in key merchandise categories as the largest volume retailer of 
batteries and the largest seller of cellular phones in the US.  It is also a 
competitor in Canada where, in addition to their own stores, Radio Shack has 
a co-venture with Cantel, a leading Canadian cellular and cable company, to 
open over 100 small stores. Fortunately, for a large portion of POWERFUL 
STUFF'S target market, Radio Shack is not the image or store of choice.

In the overall market arena, the primary competition will be from large 
discount chains, price clubs, and electronic stores, including WalMart, 
Sam's, Circuit City and Future Shop, among others.  These companies drive 
down the prices and margins on many items.  In addition, there will be many 
local companies selling paging to businesses, installation of phones, radar 
detectors and alarms in cars, etc.

There may be significant competition for a limited amount of prime space in 
shopping malls.  Some malls limit the number of kiosks, often at the request 
of lead tenants.  When kiosk locations are not available, POWERFUL STUFF may 
utilize small inline stores.  Malls and retailers exploit the USE CLAUSE in 
leases to control competition in the mall.  In some locations POWERFUL STUFF 
may be restricted from offering some merchandise lines such as telephones, 
cellular, watches or cameras due to the existing USE CLAUSE of another tenant 
retailer.  In extreme situations, this might eliminate a location from 
consideration.

F.   TRADEMARKS

The Company presently holds two service marks registered on the Principal 
Register of the United States Patent and Trademark Office.  Registrations are 
for the mark BATTERY ONE-STOP and design BATTERY 1-STOP in connection with 
battery and battery-powered store services.  Both service marks cover the use 
of the name BATTERY ONE-STOP in connection with the sale or advertising of 
its services in the United States.

The Company also holds a Certificate of Registration from the Registrar of 
Trade Marks, Consumer and Corporate Affairs, Canada, covering the stylized 
use of the name BATTERY ONE-STOP in the operation of its business in Canada. 
In addition, the Company has registered the name BATTERY ONE-STOP in the 
United Kingdom.

The Company has applied for registration of other trade marks in Canada and 
the United States.  The trade marks for which applications have been made are 
POWERFUL STUFF, POWERFUL STUFF! design, POWERFUL CONNECTIONS and 
1-800-POWERED.  These applications are still pending.  The Company had 
previously filed applications, which are still pending, to register the 
service marks using the name BATTERY ONE in the United States and Canada.

<PAGE>
                                                                     Page 20

G.   GOVERNMENTAL REGULATION

Various national, state and local governments have adopted, and may in the 
future adopt, laws and regulations regulating contamination of the 
environment. These laws and regulations may impact the Company's disposal of 
spent batteries which contain toxic compounds and impose liabilities for 
pollution resulting from improper disposal.

The Company monitors the adoption of orders, rules, regulations and laws 
related to the Company's operations and advises all store managers and 
regional managers of any new requirement or change in the law by way of 
weekly mailings. The Company believes that all of its store managers are 
currently complying, and will continue to comply with, in all material 
respects with all orders, the rules, regulations and laws applicable to the 
Company's operations. To the Company's best knowledge, there have been no 
material violations of any such requirements.  The Company has not incurred 
significant costs in the past to comply with environmental regulations and 
does not anticipate incurring significant costs in the future.  However, the 
Company cannot predict the effect of any future changes in applicable 
regulations on its operations or capital expenditure requirements.

H.   CERTAIN GEOGRAPHIC INFORMATION

The Company's sales, operating losses and total assets in Canada and the US 
for Fiscal 1997, Fiscal 1996, the transition year ended 31 January 1995 are 
set forth below:

                          CANADA     UNITED STATES      TOTAL
                        ---------    ------------    -----------
                                        1997
                        -----------------------------------------
 Sales                    $503,429     $3,577,169     $4,080,598
 Net loss               $3,595,000     $2,092,427     $5,687,427
 Total assets           $7,422,843     $3,621,011    $11,043,854
                        -----------------------------------------

                                          1996
                        -----------------------------------------
 Sales                   $1,749,393     $3,625,836     $5,375,229
 Net loss                $1,076,324     $3,465,227     $4,541,551
 Total assets              $330,035         --           $330,035
                        -----------------------------------------

                                          1995
                        -----------------------------------------
 Sales                   $2,414,991     $6,132,982     $8,547,973
 Net loss                  $498,134       $991,282     $1,489,416
 Total assets            $1,505,984     $3,676,695     $5,182,679
                        -----------------------------------------
                        -----------------------------------------

<PAGE>
                                                                     Page 21


ITEM 2 --           PROPERTIES

The Company's Corporate Office is at 7850 Woodbine Avenue, Suite 201, 
Markham, Ontario, L3R 0B9.  Leased on a month-to-month basis, these offices 
are approximately 3,250 square feet, at a monthly occupancy cost of 
approximately $3,200. For the operations of Power Plus Canada, Inc., the 
Company has arranged leasing of office and warehousing space of approximately 
2,500 square feet strategically located proximate at 7780 Woodbine Avenue, 
Markham, Ontario, including store front and administration offices.  Leased 
on an annual basis, the monthly occupancy costs for these warehousing 
premises are approximately $2,300.

Power Plus USA, Inc. has leased office space totaling 6,800 square feet at 
1575 Main Street, in Sarasota at a monthly occupancy cost of approximately 
US$5,500, plus 2,600 additional square feet at 1614 - 1618 Ringling Road, in 
Sarasota at a monthly occupancy cost of approximately US$2,500.  Together, 
these two locations comprise the Company's North American Operations Office 
and the offices of Power Plus USA, Inc.  In addition, Power Plus USA, Inc. 
also leases a pager repair facility comprised of 2,650 square feet at 4005 
North Tamiami Trail, in Sarasota, on a month-to-month basis, at a monthly 
occupancy cost of approximately US$1,650, and 5,000 square feet at 1195 
Talvest Road, in Sarasota at a monthly occupancy cost of approximately 
US$2,400 for its warehouse.

As at 18 July 1997, the Company operated 19 stores in Ontario, Canada and 36 
stores in the US, totaling 55.  The Company's locations in the US are located 
in the following States:

           REGION          STATE          NUMBER OF LOCATIONS
           ------          -----          -------------------
           Southeast       Florida                20
           Southeast       Alabama                 5
           Southeast       Georgia                 3
           Southeast       Mississippi             1
           Southeast       Tennessee               1
           Southeast       North Carolina          2
           Northeast       Pennsylvania            4
                                                  --
                                  Total           36
                                                  --
                                                  --

Of the stores in Ontario, 16 stores, which opened primarily in Quarter 4 of 
Fiscal 1997, were open by the end of Fiscal 1997.  Similarly, of the stores 
in the US, 35 stores, which were opened primarily in Quarter 4 of Fiscal 
1997, were open at the end of Fiscal 1997.

Subject to availability and timing of financing proposed under the Financing 
Plan, PLAN 2000 provides for the opening of 950 new stores over the next 3 
1/2 years in a MARKET CLUSTER APPROACH and aims to create critical mass in 
certain target areas that offer particular advantages to the Company, such as 
under-developed or under-serviced markets, for paging and cellular wireless 
communications or under an umbrella of radio advertising.  PLAN 2000 
establishes a target of over 1000 stores by the end of the Year 2000.  (See

<PAGE>
                                                                     Page 22


ITEM 7 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS for a discussion of the Reorganization and related 
Financing Plan.)

In general, the terms of the Company's lease agreements have provided for: 
(i) a rentable area for each store of 150 to 700 square feet; (ii) a lease 
term normally of three, five or eight years; and, (iii) either a fixed annual 
rent, payable monthly or quarterly (ranging from a low of $12,144 in the 
first year of the least expensive lease to a high of $72,924 in the last year 
of the most expensive lease) and either together with (or, in some cases, in 
lieu of the annual rent) payments equal to a percentage, ranging from 6% to 
17%, of a store's adjusted gross sales during the year, or, alternatively in 
some cases, a variable annual rent equal of up to 10% of adjusted annual 
gross sales, net of sales taxes, plus rental taxes, if any.  The current 
rental market appears equally as favorable as in the past. Accordingly, the 
Company expects to enter into future leases on economically viable and 
commercially reasonable terms.

ITEM 3 --           LEGAL PROCEEDINGS
None

ITEM 4 --          SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
<PAGE>
                                                                         Page 23

                           PART II

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

A.   COMMON STOCK DATA

Commensurate with the approvals and implementation of the Company's 
Reorganization Plan and the related renaming of the Company, new stock 
trading symbols were adopted.  The Common Stock is listed on The Alberta 
Stock Exchange, Province of Alberta, Canada, and is traded under the symbol 
"PPC".  The former symbols were "BTB" and "BATT".  The Company is a reporting 
issuer in the Provinces of Alberta and British Columbia, in Canada, and the 
US.

Prior to January 1992, the Common Stock was included in the National 
Association of Securities Dealers Automated Quotation System ("NASDAQ"), 
trading NASDAQ small cap under the symbol "BATTF".  The Common Stock was 
delisted from NASDAQ small cap trading in January 1992 due to the Company's 
failure to satisfy certain minimum capital requirements.

Effective 19 December 1994, the Company resumed trading in the US on the 
NASDAQ OTC Bulletin Board under its old symbol BATTF.  No trades were 
reported for the period 31 December 1994 through 28 February 1995.  Beginning 
24 April 1995, the trading symbol was changed to "BATT" when the Company's 
application to qualify as an exempt foreign issuer was accepted by NASDAQ.  
Effective with the Company's name change to Power Plus Corporation, the new 
symbol for trading on the NASDAQ OTC Bulletin Board became "PPCO".

As part of the Company's Reorganization Plan, approval was obtained to 
reorganize and consolidate its capitalization on the basis of 20 
pre-consolidation shares for 1 post-consolidation share plus 1 exchange 
right, that is to 2,238,281 POST-CONSOLIDATION shares from the existing 
44,765,613 PRE-CONSOLIDATION shares.

After receiving shareholder approval in July 1996, final court and regulatory 
approval as required was obtained and the reorganization and consolidation 
(20:1 reverse-split) occurred effective 1 November 1996 and the Exchange 
Rights were issued accordingly.  (See also ITEM 7 - MANAGEMENT'S DISCUSSION 
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS concerning 
management's Reorganization Plan as it concerns the Common Shares, and recent 
sales of unregistered securities by the Company.)

The following table sets forth the reported high and low bid prices for the 
Common Shares as quoted by The Alberta Stock Exchange for each full quarterly 
period within the fiscal years ended 31 January 1997, 1996 and 1995, 
respectively, restated for the impact of the 20:1 reverse-split and expressed 
in Canadian dollars:

<PAGE>

                                                                         Page 24

<TABLE>
<CAPTION>

                     FISCAL 1997(1)            FISCAL 1996(1)             FISCAL 1995(1, 2)
                     -----------               -----------                -----------
                   High          Low         High          Low          High          Low
                   ----          ---         ----          ---          ----          ---
<S>              <C>           <C>         <C>           <C>          <C>           <C>  
1st Quarter       $2.80         $2.30       $8.00         $7.20        $7.60         $3.20
2nd Quarter       $3.80         $2.80       $6.60         $6.40        $9.60         $5.20
3rd Quarter       $7.20         $4.00       $6.00         $5.60        $8.20         $5.00
4th Quarter       $4.20         $2.75       $6.60         $6.00         n/a           n/a

</TABLE>

(1)  The Common Shares were subject to a reverse-split consolidation on      
     the basis of 20 old shares for one (new) Common Share, effective 1 November
     1996. All amounts reported in prior periods in the table have been restated
     for comparative purposes. (See also ITEM 7 - MANAGEMENT'S DISCUSSION AND
     ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS concerning
     management's Reorganization Plan as it concerns the Common Shares.)

(2)  Fiscal 1995 was a transition year of only nine months, and covered the 
     period from 1 May 1994 to 31 January 1995.

(3)  The Common Shares began trading under the symbol PPC.  Previously, the 
     shares traded under the symbol BTB AND BAT.

The following table sets forth the reported high and low bid prices for the 
Common Shares as quoted by NASDAQ - OTC for each full quarterly period within 
the fiscal years ended 31 January 1997, 1996 and 1995, respectively, restated 
for the impact of the 20:1 reverse split and EXPRESSED IN US DOLLARS:

<TABLE>
<CAPTION>

                     FISCAL 1997(1)            FISCAL 1996(1)             FISCAL 1995(1,2,3)
                     -----------               -----------                -----------
                   High          Low         High          Low          High          Low
                   ----          ---         ----          ---          ----          ---
<S>              <C>           <C>         <C>           <C>          <C>           <C>  
1st Quarter       $1.80         $0.90       $6.00         $5.63         n/a           n/a
2nd Quarter       $2.60         $1.50       $6.25         $4.38         n/a           n/a
3rd Quarter       $4.60         $1.88       $5.00         $1.80         n/a           n/a
4th Quarter       $2.88         $2.13       $3.60         $0.60         n/a           n/a

</TABLE>

(1)  The Common Shares were subject to a reverse-split consolidation on the   
     basis of 20 old shares for one (new) Common Share, effective 1 November
     1996. All amounts in prior periods reported in the table have been restated
     for comparative purposes. (See also ITEM 7 - MANAGEMENT'S DISCUSSION AND
     ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS concerning 
     management's Reorganization Plan as it concerns the Common Shares.)

(2)  Fiscal 1995 was a transition year of only nine months, and covered the 
     period from 1 May 1994 to 31 January 1995.

(3)  The Common Shares did not begin trading on the NASDAQ OTC Bulletin Board 
     until April 1995 which was Quarter 1 of Fiscal 1996.

(4)  The Common Shares began trading under the symbol PPCO.  Previously, the 
     shares traded under the symbol BATT and BATTF.

Because a substantial number of Common Shares that are held by agents in 
"street name", the Company is unaware of exactly how many of the outstanding 
Common Shares are held by residents of the United States.  As of 18 July 
1997, there is a total of approximately 2,500 beneficial holders of the 
7,620,730 issued and outstanding Common Shares.

Under the terms of the Company's current Special Notes convertible debt 
debentures financing, while this debt remains outs standing the Company is 
prohibited from making any distribution to its shareholders or declaring and 
paying any dividends on its Common Shares.  To date, the Company has not paid 
dividends on its Common Shares. (See ITEM 7 - MANAGEMENT'S DISCUSSION AND 
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Section C(1)(iv.) 
SPECIAL NOTES CONVERTIBLE DEBT FINANCING.)

<PAGE>

                                                                         Page 25
B.   EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

Acquisitions of control of businesses or corporations in Canada are regulated 
by the Investment Canada Act (the "Investment Act").  The Investment Act 
created an agency known as Investment Canada.  In certain circumstances, an 
investment to acquire control of a Canadian business is reviewable by said 
agency.  In other cases, only notice need be given to said agency and, in 
many cases, no action  need be taken at all.  The Investment Act does not 
apply to the acquisition of securities such as shares of the Company where 
the acquisition does not constitute an acquisition of "control" within the 
meaning of said term in the Investment Act. Generally, the term "control" 
means the possession, direct or indirect, of the power to direct or cause the 
direction of the management and policies of a person, whether through the 
ownership of voting securities, by contract or otherwise.  Under the 
Investment Act, the acquisition of more than 50% of the voting shares of a 
corporation is deemed to be an acquisition of control of such corporation, 
and the acquisition of one-third or more of the voting shares of a 
corporation is presumed to be an acquisition of control of such corporation 
unless it can be established that the acquirer does not control the 
corporation through the ownership of one-third or more of the voting shares.  
The acquisition of less than one-third of the voting shares of a corporation 
is deemed not to be an acquisition of control of such entity.

The Company is aware of no Canadian governmental laws, decrees or regulations 
nor any foreign exchange controls which restrict the import or export of 
capital or which affect the remittance of dividends, interest or other 
payments of non-resident holders of the Company's securities, except as 
discussed in ITEM 7 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL 
CONDITION AND RESULTS OF OPERATIONS.

The Company knows of no limitation on the rights of nonresident or foreign 
owners to hold or vote the Common Shares imposed by foreign laws and there 
are no provisions in the Company's charter or by-laws which restrict 
ownership of securities or prescribe restrictions on the payment of 
dividends, interest or other payments to shareholders.

C.   TAXATION

Dividends and other distributions deemed to be dividends paid or deemed to be 
paid by a Canadian resident corporation to a non-resident of Canada generally 
are subject to non-resident withholding tax equal to 25% of the gross amount 
of the dividend or deemed dividend.  Also, a non-resident of Canada is 
subject to tax in Canada at the rates generally applicable to residents of 
Canada on any "taxable capital gain" arising on the disposition of the shares 
of a Canadian public corporation if such non-resident, together with persons 
with whom he does not deal at arm's length, owned 25% or more of the issued 
shares of any class of the capital stock of the Canadian public corporation 
at any time in the five years immediately preceding the date of disposition 
of the shares.  The taxable portion of the capital gain is three-quarters of 
the actual gain from the disposition of the shares.

Canadian taxation of dividend and deemed dividend payments to and gains 
realized by non-residents of Canada who are residents of the United States 
are subject to the 1980 Canada-United States Income Tax Convention (the "1980 
Convention").  Under the 1980 Convention, the rate of Canadian non-resident 
withholding tax on dividends or deemed dividends paid to a United States 
resident may not exceed 15%, and in the case of a United States corporation 
that beneficially owns at least 10% of the voting stock of the corporation 
paying the dividend may not exceed 10% of the dividend or deemed dividend.  

<PAGE>

                                                                         Page 26

On March 17, 1995, the United States and Canada signed a protocol to the 1980 
Convention (the "1995 Protocol").

Ratified on 9 November 1995, the 1995 Protocol reduces the withholding rate 
on dividends from 15% to 10%, and, in the case of a dividend paid to a United 
States corporation that owns at least 10% of the voting stock of the payor 
corporation, to 7% for dividends paid in 1995, 6% for dividends paid in 1996, 
and 5% for dividends paid after 1996.  Where the dividends are received by a 
United States person carrying on business in Canada through a Canadian 
permanent establishment and the shares in respect of which the dividends or 
deemed dividends are paid are effectively connected with that permanent 
establishment, the dividends or deemed dividends are generally subject to 
Canadian tax as business profits, generally without limitation under the 1980 
Convention.

The 1980 Convention also provides that gains realized by a United States 
resident on the disposition of shares of a Canadian corporation may not 
generally be taxed in Canada unless the value of the Canadian corporation is 
derived principally from real property situated in Canada or the shares form 
part of the business property of a permanent establishment which the United 
States shareholder has or had in Canada within the twelve month period 
preceding the date of disposition.

Subject to certain limitations, generally Canadian income taxes paid or 
accrued by a United States resident to Canada on account of dividends or 
deemed dividends paid by the Canadian corporation and gains from the 
disposition of the Canadian corporation's shares are eligible for foreign tax 
credit treatment in the United States.

D.   RECENT SALES OF UNREGISTERED SECURITIES

See ITEM 7 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS Section C(1) FINANCIAL CONDITION, LIQUIDITY AND CAPITAL 
RESOURCES.

ITEM 6                      SELECTED FINANCIAL DATA

A.   SUMMARY DATA

The following selected financial data of the Company is presented for, and as 
of the end of Fiscal 1997, Fiscal 1996, Transition Fiscal 1995, and each of 
the former 12 month fiscal years ended 30 April 1994 and 1993.  (During 
Fiscal 1995, the Company changed its fiscal year end to 31 January from 30 
April.)  This information should be read in conjunction with ITEM 7 - 
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 
OPERATIONS and the Consolidated Financial Statements and the Notes thereto, 
included elsewhere herein.  The Company's Consolidated Financial Statements 
and related information have been prepared according to Canadian Generally 
Accepted Accounting Principles (CGAAP), however, these financial statements 
comply, in all material respects, with United States Generally Accepted 
Accounting Principles, except as described in Note 12 to the Company's 
Consolidated Financial Statements.

<PAGE>

                                                                         Page 27
<TABLE>
<CAPTION>

                                                                  
                                          FYE 31 JANUARY          TRANSITION             FYE 30 APRIL
                                     -----------------------       FYE ENDED       ----------------------
                                                                  31 JANUARY
                                       1997          1996(2)        1995(2)        1994(2)         1993(1)
                                     ------          -------      ----------       -------         -------
  -
<S>                               <C>            <C>            <C>             <C>             <C>
STATEMENT OF OPERATIONS DATA:
Total revenue                       $4,080,598     $5,375,229     $8,547,973     $10,223,192     $4,311,591
Net (loss)                         $(5,687,427)   $(4,541,551)   $(1,489,416)    $(2,063,707)     $(727,154)

Net (loss) per share (3) (4)
POST REVERSE-SPLIT                      $(2.54)        $(2.50)        $(0.94)         $(1.40)        $(0.60)
AS ORIGINALLY REPORTED                                 $(0.13)        $(0.05)        $(0.07)         $(0.03)

BALANCE SHEET DATA:
Total assets                       $11,043,854       $330,035     $5,182,679      $4,739,604     $4,326,026
Working capital                     $4,033,127      $(422,159)      $611,868        $161,473       $873,069
Long-term liabilities               $4,740,000            NIL            NIL             NIL            NIL
Total liabilities                   $7,455,813       $507,208     $2,152,401      $2,015,312       $743,587
Common shareholders'  
equity/deficiency (5)               $3,588,041      $(177,173)     $3,030,278     $2,724,292     $3,582,439

</TABLE>

(1)  Consolidated results of the Company and its Former
     Subsidiaries, including the acquisition of the US business
     in November 1992.

(2)  Consolidated results of the Company and its Former Subsidiaries.

(3)  The Common Shares were subject to a reverse-split consolidation on
     the basis of 20 old shares for 1 (new) Common Shares, effective 1 
     November 1996, during Quarter 4 of Fiscal 1997.  The comparative 
     amounts for reported periods prior to Fiscal 1997 have been 
     restated on the same basis.  The Common Share characteristics and
     entitlements are the same as the old shares.  (See also ITEM 7 
     --MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
     RESULTS OF OPERATIONS for more discussion concerning management's
     Reorganization Plan as it concerns the Common Shares.)

(4)  To date, the Company has not paid dividends on its Common Shares. 
     (See ITEM 5(A), above.)

(5)  In accordance with the Reorganization Plan and the Plan of 
     Arrangement, the stated capital amount and accumulated deficiency 
     in earnings were both reduced by $26,670,825, to better reflect the
     financial repositioning of the Company. (See also ITEM 7 - 
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
     RESULTS OF OPERATIONS for more discussion concerning Stated Capital
     Reduction.)

B.   EXCHANGE RATES

The following table sets forth, for the periods and dates indicated, certain 
information concerning exchange rates of United States and Canadian Dollars.  
All figures shown represent noon buying rates for cable transfers in New York 
City, certified for customs purposes by the Federal Reserve Bank of New York. 
The sources of this data are the Federal Reserve Bulletin and the 
International Financial Statistics prepared by the Bureau of Statistics of 
the International Monetary Fund.

<TABLE>
<CAPTION>

              C$  HIGH                C$  LOW                 AVERAGE             FISCAL YEAR END
              --------                -------                 -------             ---------------
           C/US       US/C        C/US       US/C         C/US       US/C        C/US        US/C
           ----       ----        ----       ----         ----       ----        ----        ----
<S>      <C>         <C>        <C>        <C>          <C>        <C>         <C>         <C>   
1997      $1.38       $0.73      $1.33      $0.75        $1.36      $0.74       $1.37       $0.73
1996      $1.36       $0.74      $1.28      $0.78        $1.32      $0.77       $1.32       $0.77
1995      $1.42       $0.70      $1.34      $0.74        $1.37      $0.72       $1.40       $0.71
1994      $1.26       $0.79      $1.40      $0.72        $1.32      $0.76       $1.38       $0.72
1993      $1.18       $0.85      $1.29      $0.78        $1.23      $0.81       $1.27       $0.79
1992      $1.29       $0.78      $1.14      $0.88        $1.21      $0.83       $1.27       $0.79

</TABLE>

<PAGE>

                                                                         Page 28

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

The following discussion and analysis should be read in conjunction with the 
Consolidated Financial Statements and the Notes thereto, which follow 
elsewhere herein.

The audited Consolidated Financial Statements for Fiscal 1997 reflect a 
period of fundamental change for Power Plus. The Company, renamed Power Plus 
Corporation, has literally shed its past by reorganizing and redirecting its 
business operations.

A.   THE BUSINESS IN EVOLUTION

Power Plus has combined two merchandising segments -- wireless communication 
products and services (beepers/pagers, cellular phones, Personal 
Communications Systems (PCS) and related airtime service contracts), PLUS 
portable electronics (the latest in hand-held electronics, communications, 
entertainment, business and lifestyle products).  Management has researched, 
planned and is implementing its NEW wireless communications business, called 
POWERFUL CONNECTIONS tangentially with the launch of its new POWERFUL STUFF 
retail chain throughout the US and Canada.  The distinction between them is 
that POWERFUL CONNECTIONS is the reseller of pager and cellular airtime and 
services, while POWERFUL STUFF is a chain of retail stores that sells the 
merchandise and makes the initial sales of the pager or cellular airtime 
service contract to the retail consumer.

1.   1 + 1 = 3  -- SYNERGISM AT WORK 

     The synergy and potential mutual benefits for the two merchandising 
     segments are noteworthy. In POWERFUL STUFF stores, the pagers (beepers) 
     and accessories generate higher average per transaction revenues and 
     earn strong secondary margins through related airtime and activation 
     sales.  The sale of the portable electronic products is complementary 
     and the related battery business provides particularly high margins from 
     specialty batteries and installation services, plus strong positioning 
     for the sale of innovative portable battery-powered products.

     The initial sales of contracts for wireless airtime and services 
     generates recurring revenues from customer subscriber fees and renewals 
     for POWERFUL CONNECTIONS.

     The priority of the POWERFUL STUFF retail chain is increasing the number 
     of stores and the sales productivity per store, while maintaining a 
     strong gross margin. POWERFUL CONNECTIONS, on the other hand, will focus 
     on providing the creative packaging and pricing of airtime, building a 
     loyal customer base for its rebilling business while maintaining a 
     strong gross margin.
     
     There are differences, however, in the key business fundamentals.
     
     POWERFUL STUFF focuses on its working capital -- turning inventory -- to 
     produce a return on its capital investment in fixed assets and 
     leaseholds, while POWERFUL CONNECTIONS' focus is on building a 
     utility-like cash flow from an increasing and loyal customer base.  On 
     one hand, POWERFUL STUFF requires capital to expand -- the timing and 
     amounts of capital injections determines the rate of the chain's growth 
     -- while, on the other hand, 
     
<PAGE>

                                                                         Page 29

     POWERFUL CONNECTIONS can expand with marginal capital investment. 
     POWERFUL CONNECTIONS' growth will, however, be highly dependent on the 
     expansion of the POWERFUL STUFF chains.
     
     In adding the wireless communications business, Power Plus enhances the 
     value of the POWERFUL STUFF retail chain and its opportunity to build 
     its own loyal customer franchise. Sales staff in POWERFUL STUFF stores 
     will be the principal sales force for the wireless communications 
     products and services.  As POWERFUL CONNECTIONS'  customer list grows 
     from 20,000 to over 1 million, as foreseen in PLAN 2000, all of these 
     customers will initially contract and pay for these services at a 
     POWERFUL STUFF store.  In fact, counting customers lost through normal 
     attrition over time, the stores will likely actually sign up more than 2 
     million new customers -- all of whom may purchase their pagers and 
     accessories, and perhaps other merchandise, at POWERFUL STUFF stores.  
     For that reason, POWERFUL STUFF stores will earn an agent's fee on the 
     sales of POWERFUL CONNECTIONS' airtime rebilling contracts, as well as 
     the normal margins on the sale of pagers and accessories.
     
     But the connection between the customer and the Company doesn't end 
     there. Considering that the average airtime billing cycle is every three 
     months, coupled with the fact that about 60% of the pager customers pay 
     their bills at a POWERFUL STUFF store, the pager business will improve 
     customer loyalty and their shopping frequency for the retail chain. 
     POWERFUL STUFF will be able to include "stuffers" that advertise special 
     promotions with the POWERFUL CONNECTIONS bills which are mailed on 
     average 4 times a year to all of its customers.  This inexpensive 
     targeted advertising may also help increase future sales at each 
     POWERFUL STUFF store.
     
2.   WIRELESS BUSINESS

     While the business of a reseller distribution channel is reasonably 
     established in the US, it is relatively new to Canada.  Cantel and Bell 
     Mobility do not currently have resellers; they sell direct and use 
     agents and retailers. PageMart and PageNet are major new entrants to the 
     paging business in Canada and both are in the process of setting up 
     reseller programs in Canada based on the models employed by their parent 
     companies in the US.
     
     The carrier, whether a pager or cellular network, provides service to 
     POWERFUL CONNECTIONS at highly attractive rates for the airtime.  In 
     turn, POWERFUL CONNECTIONS will repackage, sell, bill and service 
     customers IT attracts through the POWERFUL STUFF retail chains. For the 
     carrier, therefore, POWERFUL CONNECTIONS is a source of revenue. The 
     carrier is incentivized to maximize the growth of POWERFUL CONNECTIONS 
     -- if only to improve its own return on capital investment. In addition 
     to the variable cost of providing the airtime -- whether costed on a per 
     minute or per month basis, both are only incurred ONCE SOLD -- POWERFUL 
     CONNECTIONS also incurs the costs of acquiring customers commissions 
     paid to POWERFUL STUFF, advertising, billing, collecting, servicing and 
     accounting. Some of these costs are variable and others are fixed.
     
     A paging carrier can provide service for approximately $2 per month per 
     customer to a reseller.  The reseller might sell this service for 
     anywhere from $4 to $15 per number per month.  A cellular company might 
     make its network available to a reseller for a price ranging between 
     10CENTS and 20CENTS per minute (depending on the time of day), plus 
     charges for the telephone number, activation, etc.  The reseller obtains 
     a markup on this time.  
     
<PAGE>

                                                                         Page 30
     
     The potential for profit increases as more customers are added -- 
     because the volume discount increases as more customers are added and 
     much of the cost of the computerized backoffice overhead is fixed -- 
     better overhead leverage.
     
     Typically, the reseller must perform certain functions, most of which 
     are computerized:
     
         -   Marketing to the customer, contracting and activating the service,
             providing ongoing technical support  and retaining the customer.
  
         -   Credit screening and acceptance of credit risk, if any, and the 
             assumption of the risk for bad debts.
     
         -   Billing and collecting accounts receivables.
     
         -   Financing the customer receivables and paying the carrier 
             according to contracted schedules and terms.
     
         -   Blocking customers who do not pay their bills or terminating their
             service.  Some of these are reactivated.

     The business experiences a normal customer attrition rate, on average, 
     of between 5% and 10% per month.  Therefore, to avoid incurring ongoing 
     service costs, POWERFUL CONNECTIONS must be vigilant about the timing of 
     billing and collecting amounts due, and blocking and terminating 
     non-paying customers.  POWERFUL CONNECTIONS pays the carrier on a 
     monthly basis in arrears and must either collect from its customer (in 
     the same month) or terminate the service from the supply side in order 
     to cut future costs for which the Company will get paid.

     An important aspect of the reseller/retailer business is that POWERFUL 
     CONNECTIONS' customers receive periodic service invoices by mail which 
     can also include sales incentives for merchandise available at POWERFUL 
     STUFF stores.  A portion of the pager customers return to the store to 
     pay their bills in cash.  Their action enables the reseller/retailer to 
     keep in touch, reduces subscriber churn and provides an opportunity to 
     sell other merchandise --accessories are particularly high margin items. 
     Most cellular customers pay their bills directly by mail.

     By combining pager reseller and cellular services with retailing, 
     POWERFUL STUFF will work to obtain competitive advantages in the 
     marketplace.

         -   A reseller determines its own packaging of airtime and pricing, 
             and other enticements to attract new customers.

         -   The reseller is able to establish a direct service relationship 
             with customers who identify with the retail store -- not some 
             face-less carrier.

         -   Highly targeted advertising about accessories and new merchandise 
             at POWERFUL STUFF stores can be included with bills mailed to 
             customers.

         -   Over time, a reseller can build a highly refined customer list 
             into a tangible valued asset.

     With the many advances in communication products and services, new 
     product opportunities to combine reselling with retailing should emerge. 
     Management believes that POWERFUL STUFF is advantageously positioned to 
     attract new wireless customers for POWERFUL CONNECTIONS.

     The limited amount of capital investment required to build the pager 
     airtime rebilling business, compared to the cellular airtime rebilling 
     business, has caused management 

<PAGE>
                                                                         Page 31
                                                                         
     to prioritize accordingly.  In addition, the billing cycle 
     management proposes to utilize will actually produce increasing amounts 
     of positive cash flow over time, which amounts can be deployed to help 
     fund the POWERFUL STUFF store chain rollout program.

B.   RESULTS OF OPERATIONS
1.   FISCAL 1997

     i.  BUILDING THE BUSINESS

         Power Plus Corporation, with its Corporate Office now in Toronto,
         Canada, and its North American Operations Office in Sarasota, 
         Florida, is building a branded chain of specialty niche retail 
         stores which sells wireless telecommunications products and 
         portable fashion electronics. The Company expects approximately 85% 
         of its stores to be in the US. Through its wholly-owned 
         subsidiaries, Power Plus USA, Inc. and Power Plus Canada, Inc., 
         Power Plus operated 51 retail stores by the end of Fiscal 1997 
         under the trade name POWERFUL STUFF.  The majority of these stores 
         were opened in the last four months of Fiscal 1997. The stores, 
         operating from leased premises ranging from 150 to 700 square feet 
         in major enclosed shopping malls in the US and Canada, sell 
         wireless communication products and services (beepers, cellular 
         phones, personal communication systems and related service 
         contracts), and portable electronics (hand-held electronic 
         communications, entertainment, business and lifestyle products).  
         Through POWERFUL CONNECTIONS, the Company is building it wireless 
         airtime and service reselling business and a customer list that 
         will include all parties that were or are airtime customers of the 
         Company.
          
         At the beginning of Fiscal 1997, the Company was being restructured 
         and reorganized from its former self, then known as Battery One, 
         Inc.  Prior to the end of Fiscal 1996 the Company's Former 
         Subsidiaries were assigned into bankruptcy.  All of the Company's 
         operations through the end of Fiscal 1996, which had consisted 
         primarily of the sale of batteries and battery-related products to 
         consumers via Company-owned retail stores in Canada and the United 
         States, were conducted through the Former Subsidiaries and all of 
         its capital assets were owned by the Former Subsidiaries. 
         Accordingly, at the end of Fiscal 1996, the Company had no ongoing 
         retail operations and the comparative Consolidated Statements of 
         Operations for Fiscal 1996 and Fiscal 1995 present the results of 
         its former business.
          
         The Consolidated Financial Statements included with these materials 
         reflect that during the first two quarters of Fiscal 1997 the 
         Company acquired assets, operated only one store in Canada and 
         opened its first US store in July 1996. During Quarters 3 and 4 of 
         Fiscal 1997, Power Plus opened 36 new locations and acquired a 
         chain of 13 retail locations in Florida, bringing the number of 
         locations opened in total to 51, against PLAN 2000's target of 40, 
         by the end of Fiscal 1997.  In fact, most stores were opened in 
         mid- December. The timing of the store openings meant that revenues 
         were skewed to Quarter 4 which was, to the extent the stores were 
         fully operational, also favorably impacted by the peak Christmas 
         selling season.  As of 18 July 1997, the Company has 36 locations 
         open in the US and 19 

<PAGE>

                                                                         Page 32

         in Canada, totaling 55. At the end of Fiscal 1997, the 
         Company had 51 locations open.

         On 1 February 1996, the Company announced its Reorganization Plan 
         subdivided into two parts: PLAN 2000, the Company's 5-year business 
         plan prescribing the manner in which the Company would relaunch and 
         build its business to in excess of 1000 stores by the end of the 
         Year 2000; and, the Financing Plan which prescribed how the Company 
         would finance PLAN 2000's funding requirements. The Reorganization 
         Plan, which incorporated a related Plan of Arrangement, was 
         approved by the Company's shareholders at Fiscal 1996's Annual and 
         Special Meeting of Common Shareholders held on 24 July 1996.  The 
         Plan of Arrangement was approved by the regulators and court 
         immediately thereafter.
          
         Among other matters, shareholders approved as part of the 
         Reorganization Plan the Company's proposal to: change its name; 
         reduce its stated capital by all or virtually all of the 
         accumulated deficit; reorganize and consolidate its capitalization 
         on the basis of 20 pre-consolidation shares for 1 
         post-consolidation share plus 1 exchange right -- that is to 
         2,238,281 post-consolidation shares from then record date number of 
         44,765,613 pre-consolidation shares; and, refinance in accordance 
         with the Financing Plan.
          
         The Company's Reorganization Plan incorporated a related 3-year 
         Financing Plan, formerly approximately $42 million and recently 
         increased to $49.1 million.  The Company had received $15.4 million 
         as of the end of Fiscal 1997, providing the capital needed to fund 
         the first year implementation of PLAN 2000 and the related store 
         rollout program designed to achieve critical mass expeditiously and 
         economies of scale and operating efficiencies. (Please refer to the 
         table in Section C(4) - FINANCIAL CONDITION, LIQUIDITY AND CAPITAL 
         RESOURCES, below.)
          
         During Fiscal 1997, the Company invested $3,486,592 in capital 
         operating assets, compared to $-nil last year.  Of this amount, 
         $1,200,500 was invested in capital operating assets acquired and 
         $2,286,092 was added by purchasing or constructing capital 
         operating assets over the course of the year.  At the end of Fiscal 
         1997, the Company had non-merchandise inventory valued at $247,439 
         comprised of store furniture and fixtures and POS computer hardware 
         not yet put into service which was included in working capital and 
         that was not amortized.  These fixed assets will be deployed as new 
         stores are opened during Fiscal 1998.  Since the majority of stores 
         were opened in the last four months of Fiscal 1997 and because of 
         the limited time these fixed assets were deployed in the year, the 
         Company did not amortize its capital investment in those fixed 
         assets this year.
          
         During Fiscal 1997, the business grew by entering into store 
         leases, buying furniture and fixtures, purchasing equipment and 
         constructing/renovating store locations, and by acquiring 
         businesses.
          
   
<PAGE>

                                                                         Page 33
    a.)  POWER PLUS CANADA

           On 8 March 1996, the Company closed a purchase transaction with the 
           Trustee responsible for the realization of the assets BOSI whereby
           it acquired the inventory, furniture and equipment, kiosks, and 
           certain lease entitlements and proprietary interests of its former
           Canadian subsidiary, including an operating store location at
           Toronto's Square One, for cash consideration of $200,000.
           During an interim period, the Company employed the inventory,
           certain lease entitlements and trademarks in its skeletal
           operations. However, because the longer term redirection
           of the business operations called for a new
           appearance and substantial change to merchandise mix, the other
           assets acquired were sold in the ordinary course of business. 

           The Canadian POWERFUL STUFF chain was launched in July 1996. Since
           then 18 new locations have been opened in Ontario, in the Northeast
           Region, representing a capital investment of $1,109,932. Total
           capital investment in operating assets deployed in the business in
           Canada amounted to $1,309,932 compared to $-nil last year.
           (The $330,035 amount in assets reported last year pertained to the
           parent company and were not deployed as operating assets.)
         
    b.)  POWER PLUS USA
           On 17 May 1996, Power Plus USA, Inc., acquired the strategic
           Pittsburgh Airport AirMall location lease, formerly held by Etc.,
           from the Trustee upon approval of the Western District of New York
           Bankruptcy Court for cash consideration of $110,000 (US$70,000).
     
           The US POWERFUL STUFF chain also launched in July 1996, starting
           in the Northeast Region (Pittsburgh), and then in the Southeast
           Region (Florida, Georgia, Mississippi, North Carolina and Tennessee).
     
         -  The Northeast Region

           The US operations commenced with the opening of the Pittsburgh
           Airport AirMall store at the end of July 1996, ideally situated in
           the largest airport shopping center in North America, providing
           POWERFUL STUFF with a flagship store in one of the premier US
           transportation centers and the foundation for expansion in this
           Region.  Three additional locations were opened during Quarters 3
           and 4 of Fiscal 1997, to flesh-out the Pittsburgh District cluster.
           More locations are planned for the Pittsburgh District and a new
           District is planned for Detroit in Fiscal 1998.
     
         -  The Southeast Region
  
           The Southeast Region's expansion is a blend of new POWERFUL STUFF
           stores combined with the 13 retail locations acquired in Florida.
       
           On 17 June 1996, Power Plus USA agreed to purchase certain assets,
           lease entitlements and the business of PORTRONICS, a specially US
           retailer, from Consumer Electronics Specialty Stores, Inc. ("CESS"),
           located in Sarasota, Florida. The acquisition, which closed
           effective 1 September 1996, included 10 leased stores in Florida,
           inventories, two rented  warehouse/retail facilities and pager
           repair facilities, one office/retail location (for a total of 13
           retail locations) and CESS's proprietary interests.  An integral
           component of the assets purchased also included over 20,000 existing
           pager customers under 

<PAGE>

                                                                         Page 34

           contract and the sole right of the Company to the related future 
           rebilling revenue.

           Total consideration of $1,232,066, of which the final installment
           was paid during the first half of Fiscal 1998, was paid in a
           combination of cash and the assumption of certain trade liabilities
           as follows:

<TABLE>
<CAPTION>

    <S>                                <C>               <C>                                            <C>
     Assets acquired were:                                Consideration therefor was:
       Merchandise inventory              $341,566        Cash, on closing                                $599,189
       Furniture, fixtures & equipment     205,500        Current liabilities assumed                      119,178
       Customer list                       685,000        Amount paid subsequent to Fiscal 1997            513,699
                                           -------                                                         -------
                                        $1,232,066                                                      $1,232,066
                                        ----------                                                      ----------
                                        ----------                                                      ----------

</TABLE>


           In addition, Power Plus opened a total of 22 new locations in
           Georgia, North Carolina, Alabama, Tennessee and Mississippi
           by year end, representing an incremental capital investment in
           operating assets of $1,286,160.

           On 12 August 1996, the Company announced an agreement in principle
           to enter into a joint venture with C-Con Acquisition Company Inc. of 
           Florida to resell cellular telephone services through POWERFUL STUFF
           retail stores.  In light of priorities otherwise, it was determined
           to abort this transaction at no cost or expense to the Company
     
     ii. MANAGEMENT PRIORITY FOR FISCAL 1997 WAS PLANNING FOR THE FUTURE
 
          During the first half of Fiscal 1997 in the early start up phase, the 
          Company had only 1 store open, 20 by the end of Quarter 3 and 51 by
          the end of the year.  The weighted average number of months that
          stores were open during the year was only 3 -- substantially less
          than break-even, which is estimated to be 125 stores.
    
         In this context, and as was expected, the administrative and overhead 
         costs, including specialty legal and accounting fees for restructuring 
         and reorganizing the Company following the bankruptcies of the Former 
         Subsidiaries, were substantial.  Also, new management invested 
         significant time researching and planning for the Company's future,
         for which the administrative and overhead costs have also been
         substantial in context of the start up operations.  For most of
         the year, the Company's management was occupied in laying the
         foundations for the building process which began only late in Fiscal
         1997.

         In addition, the Company, in anticipation of the planned future growth 
         of the business, made the strategic decision to hire an experienced
         and proven senior management team which may appear to some to be more
         than is required for current business needs -- but, is in fact
         considered necessary to prepare for delivering the growth
         contemplated in PLAN 2000. Hiring in anticipation of need represents
         a form of insurance -- to both accomplish the goals set out in
         PLAN 2000, and to prudently drive and manage the planned rapid growth
         process.  This, therefore, is another reason administrative and
         overhead expenses for Fiscal 1997 appear higher than they would
         be otherwise for a mature operation. The 
         Company intends to continue its pre-hiring policy for the next two
         years as planned to provide and train the management required to
         accomplish its goals and objectives.
         

<PAGE>

                                                                        Page 35

         While management did have the option of capitalizing certain of these 
         expenditures, which represented a substantial amount in the aggregate, 
         the decision was made to expense them in the period incurred so that
         the future results of the new business would not be tarnished by any
         amount of amortization from these non-recurring expenses in future
         periods.

         The long-term business of the Company is building and operating the 
         POWERFUL STUFF retail store chains and POWERFUL CONNECTIONS wireless 
         reseller business.  The transition from the planning to the operating 
         phase is being marked by the building of an experienced operating team 
         and, accordingly, management foresees that administrative and overhead 
         expenses will come into line with industry standards, and ultimately 
         become suitably leveraged as the future numbers of stores and wireless 
         customers increase.
     
     iii.CONSIDERATION OF FISCAL 1997 BUSINESS RESULTS

         The following table sets forth certain items reflected in the
         Company's consolidated statement of operations expressed as
         percentages of sales:
     
<TABLE>


                                                                PERCENTAGE OF SALES
                                                        ----------------------------------
                                                                            TRANSITION FYE 
                                                          FYE 31 JANUARY      31 JANUARY
                                                        ------------------    ----------
                                                         1997        1996        1995
                                                        ------      ------      ------
<S>                                                    <C>        <C>          <C>
Cost of sales                                           58.5%       42.4%       49.1%
Operating, occupancy & administrative expenses           n/a       133.3%       66.2%
Net loss                                                 n/a        84.9%       17.4%

</TABLE>

(1)  Operating and administrative expenses included write-off of assets 
     abandoned in 1996.

     Cost of sales as a percentage of total sales for the period
     reported on herein was 58.5%, reflecting certain inefficiencies
     which management believes are short-term. These include the cost
     of writing off inventory, restructuring the merchandise mix and
     the negative impact of less than optimal purchasing power facing
     a small chain lacking sufficient credit support from vendors.
     Management expects the Cost of Sales to decrease over time as a
     percentage of sales once the Company reaches critical mass and
     settles on its merchandise mix.  In addition, the Company has
     recently began developing and nurturing new relationships with
     vendors and expects this will lead to a better gross 
     profit, benefiting from lower merchandise costs in the future
     and other cost abatement inducements from vendors.
     
     Fiscal 1997's operating and administration expenses, are not
     comparable to Fiscal 1996, principally because pursuant and
     subsequent to the bankruptcies of the Former Subsidiaries,
     the Company was initially focused on reorganizing, restructuring
     and planning for the future. Fiscal 1996 expenses also included
     the loss on the abandonment of assets in Fiscal 1996.  In the
     long-term, the Company's administration is expected to be
     structured so that a number of new stores can be 
     
<PAGE>

                                                                         Page 36

     added without a corresponding increase in administrative overhead,
     thus leveraging on the fixed overhead expenses.

     The amount of amortization for the period increased in comparison
     to Fiscal 1996 because the Company had acquired assets during the
     year and had capitalized certain intangible assets (deferred costs
     of issuing Special Notes and deferred issuing costs of warrant
     financings), and was amortizing the discount on the Special Notes
     at the rate of $70,000 per quarter.
     
     No corporate income taxes were payable in Fiscal 1997. Management 
     expects the amount of accrued income tax losses being carried forward 
     and available for sheltering future business income is
     approximately $20 million.  This amount is not reported in the
     Consolidated Balance Sheet.
     
2.   FISCAL 1996

     By the final quarter of Fiscal 1996, it had become apparent to then 
     management that on the basis of the Company's share capitalization, and 
     in consideration of the continued non-profitability of Etc., the 
     Company, notwithstanding its best efforts, was not able to complete the 
     financing of former management's turnaround program on the basis 
     contemplated. The poor performance of Etc. resulted from a number of 
     unproductive stores situated in secondary locations committed to by 
     prior management, which were subsidized by BOSI to its serious detriment.
     
     In December 1995, BOSI made a voluntary assignment into bankruptcy 
     pursuant to the CANADIAN BANKRUPTCY AND INSOLVENCY ACT.  In December 
     1995, Etc. made a voluntary petition seeking protection under Chapter 11 
     of the US BANKRUPTCY CODE, which in January 1996 was converted to a 
     Chapter 7 filing.  The Company is the largest creditor of the Former 
     Subsidiaries but does not expect to receive any recovery of substance 
     upon the winding up of these bankruptcies expected during Fiscal 1998.
     
     The Company is not directly nor indirectly liable for any debt or 
     liability of the Former Subsidiaries and has no outstanding guarantees 
     or undertakings with respect to any third party claim against the Former 
     Subsidiaries.
     
     All of the Company's operations, which consisted primarily of the sale 
     of batteries and battery-powered products to consumers via Company-owned 
     retail stores in Canada and the United States, were conducted through 
     the Former Subsidiaries and all of its capital assets were owned by the 
     Former Subsidiaries. As at 31 January 1996, the Company, therefore, had 
     no ongoing retail operations.
     
     The Consolidated Statements of Operations for Fiscal 1996 reflect the 
     decline in operations experienced by the Former Subsidiaries, as 
     compared to Fiscal 1995.  The loss from operations reported in the 
     Company's Consolidated Financial Statements is $4.4 million.  In 
     addition, the loss on abandonment of Former Subsidiaries in the amount 
     of $118,767, increased the net loss to $4.5 million.
     
     The Consolidated Financial Statements for Fiscal 1996 and 1995 include 
     the accounts of the Battery One, Inc., BOSI and Etc.  All significant 
     intercompany accounts and transactions between the parent company and 
     the Former Subsidiaries were eliminated.
     
     No corporate income taxes were payable in Fiscal 1996. Management 
     expects the amount of accrued income tax losses, being carried forward 
     and available for sheltering 

<PAGE>

                                                                         Page 37

     future business income, is approximately $15 million.  This amount is 
     not reported in the Consolidated Balance Sheet.

3.   TRANSITION FISCAL 1995

     The Company sustained substantial operating losses while attempting to 
     turn around the US operation during the latter part of Fiscal 1995 and 
     which continued into Fiscal 1996. The plan, designed to improve 
     operating efficiencies, strengthen management depth and upgrade the 
     corporate image with customers, over time proved to be too little too 
     late. During Fiscal 1995, the Company changed its fiscal year end to be 
     more consistent with other retailers, redesigned its standard kiosks and 
     added new directors and executive officers.
     
     As a result of the fiscal year end change, sales volume for Fiscal 1995 
     declined to $8.6 million from $10.2 million for Fiscal 1994.  Sales 
     volume increased $600,000, or 8% over the same nine-month period last 
     year.  Fiscal 1995's net loss was $1.5 million, compared to $2.1 million 
     loss reported at the end of prior year.
     
     The US operations contributed $6.1 million sales to Transition Fiscal 
     Year 1995's consolidated sales (71.7% of the total), compared with $7.2 
     million in sales to the Fiscal 1994 consolidated results (70.1% of the 
     total). The fractionation in sales approximates the proportion of 
     locations in the US and Canada. Throughout Fiscal 1995, the Company 
     operated 68 stores -- 49 in the US (72% of the total) and 19 in Canada.
     
     Operating expenses as a percentage of sales decreased in Fiscal 1995 
     compared to Fiscal 1994.  Operating expenses as a percentage of sales 
     were 66.2% in Transition Fiscal 1995 compared to 75.3% in Fiscal 1994.  
     The decrease in 1995 reflects the ongoing benefits flowing from 
     consolidating the administrative functions into one location and 
     streamlining.
     
     The Company's consolidated net loss for 1995 (no taxes were payable in 
     Fiscal 1995)  was $1.5 million compared to $2.1 million in Fiscal 1994.  
     The US operations accounted for about 66.6% of the 1995 net loss, 
     compared to 66% of the 1994 net loss.  The 1995 and 1994 losses equated 
     to losses per share of $0.05 and $0.07 on an increased weighted average 
     number of common shares outstanding of 34,694,521 compared to 
     31,806,154.  The comparable losses per share, restated for the effect of 
     the 20:1 reverse-split, equate to $1.00 and $1.40, respectively.
     
C.   Financial Condition, Liquidity and Capital Resources

The Company's Reorganization Plan approved last year incorporated a 3-year 
$42 million Financing Plan which was recently increased to $49.1 million.  
The Financing Plan provides the framework to fund the initial growth and 
related interim working capital shortfall.  This is the period according to 
PLAN 2000 before the Company becomes self-sustaining, that is when future 
growth can be self-financed from internally generated cash flows. Management 
projects that the Company must expand to the 125 store level before it will 
attain profitable operations.  Management anticipates reaching critical mass 
by the end of calendar 1997.  It is expected that long-term debt and new 
equity capital will provide the necessary funding for future growth and the 
operating losses incurred during this growth stage, although no assurances 
can be given that this funding will be completed as planned.  As at Fiscal 
1997 year end, the Company had raised the equity capital and long-term debt 
it had forecasted.
<PAGE>

                                                                         Page 38

For an overview of both completed financings and planned financings, please 
refer to the table in Section C(4) - SUMMARY OF CHANGES TO SHARES AND SHARE 
CAPITAL, below.

Management estimates that the Company will attain the ability to fund its 
future rate of growth from internally generated cash flows at approximately 
the 600 store-level. Subject to the timing and amounts received, management 
estimates that the Company can become self-sustaining by the end of Fiscal 
1999.  The current Financing Plan calls for $49.1 million, needed to meet the 
rapid pace set by management of the rollout program.  The change in the 
amount relates to the additional costs of reorganizing and planning phases, 
the impact of the deviation in the timing of the receipt of capital proceeds 
from the Exchange Rights which was originally forecasted for early December 
1996 (theoretically in time for merchandise purchases for the Christmas 
season but since this amount was received at the end of January 1997, it was 
too late to be deployed to boost Christmas sales), and the acquisition of the 
13 retail locations in Florida in September 1996.

1.   FINANCIAL INSTRUMENTS DEPLOYED BY THE FINANCING PLAN

     The financing-related securities, including the Special Warrants and the 
     Special Notes which are convertible into Common Shares, were sold by 
     private placement to ACCREDITED INVESTORS.  These securities were issued 
     pursuant to the applicable securities laws in the governing 
     jurisdictions and were not registered or sold principally in the US. 
     Sales of the securities in the US were made in reliance upon the 
     exemption form registration contained in Section 4(2) of the SECURITIES 
     ACT OF 1933, as amended.  (Please also refer to the table in Section C(4)
     - SUMMARY OF CHANGES TO SHARES AND SHARE CAPITAL, below.)

     i.   FISCAL ADVISOR ENGAGED FOR FISCAL 1997

          The Company engaged C.M. Oliver & Company Limited of Toronto (the 
          "Agent") effective 1 March 1996 as its fiscal advisor and agent for 
          a one-year term.  The term was not extended. The Agent assisted the 
          Company on a best efforts basis in raising the capital required for 
          its Reorganization Plan, in accordance with the Financing Plan.  
          The Agent's compensation includes a warrant to purchase up to 4.5 
          million pre-consolidation shares of the Company at 10 CENTS per 
          share (225,000 post-consolidation Common Shares at $2.00 per 
          share).  This share purchase option considered on a 
          post-consolidation basis represents potential dilution of up to 
          675,000 Common Shares, and the possibility of up to $1.2 million in 
          the aggregate in additional capital.  During Fiscal 1997, 205,219 
          Common Shares were issued to the Agent for $410,438.  The balance 
          of up to 19,781 Common Shares, representing potential additional 
          capital proceeds of up to $39,562 are expected to be exercised in 
          September 1997.

          As well, the Agent's compensation included a 8% commission for 
          certain capital amounts raised.  During Fiscal 1997, the Company 
          paid a total of $752,000 in cash and 45,000 Common Shares as a 
          payment in kind on account of commission and finder's fees.

<PAGE>

                                                                         Page 39
     ii.  1996 SPECIAL WARRANT PRIVATE PLACEMENT FINANCING

          During Fiscal 1997, the Company completed the 1996 Special Warrant 
          Private Placement Financing (the "1996 Special Warrants") of $4.5 
          million representing an aggregate of 45 million 1996 Special 
          Warrants.  The closings of the first and second tranches took place 
          on 1 March and 2 April 1996, representing 38.5 million 1996 Special 
          Warrants, which were issued at a purchase price of 10 CENTS per 
          Special Warrant (or 2.25 million 1996 Special Warrants at $2.00 on 
          a post-consolidation basis), for gross proceeds of $3.85 million, 
          of which $1.1 million had been received prior to 31 January 1996.  
          An additional 6.5 million 1996 Special Warrants representing gross 
          proceeds of $650,000 were issued prior to the end of September 
          1996, completing the 1996 Special Warrant Financing in its entirety.

          Each 1996 Special Warrant was converted effective 31 January 1997 
          at no additional consideration into 1 Common Share plus 1 Class B 
          Warrant which consists of two entitlements: firstly, entitling 
          holders to acquire up to an aggregate of 2.25 million Common Shares 
          at an exercise of $2.00 per share (equivalent to 45,000,000 shares 
          at 10 CENTS per share on a pre-consolidated basis), on or before 30 
          September 1997, representing additional potential future capital to 
          the Company in the aggregate of up to $4.5 million; and, secondly, 
          and subject to the exercise of the Class B Warrant, a collateral 
          Class BB Warrant, entitling holders to acquire up to an aggregate 
          of a further 2.25 million Common Shares at an exercise purchase 
          price of $2.50 per share (equivalent to 45,000,000 old shares at 
          12.5 CENTS per share on a pre-consolidated basis), on or before 1 
          March 1998, representing additional potential future capital in the 
          aggregate of up to $5.6 million. The aggregate future capital 
          injection potentially to be derived from the Class B and BB 
          Warrants on a fully exercised basis is $10.1 million.

          The 1996 Special Warrant financing terms provided that the Company 
          would incur a 10% penalty payable by the issuance of additional 
          1996 Special Warrants to the holders of the 1996 Special Warrants, 
          that is a further 4.5 million 1996 Special Warrants on a 
          pre-consolidation basis in prescribed circumstances, representing 
          additional dilution of 225,000 Common Shares. Those prescribed 
          circumstances required the Company to file a prospectus in Ontario 
          and Alberta by 14 June 1996 to qualify the 1996 Special Warrants as 
          free-trading to be lawfully offered to the public, and to obtain a 
          final prospectus receipt by 26 July 1996, failing which the penalty 
          would be invoked.  The Company was unable to meet such obligations 
          and the penalty has therefore been incurred.  The entitlements 
          attached to these penalty 1996 Special Warrants are the same as the 
          1996 Special Warrants.

          Holders of the penalty 1996 Special Warrants will not be required 
          to pay to receive the Common Shares included therein, but the Class 
          B and BB Warrants attached thereto will include the same exercise 
          price required to be paid for them to be acquired, that is $2.00 
          per Common Share for the Class B Warrant and $2.50 per Common Share 
          for the Class BB Warrant.  The penalty 1996 Special Warrants 
          represent up to an aggregate of 450,000 additional Common Shares in 
          dilution, and the potential of up to an aggregate of $1 million in 
          additional capital on a fully diluted basis.


<PAGE>

                                                                         Page 40

          None of the Class B Warrants, Class BB Warrants, Penalty Class B 
          Warrants or Penalty Class BB  Warrants were exercised prior to year 
          end.  As of 18 July 1997, 550,000 Class B Warrants have been 
          exercised providing $1.1 million gross proceeds.

          On 30 June 1997, the Company announced by news release that it has 
          received approval for a three-month extension of the expiry date of 
          the outstanding Class B Warrants and Class B Penalty Warrants from 
          30 June 1997 to 30 September 1997. All other terms and conditions 
          remained the same.

     iii. SHARE CAPITAL REORGANIZATION AND CONSOLIDATION AND EXCHANGE RIGHTS 
          ENTITLEMENTS

          The reorganization and consolidation of the Company's outstanding 
          share capital occurred pursuant to a Plan of Arrangement under 
          Section 86 of the BUSINESS CORPORATIONS ACT, ALBERTA, which had 
          received shareholder, court and regulatory approval.  In general 
          terms, the Company reorganized and consolidated all of its issued 
          old shares (of which 44,765,613 pre-consolidation shares had been 
          issued and outstanding as of 1 November 1996) on the basis of every 
          20 old shares before consolidation being reorganized and 
          consolidated into 1 Common Share (that is, after consolidation 
          there would be 2,238,281 issued post-consolidated Common Shares) 
          plus 1 Exchange Right. Under the terms of this consolidation, 
          respecting the loyalty of the Company's long-term shareholders and 
          seeking their continuing support on an equal footing with the 
          Special Warrant holders, and considering the Company's capital 
          requirements, each consolidated Common Share had attached to it 1 
          exchange entitlement (the "Exchange Rights") to purchase 1 unit of 
          the Company's equity (the "Exchange Rights Units") on or by 31 
          January 1997.

          The Exchange Rights entitled holders to purchase up to an aggregate 
          of 2,238,281 Exchange Rights Units of the Company at an exercise 
          price of $2.00 per unit (equal to 10 CENTS per unit on a 
          pre-consolidation basis), on or before 31 January 1997.

          Each Exchange Rights Unit consisted of one Common Share plus one 
          purchase warrant, hereinafter referred to as the Class A Warrants.  
          The Class A Warrants shall consist of two entitlements: firstly, 
          entitling holders to purchase 2,238,281 Common Shares of the 
          Company at an exercise price of $2.00 per Common Share (equivalent 
          of 10 CENTS per share on a pre-consolidation basis), on or before 30
          September 1997, representing additional potential future capital to 
          the Company up to an aggregate of $4.5 million (less the amount 
          exercised during Fiscal 1997); and, secondly, conditional upon the 
          exercise of the Class A Warrant, a collateral warrant, hereinafter 
          referred to as the Class AA Warrant, entitling holders to purchase 
          up to an aggregate of a further 2,238,281 Common Shares of the 
          Company at an exercise price of $2.50 per Common Share (equivalent 
          of 12.5 CENTS per share on a PRE-CONSOLIDATION basis), on or before 
          1 March 1998, representing additional potential future capital to 
          the Company in the amount of up to an aggregate of $5.6 million 
          (less the amount already exercised). The potential capital 
          injection that may be derived from the Exchange Rights on a fully 
          diluted basis is $10.1 million in the aggregate.

          Effective 31 January 1997, all the Exchange Rights, which entitled 
          the holder to purchase 1 (post-consolidation) Common Share for 
          $2.00 and receive 1 Class A 


<PAGE>

                                                                         Page 41

          share purchase warrant, were converted into 2,238,281 Common Shares 
          and the Company received $4,476,562 in new capital.

          Prior to the end of Fiscal 1997, 30,525 Class A Warrants and 1,475 
          Class AA Warrants were exercised, representing dilution of 31,000 
          Common Shares and providing $64,737 additional capital.   As of 18 
          July 1997, 422,443 Class A and 4,225 Class AA Warrants have been 
          exercised providing approximately $855,000 proceeds.

          On 30 June 1997, the Company announced by news release that it has 
          received approval for a three-month extension of the expiry date of 
          the outstanding Class A Warrants from 30 June 1997 to 30 September 
          1997.  All other terms and conditions remained the same.

     iv.  SPECIAL NOTES CONVERTIBLE DEBT FINANCING

          The Company initially received approval for a $6 million, 5-year 
          10% Special Note private placement financing offering. The Company 
          has recently obtained conditional regulatory approval to increase 
          this Offering by $5 million, making it now up to $11 million, in 
          the aggregate, with the same terms and conditions. During Fiscal 
          1997, the Company completed the $6 million placement in two 
          closings. Each $1,000 principal amount of Special Notes may be 
          converted into an equivalent principal amount of 5-year, 10% 
          convertible fixed and floating secured debentures, currently 
          representing potential future dilution of up to 2.4 million Common 
          Shares. This convertible debt is fully secured by all the assets of 
          Power Plus Corporation.

          At any time on or after the third anniversary date of the issuance 
          of the Special Notes, the Company has the right, upon reasonable 
          notice, to compel holders to convert all or any part of the 
          indebtedness into Common Shares at $2.50 per Common Share, on the 
          condition that the Common Shares have traded at a weighted average 
          price of $4.00 per Common Share or greater during the preceding 10 
          trading days. Failing conversion by holders in the circumstances of 
          such notice, the Company has the right to repay the whole or any 
          part of the indebtedness, on a PRO RATA basis.

          Interest is payable on the Special Notes semi-annually, on the 31st 
          days of January and July, respectively. Interest paid on the 
          Special Notes during Fiscal 1997 was $251,100.

          The $5 million increase to the Special Notes financing represents 
          the potential of additional dilution of up to 2 million Common 
          Shares, thereby making it 4.4 million Common Shares in the 
          aggregate. Management anticipates completing the private placement 
          of this additional $5 million Special Notes during August 1997 but 
          since this is a best efforts financing, again, no assurances can be 
          given as to its completion.


<PAGE>

                                                                         Page 42

     v.   1997 SPECIAL WARRANT PRIVATE PLACEMENT FINANCING

          The Company has recently obtained conditional regulatory approval 
          to a Special Warrant Private Placement Financing (the "1997 Special 
          Warrants Offering") of $3 million comprised of 1,714,286 Special 
          Warrants, each having a purchase price of $1.75. Each Special 
          Warrant is convertible into 1 Common Share plus 1 share purchase 
          warrant entitling the holder to purchase, for up to one year period 
          thereafter, 1 additional Common Share for $2.00, representing up to 
          $3.4 million in potential additional capital.  The Company, 
          therefore, could issue up to 3,428,572 Common Shares over the next 
          year for aggregate proceeds of up to $6.4 million pursuant to this 
          1997 Special Warrants Offering.

          Management anticipates completing this 1997 Special Warrants 
          Offering during August 1997, although since it is a best efforts 
          financing no assurances can be given either as to the timing or the 
          amount to be completed. 

2.   FUTURE POTENTIAL FUNDING FROM THE FINANCING PLAN

     In addition to the foregoing amounts aggregating $15.4 already received 
     by the Company at the end of Fiscal 1997, the 3-year Financing Plan 
     supporting PLAN 2000 as modified now provides future potential funding 
     of up to $33.7 million, summarized by year as follows:

     i.   FISCAL 1998

          To satisfy the projected requirements for calendar 1997 or Year 2 
          of PLAN 2000, the Financing Plan provides for the projected 
          completion of the 1997 Special Warrants and the completion of the 
          $5 million Special Notes, both during August 1997, plus the Class A 
          Warrants attached to the post-consolidated Common Shares and the 
          Class B Warrants attached to the 1996 Special Warrants which are 
          projected to be exercised on or before 30 September 1997.  While no 
          assurances can be given that such financings will be completed in 
          full or on time as planned to meet the financial requirements for 
          calendar 1997, if completed then additional aggregate capital will 
          be available to the Company as follows:


               Class A Warrants (1,2)                  $5 million

               Class B Warrants (3)                    $5 million

               1997 Special Warrants, first tranche    $3 million

               Special Notes, convertible debt         $5 million
                                                       ----------
               Total                                  $18 million
                                                      -----------
                                                      -----------

               (1)  Includes maximum proceeds from Agent's Option Class A 
                    Warrants.

               (2)  The amount has been adjusted for proceeds received in 
                    Fiscal 1997.

               (3)  Includes maximum proceeds derived from the Penalty Class B 
                    Warrants.


     ii.  FISCAL 1999

          To satisfy the Company's financial requirements for calendar 1998 
          or Year 3 of PLAN 2000, the Financing Plan provides for: the 
          two-year Class AA Warrants attached to the Common Shares and the 
          two-year Class BB Warrants attached to the 1996 Special Warrants, 
          which are both projected to be exercised on or before 1 

<PAGE>

                                                                         Page 43

          March 1998; as well as the share purchase warrants attached to the 
          1997 Special Warrants projected to be exercised during August 1998. 
          While no assurances can be given that these warrants will be 
          exercised, the Class AA and BB Warrants and 1997 Special Warrants 
          share purchase warrants will provide additional aggregate capital 
          as follows:

               Class AA Warrants                       $6.1 million

               Class BB Warrants                       $6.2 million

               1997 Special Warrants, second tranche   $3.4 million
                                                       ------------
               Total                                  $15.7 million
                                                      -------------
                                                      -------------


     iii. FISCAL 2000 AND BEYOND

          PLAN 2000's Financing Plan provides the framework for potential 
          sources of new capital in the aggregate of up to $49.1 million 
          during Calendar Years 1996, 1997 and 1998 to fund the 
          implementation of PLAN 2000.  Long-term debt and new equity capital 
          are the sources of funding for both future growth and the operating 
          losses incurred during this growth stage.  As at Fiscal 1997 year 
          end, the Company had raised both the equity capital and long-term 
          debt envisioned in the Financing Plan.  Subject to the availability 
          of the funding, the Company's management anticipates reaching 
          critical mass by the end of calendar 1997 and financial 
          self-sufficiency, in accordance with PLAN 2000 assumptions, 
          including the rollout of new stores, after the total number of 
          stores opened exceeds 600.

          On the basis of the successful completion of the Financing Plan 
          through Year 3 of PLAN 2000, and subject to PLAN 2000 performing on 
          target, the Company would, in the opinion of management, have 
          sufficient resources to repay the Special Notes during Year 4 of 
          PLAN 2000 (if not by then converted), if desirable and required to 
          do so, as well as to complete the rollout of PLAN 2000 as proposed 
          for Years 4 and 5, without the Company being required to raise 
          additional capital and incur further equity dilution.  The Company, 
          however, can give no assurances that this will in fact be the case. 


3.   SUMMARY OF CHANGES TO SHARES AND SHARE CAPITAL 

     The following table presents the potential impact on share 
     capitalization from the realization of the Financing Plan, as currently 
     revised, as of 18 July 1997, reflecting transactions completed in Fiscal 
     1997.  The table sets out those components of the Financing Plan already 
     fully completed and the estimated timing applicable to other components. 
      The information is presented on a fully diluted basis and does not 
     account for the portions of the Class A, AA and B Warrants exercised to 
     date. 

     While no assurances can be given that any or all of the future events 
     will be completed in full in accordance with the estimated timing, as 
     set out in the Financing Plan, if all elements were completed and 
     exercised in full prior to their respective expiry dates, as the case 
     may be, then the number of Common Shares and the fully diluted share 
     capital, exclusive of allowable management incentive options reserves, 
     would be as follows:

<PAGE>

                                                                         Page 44

<TABLE>
<CAPTION>

                                                                                             SHARES    CAPITAL         TIMING
                                                                                           ----------  -------         ------
       $ amounts are expressed in Canadian Dollars in millions; assumes maximum dilution)                       COMPLETED  ESTIMATED
                                                                                                                ---------  ---------
<S>                                                                                        <C>           <C>    <C>        <C>      

i   CONSOLIDATED, BEGINNING SHARE CAPITALIZATION  (from 44,765,613 shares on 20:1 basis):

    a.) Post-consolidation number of Common Shares and equivalent number of                 2,238,281     $0.0  Nov. 1996           
        Exchange Rights Units

    b.) Potential dilution and capital raised from Exchange Right Units and included
        Class A & AA  Warrants:

        i)   One Exchange Rights Unit  to receive one Common Share at $2.00 and one         2,238,281     $4.5  Jan. 1997           
             Class A Warrant

        ii)  One Class A Warrant to purchase one Common Share at $2.00 and receive          2,238,281     $4.5             Sep. 1997
             one Class AA Warrant  (note: 30,525 Class A Warrants were exercised
             prior to Fiscal 1997 year end.)

        iii) One Class AA Warrant to purchase one Common Share at $2.50                     2,238,281     $5.6             Mar. 1998
             (note: 1,475 Class AA Warrants exercised prior to Fiscal 1997 year end.)

        iv)  Agent's Option to purchase 225,000 Common Shares at $2.00 and receive            225,000     $0.5  Dec. 1996           
             equal number of Agent's Option Class A Warrants

        v)   Agent's Option Class A Warrants to purchase up to 225,000 Common Shares          225,000     $0.5  Mar. 1997           
             at $2.00 and receive equal number of Agent's Option Class AA Warrants

        vi)  Agent's Option Class AA Warrants to purchase up to 225,000 Common                225,000     $0.6             Mar. 1998
             Shares at $2.50

ii  1996 SPECIAL WARRANT PRIVATE PLACEMENT FINANCING

    a.) Special Warrants for $2.00 that were exchanged during  first quarter of  Fiscal     2,250,000     $4.5  Mar. 1996           
        1998 for Common Shares and an equivalent number off Class B Warrants

    b.) One Class B Warrant to purchase one Common Share at $2.00 and receive               2,250,000     $4.5             Sep. 1997
        one Class BB Warrant

    c.) One Class BB Warrant to purchase one Common Share at $2.50                          2,250,000     $5.6             Mar. 1998

    d.) Penalty Special Warrants  to receive 225,000 Common Shares at  no cost and            225,000     $0.0  Jan. 1997           
        255,000 Class B Penalty Warrants

    e.) Class B Penalty Warrants to purchase up to 225,000 Common Shares at $2.00             225,000     $0.5             Sep. 1997
        and receive equal number of  Class BB Penalty Warrants

    f.) Class BB Penalty Warrants to purchase up to 225,000 Common Shares at $2.50            225,000     $0.6             Mar. 1998

iii SPECIAL NOTES:  CONVERTIBLE INTO COMMON SHARES AT $2.50 PER SHARE

    a.) $6 million - first and second tranche                                               2,400,000     $6.0  Sep. 1996           

    b.) $5 million - third tranche                                                          2,000,000     $5.0             Aug. 1997

iv  1997 SPECIAL WARRANT PRIVATE PLACEMENT FINANCING

    a.) Special Warrants purchase warrants for $1.75 to purchase Common Shares              1,714,285     $3.0             Aug. 1997

    b.) Special Warrants share purchase warrants to purchase Common Shares for $2.00        1,714,285     $3.4             Aug. 1998
                                                                                            ---------     ----
v   NUMBER OF SHARES, FULLY DILUTED (1)                                                    24,881,694
                                                                                           ----------
                                                                                           ----------
vi  CAPITAL AVAILABLE, ASSUMING FULL DILUTION                                                            $49.1
                                                                                                         -----
    Less amounts already received:

       during Fiscal 1997                                                                                $14.3

       during Fiscal 1996                                                                                 $1.1
                                                                                                         -----
vii POTENTIAL CAPITAL DERIVED FROM EXISTING FINANCING INSTRUMENTS                                        $33.7
                                                                                                         -----
                                                                                                         -----

    (1)  Excludes amount of allowable management incentive options.  There are no such options issued.

</TABLE>


<PAGE>

                                                                         Page 45

4.   STATED CAPITAL REDUCTION

     In accordance with the Plan of Arrangement incorporated in the 
     Reorganization Plan, the Company reduced both the stated capital amount 
     for the Common Shares and the accumulated deficit by $26,670,825, 
     effective 31 July 1996. It is management's opinion, after making the 
     adjustment, that the balance sheet better represents the financial 
     repositioning of the Company resulting from the reorganization and 
     restructuring, and the appropriate current financial condition of the 
     Company as it proceeds to implement its 5-year business plan.

5.   PRIOR TO FISCAL 1997

     Over the several years prior to Fiscal 1997, the Company experienced 
     significant operating losses and was required to meet ongoing cash flow 
     requirements by selling shares on a private placement basis. The Company 
     raised approximately $1.8 million during the 9-month period ended 31 
     January 1995.  On 29 July 1994, 3 million share purchase warrants were 
     exercised and the Company issued 3 million shares for cash proceeds of 
     $660,000.  In addition, on 29 July 1994 the Company completed a private 
     placement financing of special warrants.  The Company issued 6,363,636 
     special warrants at 22CENTS each, for cash proceeds of $1.4 million.  
     Each special warrant entitled the holder to convert the special warrant 
     at no further consideration into one common share and one-half of one 
     regular warrant.  One regular warrant entitled the holder to purchase 
     one share of common stock at $1.00 per share on a pre-consolidation 
     basis or $20.00 per share post-consolidation.  During Fiscal 1996, 
     4,498,454 special warrants were exchanged, 1,279,000 special warrants 
     were exchanged during Fiscal 1995 and the remainder in February 1996 
     were exchanged for common shares.  No regular warrant, which has now 
     expired, was exercised.

D.   OUTLOOK

Last year, the Company estimated that it could open 40 stores by year end -- 
it accomplished 51 -- and today has 55 stores opened compared to only 1 a 
year ago.  Last year, the Company estimated that it would raise $13 million 
for funding for the reorganization and restructuring, and for planning and 
commencing operations in accordance with PLAN 2000.  In fact, the Company 
received $15.4 million.  Last year, the Company was planning for opening a 
chain of retail stores, whereas now the chain is a North American reality. 
POWERFUL STUFF stores incorporate a distinctive and appealing look that 
landlords, vendors and staff are enthusiastic about -- and POWERFUL 
CONNECTIONS is a new, complementary wireless airtime rebilling business that 
has the ability to produce increasing and substantial cash flow with minimal 
capital investment.  Last year, the Company was preoccupied with 
restructuring and reorganizing, but this year management is busy building the 
future business.  This represents a dramatic change. Management estimates, 
subject to the availability and timing of planned financing, that by the end 
of Fiscal 1998 the Company can achieve critical mass by opening 125 stores -- 
the break even point.

Until the Company reaches critical mass, however, it will be dependent on the 
timing and availability of external financings to sustain its operations in 
the start up mode and for expansion capital.  As the pace of the rollout is 
responsive to management control, it can, 


<PAGE>

                                                                         Page 46

within the short-term, be adjusted to conform to the financing risk.  But, 
until the Company exceeds critical mass and can rely on the cash flow from 
normal operations to sustain those operations, it is, in the meantime, 
required to rely on the timing and availability of financings. At its current 
size, the Company can be responsive and flexible, but until it exceeds the 
estimated 125 store break-even point, the business will not generate surplus 
cash.  Accordingly, when the timing and availability of financings deviates 
from the assumptions in PLAN 2000, the business may be also adversely 
impacted.  In the short-term, the Company can responsibly conserve cash by 
controlling merchandise purchases resulting, however, in a  temporary sales 
decline.

ITEM 7a--      QUANTITATIVE AND QUALITATIVE 
               DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8 --      FINANCIAL STATEMENTS AND 
               SUPPLEMENTARY DATA

The financial statements and schedules listed in Item 14(a) hereof are 
incorporated herein by reference and are filed as a part of this report.

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

During Fiscal 1997, there were no changes in nor disagreements with the 
Company's auditors concerning accounting and financial disclosure.

During Fiscal 1996, the Company's Board of Directors changed the Company's 
auditors to BDO Dunwoody, Chartered Accountants, of Toronto, Canada, 
effective 16 April 1996, on the recommendation of the Company's Audit 
Committee and in accordance with the National Policy No. 31 of the CANADIAN 
SECURITIES ADMINISTRATION, replacing Price Waterhouse LLP, Certified Public 
Accountants, of Pittsburgh, Pennsylvania, which appointment was approved at 
the Company's last annual general meeting of shareholders.  By written 
acknowledgment dated 15 April 1996, Price Waterhouse LLP advised the Company 
of its determination that it was no longer in a position to continue its 
audit engagement.  The resignation arose out of circumstances surrounding the 
relocation of the Company's executive offices from the United States to 
Toronto, Canada, and the related application of that accounting firm's 
governing corporate policies in such circumstances.  During the Company's two 
most recent fiscal years and the subsequent interim period preceding the 
resignation, there were no disagreements with Price Waterhouse LLP on any 
matter of accounting principles or practices, financial statement disclosure, 
nor auditing scope or procedures.

<PAGE>

                                                                         Page 47

                                   PART III

ITEM 10 --     DIRECTORS AND EXECUTIVE OFFICERS 
               OF THE REGISTRANT

The following table sets forth the names of all directors and executive 
officers of the Company as of 18 July 1997, all positions and offices held by 
each such person with the Company or each such person's principal occupation 
or employment, the name and principal business of any organization by which 
such person has been employed for the past five fiscal years, and the period 
during which such person has served as such.

A.   DIRECTORS AND EXECUTIVE OFFICERS

At Fiscal 1996's Annual and Special Meeting of Common Shareholders held on 24 
July 1996, the shareholders adopted a special resolution to amend the 
Articles and By-Laws of the Company to provide for the election and 
retirement of the directors in rotation, and for the terms governing the 
removal of directors.  The amendments divided the Board of Directors into 
three classes, as nearly equal in number as the then total number of 
directors may permit.  At Fiscal 1996's meeting, J. Douglas Elliott and R. 
Bruce Freeman were elected  as directors and agreed to stand, each for a term 
of office expiring at the third succeeding annual meeting of shareholders.  
Eric D. Sigurdson was elected a director and agreed to stand for a term of 
office expiring at the second succeeding annual meeting of shareholders.  The 
Company's Board of Directors is currently comprised as follows:


<TABLE>
<CAPTION>

                                                                                         COMMENCEMENT      CONCLUSION OF
     NAME              AGE                         POSITION                               OF SERVICE       CURRENT TERM
     ----              ---                         --------                               ----------       ------------
<S>                    <C>     <C>                                                        <C>               <C>        
J. Douglas Elliott     45      Director of the Company since 1994 and Chairman,           19 August         July 1999  
                               CEO and President of the Company since December               1994
                               1995; Lawyer by background; President of Elliott &
                               Associates, Inc. 1987 to present; Elliott & Associates
                               provides consulting services to the investment and 
                               financial services industries specializing in the 
                               structuring, financing and management of investment 
                               opportunities, and financial public relations.   

R. Bruce Freeman       44      Director of the Company since 1989, Vice Chairman          13 January        July 1999
                               of the Company since 1993 and CFO and Treasurer               1989
                               since September 1995; Chartered Accountant by
                               background, with joint degree in accounting and law;
                               Managing Partner of Freeman & Associates which 
                               provides consulting services to corporations and 
                               individuals in the investment and financial services 
                               industries specializing in the structuring, financing and 
                               management of special projects; Prior to May 1991, 
                               Vice-President and Chief Financial Officer of 
                               Magnasonic Canada, Inc., a corporation which held 
                               major interests in Sanyo Canada, Inc., Major Video 
                               Super Stores and holds an interest in Magnasonic
                               Lloyds Company, Inc.

</TABLE>

<PAGE>

                                                                         Page 48

<TABLE>
<CAPTION>

                                                                                         COMMENCEMENT      CONCLUSION OF
     NAME              AGE                         POSITION                               OF SERVICE       CURRENT TERM
     ----              ---                         --------                               ----------       ------------
<S>                    <C>     <C>                                                         <C>              <C>      
Eric D. Sigurdson      45      Director of the Company since 1995, a Chartered             1 March          July 1998
                               Accountant by background, and the principal of                1995
                               Keystone International, involved in management 
                               consulting and business development, emphasizing 
                               mergers & acquisitions and strategic direction.  Mr.
                               Sigurdson is currently rolling out the aggressively 
                               expanding Krispy Kreme specialty doughnut store 
                               chain in the St. Louis and Chicago markets for which 
                               he acquired the regional development rights.  Mr.
                               Sigurdson was formerly employed by The Horsham 
                               Corporation and its US subsidiary, Clark Refining & 
                               Marketing Inc., as its Executive Vice President and 
                               Chief Financial Officer. Prior to his employment with 
                               Horsham, Mr. Sigurdson was President and a Director 
                               of Toronto Dominion Real Estate Inc., a real estate 
                               investment banking venture of Toronto Dominion 
                               Bank, and Director of Mergers & Acquisitions of
                               Toronto Dominion Securities Inc. Mr. Sigurdson also 
                               serves as a member of the Company's Audit and 
                               Advisory Compensation Committees.

</TABLE>


To strengthen the Company's new operations, the Board of Directors has 
resolved to increase its membership from three (3) to seven (7) members and 
to seek the election of the following new members for the following terms at 
the upcoming 12 September 1997 Annual General Meeting of Common Shareholders.

1.   JOHN S. BRONSON -  Mr. Bronson has agreed to stand for election to the 
     Company's Board of Directors for a term of office expiring at the third 
     succeeding annual meeting of shareholders.  Mr. Bronson, the Chairman of 
     the Company's Advisory Council and Compensation Committee, is the 
     Executive Vice President of Human Resources of Pepsi-Cola Worldwide 
     Beverage Co. of Somers, New York.  Mr. Bronson brings a depth of 
     multiple unit retail organizational experience and marketing background 
     with his commitment to the Company.  Amongst other responsibilities with 
     PepsiCo, Mr. Bronson headed up the Human Resources strategy and 
     implementation for 6,000+ Kentucky Fried Chicken, Pizza Hut and Taco 
     Bell units in over 80 countries. 

2.   MICHEL DUBUC -  Mr. Dubuc has agreed to stand for election to the 
     Company's Board of Directors for a term of office expiring at the first 
     succeeding annual meeting of shareholders. Mr. Dubuc is a member of the 
     Company's Advisory Council.  An Architect Associate AIA for over 25 
     years, Mr. Dubuc is the principal of the renowned, award-winning Michel 
     Dubuc Concept, a specialty firm he founded bringing together a full-time 
     staff of 45 Architects, Interior Designers and Graphic Artists to offer 
     innovative and market-sensitive design solutions for individual and 
     chain retailers.  Mr. Dubuc's firm has been responsible for the 
     conceptualization of numerous retail store prototypes and the design of 
     over 1,200 projects with the emphasis on the US retail marketplace.  Mr. 
     Dubuc and his firm were commissioned by Power Plus to assist in the 
     development of the company's new generation of POWERFUL STUFF stores. 

3.   HARLEY MINTZ - Mr. Mintz has agreed to stand for election to the 
     Company's Board of Directors for a term of office expiring at the third 
     succeeding annual meeting of shareholders.  Mr. Mintz, a Chartered 
     Accountant, has been Managing Partner of Mintz 


<PAGE>

                                                                         Page 49

     & Partners, Chartered Accountants, of Toronto, Canada, since 1982.  
     Mintz & Partners is the 15th largest accounting firm in Canada.  As a 
     member of NEXIA International, Mintz & Partners is also part of the 15th 
     largest accounting organization in the world, with affiliates in 7 
     Canadian cities and more than 80 countries.  Mr. Mintz serves as a 
     member of the Advisory Council and Compensation Committee of Power Plus. 

4.   DAVID A. WILLIAMS - Mr. Williams has agreed to stand for election to the 
     Company's Board of Directors for a term of office expiring at the second 
     succeeding annual meeting of shareholders. Mr. Williams is a member of 
     the Company's Advisory Council.  Mr. Williams, the principal of 
     Roxborough Holdings Limited, is now an active private investor who, 
     amongst his diverse financial interests, seeks out special situation 
     small cap opportunities such as Power Plus, committing capital, time and 
     experience to companies he invests in to assist such companies during 
     their high-growth phase of development. Mr. Williams was formerly the 
     President and Chairman of Beutel, Goodman, a highly regarded Canadian 
     investment counseling firm, during a period of extraordinary growth when 
     that firm expanded to over $11.6 billion under management.

There is no arrangement nor understanding known to the Company between any 
person named above, other than as disclosed herein.  (See ITEM 13 -- CERTAIN 
RELATIONSHIPS AND RELATED TRANSACTIONS.)  There are no family relationships 
between any director or executive officer and any other director or executive 
officer of the Company.

During Fiscal 1997, the Board of Directors held sixteen (16) meetings, of 
which all meetings were attended by all members of the Board of Directors.  
The minutes of such meetings together with all other consent resolutions of 
the Board of Directors were distributed to all directors for signature and 
approval.  The Company's Corporate Secretary appointed by the Board of 
Directors is Michael J. Perkins.  Mr. Perkins, the Managing Partner of 
Ogilvie & Co., Barristers & Solicitors, of Calgary, Alberta, is also the 
Company's specialty Canadian securities counsel. With a multi-dimensional law 
practice, Mr. Perkins has an accomplished reputation advising public 
companies, specializing in organizational matters, statutory compliance and 
venture capital/corporate finance.

The Company is required to have an AUDIT COMMITTEE which currently consists 
of R. Bruce Freeman (Chairman), J. Douglas Elliott and Eric D. Sigurdson.  
The general function of the Audit Committee is to review the overall audit 
plan and system of internal controls of the Company, to review the results of 
the external audit and to resolve any problems with the Company's auditors.  
During Fiscal 1997, the Audit Committee held six (6) meetings at which all 
members attended.  Upon Messrs. Bronson and Mintz being elected and standing 
to the Board of Directors, it has been resolved by the Board of Directors 
that they will be appointed members of the Audit Committee.

The Company's Board of Directors has also established a MANAGEMENT COMMITTEE 
which consists of J. Douglas Elliott and R. Bruce Freeman, the constitution 
and membership of which has been approved by the shareholders.  The 
Management Committee, during the intervals between meetings of the Board of 
Directors, is entitled to exercise all powers of the Board of Directors in 
respect of the management and direction of the business and affairs of the 
Company (save and except only those specified in Section111 of the BUSINESS 
CORPORATIONS ACT ALBERTA, in all cases in which specific direction shall not 
have been given by the Board of Directors).  The Management Committee meets 
as required to fulfill its mandate.


<PAGE>

                                                                         Page 50

The Company has no other standing Committees of the Board of Directors.

The Company has formed an ADVISORY COMPENSATION COMMITTEE which currently 
consists of John S. Bronson (Chairman), Harley Mintz and Eric Sigurdson.  The 
general function of the Advisory Compensation Committee is to review the 
Company's overall compensation policy and to ensure an independent review of 
compensation.  None of the Company's officers participated in any decisions 
concerning the compensation of officers.  Upon Messrs. Bronson and Mintz 
standing as directors, it has been resolved by the Company's Board of 
Directors that the Advisory Compensation Committee will then be duly 
constituted as a standing committee of the Board going forward.

The Company has also formed an ADVISORY COUNCIL composed of a number of 
diversified and accomplished business executives, experienced and acclaimed 
in their respective fields of endeavor.  Mr. John S. Bronson is currently 
Chairman of the Advisory Council and Managing Advisor, International 
Relations. The general function of the Advisory Council is to act as an 
action-oriented, think-tank resource group to assist and support the 
Corporation's Board of Directors and its management team to execute and 
expand upon the strategic corporate business plan.  In some circumstances, 
the Advisory Council will serve as a forum for certain members to be 
considered for future directorships, as in the case of Messrs. Bronson, 
Mintz, Williams and Dubuc, all of whom are now standing for election to the 
Board of Directors of the Corporation (see ITEM 10 B. (i), (ii), (iii) & 
(iv), above). Areas of targeted expertise include marketing, merchandising, 
real estate, franchising, human resources, public relations, finance and 
international affairs. The Directors will augment the membership of the 
Advisory Council from time-to-time, but currently its members include John S. 
Bronson, Frederick  Ley (human resources), Harley Mintz (corporate 
structuring and taxation), Stephen Mamarchev (market research), David A. 
Williams (strategic planning) and Michel Dubuc (store design).  Upon Messrs. 
Bronson, Mintz, Williams and Dubuc being elected and standing as directors, 
they will no longer serve as members of the Advisory Council.

On 29 September 1994, in the US District Court for the Northern District of 
California, the US Securities and Exchange Commission ("SEC") issued a 
complaint for injunctive and other relief against J. Douglas Elliott, 
Chairman, CEO and President of the Company, in a matter unrelated to the 
Company.  The complaint alleges that in various periods during 1990 and 1991, 
Mr. Elliott, while an officer and director of Dimples Group Inc. ("Dimples"), 
a Canadian corporation engaged in the manufacture and distribution of 
diapers, violated Section 10(b) of the SECURITIES EXCHANGE ACT OF 1934 and 
Rule 10b-5 thereunder in connection with a general solicitation of US 
investors in the United States to purchase Dimples securities.  The SEC 
complaint alleged that Mr. Elliott, among other things, wrote press releases 
that were materially misleading in that they included revenue projections and 
statements regarding the test-marketing of Dimples' diaper product, Dimples' 
financing efforts and information on production and sales figures that did 
not have a reasonable basis in fact.

Mr. Elliott has informed the Registrant as follows in regard to the SEC 
complaint:

     He denies the SEC's allegations and considers that they are 
     themselves without any reasonable basis in fact.  He disputes that 
     the SEC has any jurisdiction in respect of Dimples and its 
     management.  He will vigorously 


<PAGE>

                                                                         Page 51

     pursue legal remedies available to him in the circumstances as 
     required and advised.

     Mr. Elliott has also advised the Company that he believes the SEC 
     complaint resulted from an investigation undertaken by the SEC 
     arising out of unfounded allegations made by former management of 
     Dimples to the SEC in 1991.  Mr. Elliott has advised that these 
     complaints of former management were the subject of legal and 
     administrative proceedings in Canada, in which, according to Mr. 
     Elliott, these allegations were found to be without merit and to be 
     an abuse of process, the proceedings having been determined in 
     favor of Dimples and Mr. Elliott.  Mr. Elliott has indicated that 
     he, Dimples and its management rely upon these findings in their 
     defense.

This complaint is not expected to have any material impact on future operating 
results or the financial conditions of the Company.

B.   EXECUTIVE OFFICERS

The Company's officers are chosen by and serve at the pleasure of the Board 
of Directors.  In addition to certain Directors who are also executive 
officers of the Company, set forth below is certain background information 
regarding other executive officers of the Company appointed by the Directors 
to strengthen the Company's new operations. Hiring and developing the human 
resources to propel POWERFUL STUFF to 1000+ stores and a $500+ million 
business is a major challenge facing Power Plus.  To meet PLAN 2000's 
objectives, all senior management of the Company must be experienced and 
proven executives WHO HAVE DONE IT BEFORE. The strategy is to hire 
professionals who bring with them the experience and discipline of 
successfully implementing the policies, procedures and programs required to 
manage multi-unit retail operations, with numerous employees, in 
decentralized locations, and to make them profitable.

1.   PAUL BRUNETTE, SENIOR VICE PRESIDENT, MERCHANDISING AND RETAIL SERVICES 
     -  Mr. Brunette was formerly with the Incredible Universe division of 
     Tandy Corporation as Merchandise Manager for consumer electronics. 
     Previously, Mr. Brunette was responsible for the development and 
     implementation of national merchandising and marketing programs as 
     National Category Manager for Circuit City Stores. Prior to his National 
     Category assignment, he held a number of progressive merchandise 
     positions within Circuit City. Mr. Brunette will be responsible for the 
     strategic direction of POWERFUL STUFF merchandising, including buying, 
     merchandising promotions and vendor relations, as well as customer 
     services and warehousing and distribution. 

2.   REBECCA L. HARVEY, SENIOR VICE PRESIDENT, RETAIL OPERATIONS  -  Ms. 
     Harvey was formerly Vice President, Sales/Human Resources Administrator 
     of Champs Sports, where she had responsibility for human resource 
     functions, store operations, and training programs during the period 
     when Champs grew from 40 to over 500 stores.  Ms. Harvey previously 
     worked in training and development for Joske's of Texas Department 
     Stores (Allied Stores) and Maas Brothers Department Stores.  Ms. Harvey 
     was also Director, National Accounts, for AEI Music Network where she 
     was responsible for creating enhanced audio and media environments for 
     major retail chains.  Ms. Harvey will be responsible for POWERFUL 
     STUFF's operations and the 


<PAGE>

                                                                         Page 52

     Company's marketing strategy, as well as for recruiting and training of 
     the 4000 POWERFUL STUFF people needed to achieve PLAN 2000's objectives. 

3.   KENNETH C. MARINO, SENIOR VICE PRESIDENT, REAL ESTATE - Mr. Marino was 
     formerly Director of Real Estate for Sunglass Hut International, Inc. 
     During a period of exceptional growth and multiple unit rollout, Mr. 
     Marino played a key role in Sunglass Hut's expansion to over 2000 stores 
     in shopping centers across North America.  Mr. Marino will be 
     responsible for POWERFUL STUFF's real estate rollout program. 

4.   RONALD K. SCHMIDT, VICE PRESIDENT, CONSTRUCTION  - Mr. Schmidt has 
     extensive retail construction background, working with national tenants 
     and contractors in a project management capacity with various 
     developers, including Rouse, Federated Stores Realty and Prime Group.  
     In addition to construction his responsibilities, Mr. Schmidt has been 
     responsible for overseeing tenant coordination programs while working on 
     mall developments, including Town Center in Boca Raton, Tampa Bay 
     Center, Foot Hills Mall in Tucson and Sherway Gardens Mall in Toronto.  
     Mr. Schmidt will employ his 20 years of retail construction experience 
     to build Power Plus' construction division to support the development of 
     250+ POWERFUL STUFF stores a year.

C.   MANAGEMENT ORGANIZATION CHART




                        [MANAGEMENT ORGANIZATION CHART]


<PAGE>

                                                                         Page 53

D. FORMER SIGNIFICANT EMPLOYEES

The Company no longer maintains employment associations with:

     i.   Mr. G. Thomas Alison, formerly acting Chief Operating Officer;

     ii.  Mr. Chuck Rogers, formerly Vice President, Retail Operations;

     iii. Ms Sandra Porter, formerly Vice President, Finance and Administration;

     iv.  Mr. Kenneth Levin, formerly Senior Vice-President, Wireless Division; 
          and,

     v.   Mr. Joseph Adler, formerly Vice President, Construction.

E.   SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

None of the Company's officers or directors have filed reports on Forms 3, 4 
& 5 with the Securities and Exchange Commission.  Officers and directors file 
similar insider reports with The Alberta Stock Exchange as required.

ITEM 11 -- EXECUTIVE COMPENSATION

1.   During Fiscal 1997, the Company employed a total of ten (10) executive 
     officers.  The aggregate cash compensation (including salaries, fees, 
     commissions, bonuses paid for services rendered during the most recently 
     completed fiscal year, bonuses paid during the most recently completed 
     fiscal year for services rendered in a previous fiscal year, and any 
     compensation other than bonuses earned during the most recently 
     completed fiscal year the payment of which was deferred) paid to such 
     executive officers by the Company and its subsidiaries for services 
     rendered during Fiscal 1997 was approximately $766,438. 

2.   There were no amounts set aside nor accrued by the Company during Fiscal 
     1997 to provide pension, retirement or similar benefits for the officers 
     and directors of the Company, pursuant to any existing plan, contract, 
     authorization or arrangement provided or contributed to by the Company. 

3.   The directors of the Company are entitled to but have not received a fee 
     for attending meetings and are reimbursed for travel and other expenses 
     properly incurred while attending meetings of the Board of Directors or 
     any committee thereof or in the performance of their duties as directors 
     of the Company.  The directors are eligible to receive stock options 
     pursuant to the Company's Incentive Stock Option Plan, as described 
     below. 

4.   INCENTIVE STOCK OPTION PLAN

     i.   Pursuant to a resolution of the Board of Directors of the Company 
          dated 20 June 1996, the Company established a stock option plan for 
          the Board of Directors, management, employees, consultants and 
          associates of the Company (the "Stock Option Plan"). The 
          shareholders approved and ratified the adoption of the Stock Option 
          Plan at Fiscal 1996's Annual General and Special Meeting of Common 
          Shareholders. The purpose of the Stock Option Plan is to afford 
          persons who provide services to the Company, whether as directors, 
          management, employees or otherwise, an opportunity to obtain a 
          proprietary interest in the Company by 


<PAGE>

                                                                         Page 54

          permitting them to purchase Common Shares and to aid in attracting, 
          as well as retaining and encouraging, the continuing involvement of 
          such persons with the Company.  Subject to the terms of the Stock 
          Option Plan, the Board of Directors have full authority to 
          administer the Stock Option Plan upon such terms as the Board of 
          Directors, in their sole discretion, shall determine, provided no 
          option shall be granted under the Stock Option Plan after 10 July 
          2001. Up to ten percent (10%) of the issued and outstanding Common 
          Shares of the Company, from time-to-time on a non-diluted basis, 
          have been reserved and set aside for issuance upon exercise of 
          options which may be granted pursuant to the Stock Option Plan. 

     ii.  A copy of the Stock Option Plan may be obtained at no charge by 
          each shareholder of the Company upon written request being made to 
          the Chief Financial Officer of the Company, at the executive 
          offices of the Company. 

     iii. No stock options were granted to executive officers or directors 
          during Fiscal 1997. 

     iv.  There are no stock options issued and outstanding as at the date 
          hereof.  However, the Board of Directors of the Company has 
          resolved, subject to regulatory approval, to reserve for issuance 
          up to and until 30 September 1997, stock options to purchase up to 
          and including 950,000 Common Shares for granting to the Company's 
          directors, officers, employees, advisors and consultants, at an 
          exercise price of $1.25. This resolve is a matter of business for 
          the resolve of the Company's shareholders at Fiscal 1997's upcoming 
          Annual General Meeting of Common Shareholders on 12 September 1997. 

5.   OTHER PLANS

     i.   The Company does not have any pension or retirement plans.

     ii.  There is no plan or arrangement in respect of compensation received 
          or that may be received by executive officers or directors in the 
          most recently completed fiscal year with a view of compensating 
          those officers in the event of their termination of employment or a 
          change of responsibilities following a change of control. 

     iii. Other than as herein set forth, the Company did not pay any 
          additional compensation to the executive officers or directors 
          (including personal benefits and securities or properties paid or 
          distributed which compensation was not offered on the same terms to 
          all full-time employees), during Fiscal 1997. 

6.   Other than as herein set forth, no director, executive officer nor any 
     of their respective associates or affiliates is or has been at any time 
     since the beginning of the last completed fiscal year indebted to the 
     Company or any of its subsidiaries. 

7.   There are no material interests, direct or indirect, of the current 
     directors, executive officers, and shareholders who beneficially own, 
     directly or indirectly, more than five percent (5%) of the outstanding 
     Common Shares or any known associate or affiliates of such persons, in 
     any transaction which has materially affected the Company other than as 
     hereinafter set forth.

None of the Company's executive officers participated in any decisions 
concerning the compensation of executive officers, this being expressly the 
responsibility of the Company's Advisory Compensation Committee.

<PAGE>

                                                                         Page 55

ITEM 12 --     SECURITY OWNERSHIP OF CERTAIN 
               BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the amount of Common Shares beneficially owned 
by directors and executive officers of the Company and each person known by 
the Company to be beneficial owner of more than five percent of the Common 
Shares as of 18 July 1997.

A.   DIRECTORS AND OFFICERS SHAREHOLDINGS

<TABLE>
<CAPTION>

                                                                  AMOUNT AND NATURE OF           PERCENT
     NAME OF BENEFICIAL OWNER                                    BENEFICIAL OWNERSHIP (1)      OF CLASS (2)
     ------------------------                                    ------------------------      ------------
     <S>                                                                 <C>                   <C>
     J. Douglas Elliott                                                    NIL                      NIL    
     R. Bruce Freeman                                                     15,000               Less than 1%
     John Bronson                                                         75,000               Less than 1%
     Paul Brunette                                                         NIL                      NIL    
     Rebecca Harvey                                                        NIL                      NIL    
     Kenneth C. Marino                                                     NIL                      NIL    
     Harley Mintz                                                         70,000               Less than 1%
     Eric D. Sigurdson                                                    10,000               Less than 1%
     David A. Williams                                                   710,000                    9.3%   
                                                                         -------                   -----  
     All executive officers and directors as a group                     880,000                   11.5%   
                                                                         -------                   -----
                                                                         -------                   -----
</TABLE>

B.   OTHER SHAREHOLDINGS EXCEEDING FIVE PERCENT (5%)

<TABLE>
<CAPTION>

                                                                  AMOUNT AND NATURE OF           PERCENT   
     NAME OF BENEFICIAL OWNER                                    BENEFICIAL OWNERSHIP (1)      OF CLASS (2)
     ------------------------                                    ------------------------      ------------
     <S>                                                               <C>                          <C>

     AGF Management Limited                                              526,890                     7%   
     BPI Canadian Opportunities Fund                                     926,890                    12%   
                                                                         -------                    ---
               Total                                                   1,453,780                    19%   
                                                                       ---------                    ---
                                                                       ---------                    ---

     1    Securities beneficially owned include:  securities which the named person has the right to acquire 
          within 60 days as of the date hereof, such as through the exercise of any option, warrant or right;
          securities directly or indirectly held by the named person or by certain members of his family for 
          which the named person has sole or shared voting or investment power. 

     2    Percent of class based on 7,620,730 Common Shares outstanding as of the date hereof.  Common 
          Shares which an individual or group has the right to acquire within 60 days pursuant to the exercise 
          of options are deemed to be outstanding for the purpose of computing the percentage ownership of
          such individual or group, but are not deemed to be outstanding for the purpose of computing the 
          percentage ownership of any other individual or group shown in the table. 

     3    Elliott & Associates, Inc. (which provides the services of J. Douglas Elliott as the Chairman, CEO
          and President of the Company) and R. Bruce Freeman are expected to have the opportunity to derive 
          material benefit from the potential of participation in the Company's Stock Option Plan (see ITEM 11 
          (4) - EXECUTIVE COMPENSATION) and from the Management Services Agreement (see ITEM 13 (1) -
          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS).


</TABLE>

<PAGE>

                                                                         Page 56

ITEM 13 --     CERTAIN RELATIONSHIPS AND RELATED 
               TRANSACTIONS

1.   The Company's Advisory Compensation Committee and Board of Directors 
     agreed to enter into a 5-year Management Services Agreement made between 
     the Company and a private Management Company beneficially owned and 
     controlled by Elliott & Associates, Inc. (which provides the services of 
     J. Douglas Elliott as the Chairman, CEO and President of the Company) 
     and R. Bruce Freeman, the Vice Chairman, CFO and Treasurer of the 
     Company. The Board of Directors and the Advisory Compensation Committee 
     consider that the general terms of the Management Services Agreement, as 
     proposed, provide for an appropriate and complete incentive-based 
     compensation package in terms comparable to normal industry standards, 
     designed to ensure the ongoing care and management of the Company while 
     providing reasonable compensation for the executive officers critical to 
     the turnaround and reorganization of the Company's business and to its 
     future success. The entering into of the Management Services Agreement 
     has been approved by the Company's shareholders. Subject to the final 
     approval of the Advisory Compensation Committee and Board of Directors 
     as to the details of the Management Services Agreement and final 
     regulatory approval, this Agreement includes the following general terms 
     and conditions:

     i.   a term expiring on 31 January 2000;

     ii.  the reimbursement of the Management Company's unpaid historical 
          services provided to the Company together with expenses incurred 
          from 1 September 1994, up to and including 29 February 1996, by the 
          issuance of 200,000 Common Shares of the Company; 

     iii. the payment of an annual management fee to be determined by the 
          Advisory Compensation Committee and approved by the Board of 
          Directors; plus industry standard benefits and the reimbursement of 
          all reasonable out-of-pocket expenses incurred by the Management 
          Company on behalf of the Company; and, 

     iv.  the issuance of up to and including 400,000 post-consolidated 
          Common Shares of the Company at a zero cost base, issuable over the 
          term of the Management Services Agreement upon achieving certain 
          performance thresholds during each of the periods ended 31 January 
          1997, 31 January 1998, 31 January 1999, and 31 January 2000, the 
          particulars of which performance thresholds are to be determined by 
          the Advisory Compensation Committee and the Board of Directors. 

2.   The Company retains Ogilvie & Company, Barristers & Solicitors, of which 
     Michael J. Perkins is a partner, to perform specialty securities work 
     and for corporate organizational matters for which the Company incurred 
     fees of $152,955 in Fiscal 1997.  Mr. Perkins is Corporate Secretary of 
     the Company.


<PAGE>

                                                                         Page 57

                                    PART IV

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

     (a)  1.   INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
               OF POWER PLUS CORPORATION                                     F-1


               Auditors' Report dated 19 June 1997                           F-2


               Consolidated Balance Sheets for the fiscal years ended
                  31 January 1997 and 1996                                   F-3


               Consolidated Statements of Operations for the fiscal 
                  years ended 31 January 1997, 1996 and 1995                 F-4


               Consolidated Statements of Deficit for the fiscal years 
                  ended 31 January 1997, 1996 and 1995                       F-5


               Consolidated Statements of Changes in Financial Position 
                  for the fiscal years ended 31 January 1997, 1996 and 1995  F-6
               
               
               Notes to Consolidated Financial Statements                    F-7

          2.   INDEX OF FINANCIAL STATEMENT SCHEDULES
               None

          3.   EXHIBITS
               The exhibits listed on the accompanying index of exhibits
               are filed as part of this Annual Report on Form 10-K.



     (b)  Reports on Form 8-K

               1.   Form 8K dated 31 October 1996, filed with the Securities and
                    Exchange Commission on 1 November 1996 reporting the 
                    Company's 1-for-20 reverse stock split and the Company's 
                    new trading symbols.


<PAGE>

                                                                         Page 58

     (c)  Index of Exhibits



          EXHIBIT                          DESCRIPTION
                                           -----------
          NUMBER
          ------

            *3.1       Certificate of Incorporation, as amended, of the Company.

           **3.2       By-laws of the Company.

           **4.1       Specimen Common Share Certificate.

           **4.2       Incentive Stock Option Plan.

             4.3       Form of Special Note

         ***16         Letter regarding change in the Company's Auditors from 
                       Price Waterhouse, LLP, of Pittsburgh, Pennsylvania, to
                       BDO Dunwoody, Chartered Accountants, of Toronto, Canada.

            27         Financial Data Schedule (EDGAR purposes only)


______________________________

*    A complete copy of the Company's Articles of Incorporation, as they 
     existed before the amendment filed as an exhibit to this document, were 
     previously filed as an exhibit to the Company's Annual Report on Form 
     20-F with the Securities and Exchange Commission for the fiscal year 
     ended 12 April 1990 and incorporated herein by reference thereto.

**   Previously filed as an exhibit to the Company's Annual Report on Form 
     20-F with the Securities and Exchange Commission for the fiscal year 
     ended 12 April 1990 and incorporated herein by reference thereto.

***  Previously filed as an exhibit to the Company's Form 8-K filed dated 15 
     April 1996 and incorporated herein by reference thereto.


<PAGE>

                                                                         Page 59

                                  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.
                  
                      
                                                          POWER PLUS CORPORATION



     Date:  7 August 1997                            By:  /s/ J. Douglas Elliott
                                                         -----------------------
                                                            J Douglas Elliott
                                                         Chief Executive Officer





Pursuant to the requirements of the SECURITIES EXCHANGE ACT OF 1934, this 
Report has been signed below by the following persons on behalf of the 
registrant and in the capacities indicated as of the 7th day of August 1997.





                                                     /s/  J. Douglas Elliott
                                               ---------------------------------
                                                         J Douglas Elliott
                                                     Chairman, CEO and President
                                                   (Principal Executive Officer)






                                                     /s/  R. Bruce Freeman
                                               ---------------------------------
                                                        R Bruce Freeman
                                                      Vice Chairman, CFO
                                             (Principal Financial and Accounting
                                                           Officer)






                                                      /s/  Eric D. Sigurdson
                                               ---------------------------------
                                                         Eric D.Sigurdson


<PAGE>

                                                                    Page F - 1


           INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS


Auditors' Report dated 19 June 1997                               F-2

Consolidated Balance Sheets for the fiscal years ended
    31 January 1997 and 1996                                      F-3

Consolidated Statements of Operations for the fiscal years 
    ended 31 January 1997, 1996 and 1995                          F-4

Consolidated Statements of Deficit for the fiscal years 
    ended 31 January 1997, 1996 and 1995                          F-5

Consolidated Statements of Changes in Financial Position 
    for the fiscal years ended 31 January 1997, 1996 
    and 1995                                                      F-6

Notes to Consolidated Financial Statements                        F-7

<PAGE>

                                                                    Page F - 2


                MANAGEMENT'S STATEMENT OF RESPONSIBILITY

The management of Power Plus Corporation is responsible for the preparation 
of the accompanying financial statements and the preparation and presentation 
of all information in the Annual Report.  The consolidated financial 
statements have been prepared in accordance with accounting principles 
generally accepted in Canada and are considered by management to present 
fairly the financial position and operating results of the Company.

The Company maintains various systems of internal control to provide 
reasonable assurance that transactions are appropriately authorized and 
recorded, that assets are safeguarded, and that financial records are 
properly maintained to provide accurate and reliable financial statements.

The Company's audit committee meets periodically with the Company's 
management and independent auditors to review financial reporting matters and 
internal controls and to review the consolidated financial statements and the 
independent auditors' report. The audit committee reported its findings to 
the Board of Directors who have approved the consolidated financial 
statements.

The Company's independent auditors, BDO Dunwoody, Chartered Accountants, have 
examined the financial statements and their report follows.

          J. Douglas Elliott                       R. Bruce Freeman
       Chairman, CEO & President            Vice Chairman, CFO & Treasurer

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

                                AUDITORS' REPORT

TO THE BOARD OF DIRECTORS OF POWER PLUS CORPORATION:

We have audited the consolidated balance sheet of Power Plus Corporation as 
at 31 January 1997 and 1996 and the consolidated statements of operations, 
deficit and changes in the financial position for the years then ended. These 
consolidated 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 audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform an audit to 
obtain reasonable assurance 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.

In our opinion, these consolidated financial statements present fairly, in 
all material respects, the financial position of the Company as at 31 January 
1997 and 1996 and the results of its operations and the changes in its 
financial position for the years then ended in accordance with generally 
accepted accounting principles.

The consolidated financial statements as at 31 January 1995 and for the 
period then ended were audited by other auditors who expressed an opinion 
without reservation thereon in their report dated 16 June 1996.
                           ___________________________
                                  BDO Dunwoody
                              Chartered Accountants
                                 Toronto, Canada

                                  19 June 1997

<PAGE>

                                                                    Page F - 3


                              POWER PLUS CORPORATION
                           CONSOLIDATED BALANCE SHEETs
                                as at 31 January 
                  ($-AMOUNTS ARE EXPRESSED IN CANADIAN DOLLARS)

                                                     1997             1996
                                                     ----             ----
                     ASSETS

 Current assets:
    Cash and cash equivalents                     $4,341,243          $1,288
    Accounts receivable                              202,319          64,001
    Inventory                                      1,809,529               0
    Prepaid expenses                                 395,849          19,760
                                                     -------          ------
                                                   6,748,940          85,049
 Capital assets, net - SEE NOTE 5                  2,652,157               0
 Deferred charges, net - SEE NOTE 6                  705,120         244,986
 Other assets, net - SEE NOTE 6                      937,637               0
                                                     -------               -

                                                 $11,043,854        $330,035
                                                 -----------        --------
                                                 -----------        --------


                  LIABILITIES

 Current liabilities:
    Accounts payable and accrued liabilities      $2,715,813        $507,208

 Special Notes - SEE NOTE 7                        4,740,000               0
                                                   ---------               -
                                                   7,455,813         507,208
                                                   ---------         -------


      SHAREHOLDERS' EQUITY / (DEFICIENCY)

Share capital - SEE NOTE 8
  Authorized at no par value:
     An unlimited number of common shares
     An unlimited number of preferred shares
  Issued: 4,508,562 common shares 
   (1996 - 39,192,975 PRE-CONSOLIDATION 
   COMMON SHARES)                                  7,398,300      26,016,484
Convertible component of Special Notes 
 - SEE NOTE 7                                      1,400,000                 
Deficit - SEE NOTE 8                              (5,210,259)    (26,193,657)
                                                  -----------    ------------
                                                   3,588,041        (177,173)
                                                   ---------        ---------
                                                 $11,043,854        $330,035
                                                 -----------        --------
                                                 -----------        --------

<PAGE>

                                                                    Page F - 4

                              POWER PLUS CORPORATION
                        Consolidated Statements of Operations
                           31 January 1997, 1996 and 1995
                    ($-AMOUNTS ARE EXPRESSED IN CANADIAN DOLLARS)

<TABLE>
<CAPTION>
                                       1997              1996                  1995
                                       ----              ----                  ----

                                              - SEE NOTES  2 & 4    - SEE NOTES  2 & 4
<S>                                 <C>               <C>                   <C>
SALES                               $4,080,598        $5,375,229            $8,547,973
Cost of sales                        2,389,115         2,268,678             4,199,471
                                     ---------         ---------             ---------
    Gross profit                     1,691,483         3,106,551             4,348,502
                                     ---------         ---------             ---------
EXPENSES
  Operating and administration       7,105,723         7,229,637             5,637,840
  Amortization                         273,187           299,698               200,078
                                       -------           -------               -------
LOSS FROM OPERATIONS                 5,687,427         4,422,784             1,489,416
Loss from abandonment of Former
 Subsidiaries                                0           118,767                     0
                                             -           -------                     -

    NET LOSS FOR PERIOD             $5,687,427        $4,541,551            $1,489,416
                                    ----------        ----------            ----------
                                    ----------        ----------            ----------

LOSS PER SHARE - SEE NOTE 8
NET LOSS PER SHARE                       $2.54             $2.50                 $0.94
WEIGHTED AVERAGE NUMBER OF COMMON 
 SHARES OUTSTANDING                  2,238,281         1,814,534             1,590,307
(RESTATED ON A POST-CONSOLIDATION 
 BASIS FOR 1996 AND 1995)

</TABLE>

<PAGE>

                                                                    Page F - 5

                            POWER PLUS CORPORATION
                       Consolidated Statements of Deficit
                         31 January 1997, 1996 and 1995
                  ($-AMOUNTS ARE EXPRESSED IN CANADIAN DOLLARS)

<TABLE>
<CAPTION>
                                            1997              1996                1995
                                            ----              ----                ----
                                                     - SEE NOTES 2 & 4   - SEE NOTES 2 & 4
<S>                                     <C>                <C>                 <C>
Deficit, beginning of period            $26,193,657        $21,652,106         $20,162,690
Net loss for period                       5,687,427          4,541,551           1,489,416
Less:  Stated capital reduction  
 - SEE NOTE 8                            26,670,825                  0                   0
                                         ----------                  -                   -

  Deficit, end of period                 $5,210,259        $26,193,657         $21,652,106
                                         ----------         ----------          ----------
                                         ----------         ----------          ----------
</TABLE>

<PAGE>

                                                                    Page F - 6

                             POWER PLUS CORPORATION
            Consolidated Statements of Changes in Financial Position
                         31 January 1997, 1996 and 1995
                  ($-AMOUNTS ARE EXPRESSED IN CANADIAN DOLLARS)

<TABLE>
<CAPTION>
                                                 1997            1996              1995
                                                 ----            ----              ----
                                                      - SEE NOTES  2 & 4   - SEE NOTES  2 & 4
<S>                                          <C>             <C>              <C>
CASH PROVIDED BY (USED IN) OPERATING 
 ACTIVITIES
  Loss for period                            $(5,687,427)    $(4,541,551)     $(1,489,416)
  Items not affecting cash
    Loss on abandonment of Former 
     Subsidiaries                                      0         118,767
    Amortization                                 273,187         299,698          200,078
                                                 -------         -------          -------
                                              (5,414,240)     (4,123,086)      (1,289,338)
  Changes in non cash operating items
    Accounts receivable                         (138,318)         92,089         (126,329)
    Inventory                                 (1,809,529)      2,086,443         (237,347)
    Prepaid expenses                            (376,089)        171,721          (75,396)
    Accounts payable and accrued liabilities   2,208,605      (1,600,936)         142,832 
    On abandonment of Former Subsidiaries              0       1,964,066                0
                                                       -       ---------                -
                                              (5,529,571)     (1,409,703)      (1,585,578)
                                              -----------     -----------      -----------
CASH PROVIDED BY (USED IN) FINANCING 
 ACTIVITIES
  Issue of common shares and warrants          8,052,641       1,334,100        1,795,402
  Notes payable                                        0         (44,257)          (5,743)
  Special Notes - SEE NOTE 7                   6,000,000               0                0
                                               ---------               -                -
                                              14,052,641       1,289,843        1,789,659
                                              ----------       ---------        ---------
CASH PROVIDED BY (USED IN) INVESTING 
 ACTIVITIES
  Purchase of capital assets - SEE NOTE 3     (2,671,310)              0          (19,889)
  Deferred charges                              (550,573)       (209,106)         (35,780)
  Purchase of other assets - SEE NOTE 3         (961,232)              0                0
                                                ---------              -                -
                                              (4,183,115)       (209,106)         (55,669)
                                              -----------       ---------         --------
Increase (decrease) in cash during period      4,339,955        (328,966)         148,412
Cash, beginning of period                          1,288         330,254          181,842
                                                   -----         -------          -------
CASH, END OF PERIOD                           $4,341,243          $1,288         $330,254
                                              ----------          ------         --------
                                              ----------          ------         --------

</TABLE>

<PAGE>

                                                                    Page F - 7

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. NATURE OF BUSINESS

   Power Plus Corporation is building a specialty chain of niche retail 
   stores throughout North America.  Power Plus Corporation, through its 
   wholly-owned subsidiaries Power Plus USA, Inc. and Power Plus Canada, 
   Inc., (collectively, "Power Plus" or the "Company"), operated 51 retail 
   stores at the conclusion of the fiscal year ended 31 January 1997 ("Fiscal 
   1997") under the trade name POWERFUL STUFF!  The majority of these stores 
   were opened in the last four months of Fiscal 1997.  The stores, operating 
   from leased premises in major enclosed shopping malls in the US and Canada 
   and ranging from 150 to 700 square feet (averaging approximately 300 
   square feet), sell wireless communication products and services (beepers, 
   cellular phones, personal communication systems and related service 
   contracts), and hand-held electronic communications, entertainment, 
   business and lifestyle products. 

   The Company has not yet reached the 125 store level at which point 
   management estimates it will attain profitable operations.  Both long-term 
   debt and new equity capital will be necessary to fund future expansion and 
   the operating losses incurred during its growth phase. The Company's 
   Reorganization Plan, and related Financing Plan, approved by both 
   shareholders and regulators in July 1996, and the Plan of Arrangement 
   approved by the Court, contemplates this reality and provides the 
   structure to accommodate these requirements.  As at the end of Fiscal 
   1997, the Company had received both the equity capital and long-term debt 
   amounts called for in the plan, although the timing of the receipts was in 
   arrears of that projected. Management anticipates reaching critical mass 
   by the end of calendar 1997.

2. SIGNIFICANT ACCOUNTING POLICIES

   a.) BASIS OF PRESENTATION

       Power Plus Corporation was incorporated on 15 December 1986 under the 
       BUSINESS CORPORATIONS ACT, ALBERTA.  Power Plus Canada, Inc. was 
       incorporated on 21 July 1988 and was acquired on 13 January 1989, 
       although it remained inactive until July 1996 when it became the 
       entity operating the Canadian chain of retail stores.  Power Plus USA, 
       Inc. was incorporated on 27 February 1996 and is the entity operating 
       the US chain of retail stores.  Effective 1 September 1996, Power Plus 
       USA, Inc. acquired certain business assets, including lease 
       entitlements, from Consumer Electronics Specialty Stores, Inc. 
       ("CESS"), a privately-owned Florida-based retail chain and wireless 
       reseller.  SEE ALSO NOTE 3.

       In addition, Power Plus Corporation also owns two other subsidiaries: 
       First Olympia Holdings, Inc. and 554618 Alberta, Inc., the latter 
       being inactive.

       These consolidated financial statements are prepared in accordance 
       with generally accepted accounting principles in Canada and are 
       expressed in Canadian dollars.  

<PAGE>

                                                                    Page F - 8

   b.) PRINCIPLES OF CONSOLIDATION

       The consolidated financial statements for Fiscal 1997 include the 
       accounts of Power Plus Corporation, Power Plus Canada, Inc., Power 
       Plus USA, Inc. and First Olympia Holdings, Inc.

       During the year ended 31 January 1996 ("Fiscal 1996") and the 9-month 
       period ended 31 January 1995, Power Plus Corporation (then named 
       Battery One, Inc.) conducted all of its business through its then 
       wholly-owned subsidiaries, Battery One-Stop International Inc. 
       ("BOSI") and Batteries Etc., Inc. ("Etc."), (collectively, the "Former 
       Subsidiaries").  During Fiscal 1996 the Former Subsidiaries were 
       assigned into bankruptcy, management ceased to control their affairs 
       and they were abandoned. Accordingly, the Company's net investment in 
       BOSI and Etc. was written off and it ceased to consolidate their 
       accounts and operating results on 14 December 1995 and on 8 December 
       1995, respectively. The comparative consolidated financial statements 
       include the accounts of the Battery One, Inc., BOSI and Etc.  SEE ALSO 
       NOTE 4.  

       All significant intercompany accounts and transactions between the 
       Company and its subsidiaries have been eliminated. 

   c.) INVENTORY

       Inventory consists entirely of finished goods held for resale and is 
       carried at the lower of cost or estimated net realizable value.  Cost 
       was determined using the first-in, first-out inventory valuation 
       method.

   d.) PREPAID EXPENSES

       Prepaid expenses consist of amounts paid before the accounting period 
       when such amounts will become expenses and matched to the results of 
       the expenditure. Such amounts include utility, rent and construction 
       deposits.

   e.) FOREIGN CURRENCY TRANSLATION

       Operations of the Company's US subsidiary are considered to be 
       integrated with the Company and accordingly it accounts for the 
       translation of foreign currency transactions and related financial 
       statement items using the temporal method. Under this method, monetary 
       items are translated at the rate of exchange in effect at the balance 
       sheet date, non-monetary items are translated at historical exchange 
       rates, and revenue and expense items are translated at average rates 
       of exchange for the period in which they occur.  Exchange gains and 
       losses are included in the determination of net income. 

   f.) CAPITAL ASSETS

       Capital assets are recorded at cost.  The provision for amortization 
       is calculated on a straight-line basis on the original cost over the 
       following estimated useful lives:

                   Leasehold improvements                       10 years
                   Store furniture and fixtures and kiosks      5 years
                   Office and warehouse equipment               5 years
                   Computer software and hardware               5 years
                   Store design and set-up costs                3 years

       Costs capitalized for new stores and kiosks include all design, 
       delivery, installation and construction costs.

<PAGE>

                                                                    Page F - 9

   g.) DEFERRED CHARGES

       Deferred charges are recorded at cost.  These costs include patent and 
       trademark filing costs, intellectual properties, cost of raising 
       capital and such other costs that are properly deferred to be matched 
       against the result of the expenditure. The long-term amounts are 
       subject to amortization where the short-term amounts are expensed in 
       the period when the event is completed.  The provision for 
       amortization is calculated on a straight-line basis on the original 
       cost over the following four years.  Costs of raising capital are 
       deferred until such time as the related transactions are completed and 
       the cost of issuing the Special Notes is amortized over the life of 
       the Special Notes.

       The provision for amortization is calculated on a straight-line basis 
       on the original cost over the following estimated useful lives:

           Trade marks, trade names, intellectual 
             properties                                  10 years
           Customer list                                 10 years
           Deferred cost of raising equity capital       until transaction 
                                                           completed
           Costs for issuing Special Notes               over five-year life of 
                                                           Special Notes

   h.) FINANCIAL INSTRUMENTS

       The Company's financial instruments consist of cash and cash 
       equivalents, accounts receivable, accounts payable and accrued 
       liabilities and special notes. Approximately $35,000 of financial 
       assets and $1,672,000 of financial liabilities are denominated in 
       United States Dollars and the Company is exposed to currency risk 
       accordingly.  It is management's opinion that the Company is not 
       exposed to interest rate or credit risks arising from these financial 
       instruments.  The fair values of these financial instruments 
       approximate their carrying values, unless otherwise noted.

   i.) ACCOUNTING ESTIMATES

       The preparation of financial statements in conformity with generally 
       accepted accounting principles requires management to make estimates 
       and assumptions that affect the reported amounts of assets and 
       liabilities at the date of the financial statements and the reported 
       amounts of revenues and expenses during the reporting period.  Actual 
       results could differ from those estimated.

3. PURCHASE OF CERTAIN BUSINESS ASSETS

   On 1 October 1996, Power Plus USA, Inc. completed the purchase of certain 
   assets, lease entitlements and the business called PORTRONICS, from CESS. 
   The acquisition, which was effective 1 September 1996, included 13 leased 
   retail locations in Florida, inventories, two rented warehouse/retail 
   facilities and pager repair facilities, one office location and CESS's 
   proprietary interests. 

<TABLE>
<CAPTION>

<S>                               <C>          <S>                                      <C>
Assets acquired were:                          Consideration therefor was:
    Merchandise inventory           $341,566       Cash, on closing                       $599,189
    Furniture, fixtures & equipment  205,500       Current liabilities assumed             119,178
    Customer list                    685,000       Amount paid subsequent to Fiscal 1997   513,699
                                     -------                                               -------
                                  $1,232,066                                            $1,232,066
                                  ----------                                            ----------
                                  ----------                                            ----------

</TABLE>

<PAGE>

                                                                   Page F - 10

4. CESSATION OF CONTROL OF THE FORMER SUBSIDIARIES

   In December 1995, BOSI made a voluntary assignment into bankruptcy 
   pursuant to the CANADIAN BANKRUPTCY AND INSOLVENCY ACT.  Also in December 
   1995, Etc. made a voluntary petition seeking protection under Chapter 11 
   of the US BANKRUPTCY CODE, which in January 1996, was converted to a 
   Chapter 7 filing.  The Company was the largest creditor of the Former 
   Subsidiaries.

   The Company is not directly nor indirectly liable for any debt or 
   liability of the Former Subsidiaries and has no outstanding guarantees or 
   undertakings with respect to any claim against the Former Subsidiaries.  

5. CAPITAL ASSETS
                                                 31 JANUARY 1997
                                           ---------------------------------
                                                     ACCUMULATED
                                             COST    AMORTIZATION      NET
                                             ----    ------------      ---
    Store furniture and fixtures 
      and kiosks                            $381,112         $0      $381,112
    Leasehold improvements                   771,794          0       771,794
    Office and warehouse equipment           350,104     19,153       330,951
    Computer software and hardware         1,029,633          0     1,029,633
    Store design and set-up costs            138,667          0       138,667
                                             -------          -       -------
                                          $2,671,310    $19,153    $2,652,157
                                          ----------    -------    ----------
                                          ----------    -------    ----------

   The majority of stores were opened in the last four months of Fiscal 1997 
   and because of the limited time these assets were deployed in the year, 
   the Company did not amortize its capital investment.

   The Company did not own any Capital Assets as at the end of Fiscal 1996. 

<PAGE>

                                                                   Page F - 11

6. DEFERRED CHARGES AND OTHER ASSETS

   Deferred charges consist of the deferred cost of raising capital for the 
   Company, where the transaction is still pending, costs including fees paid 
   to the Company's fiscal agent for raising the funding for the Special 
   Notes, and certain restructuring and reorganizing costs.   

                                                      31 JANUARY 1996
                                        ------------------------------------
                                                       ACCUMULATED
                                              COST     AMORTIZATION      NET
                                              ----     ------------      ---
         Deferred issuing cost of 
           capital and long-term debt        $256,946     $11,960      $244,986
                                             --------     -------      --------
                                             --------     -------      --------


                                                 31 JANUARY 1997
                                         -----------------------------------
                                                     ACCUMULATED
                                            COST     AMORTIZATION    NET
                                        ----------   ------------  ---------
       Trade marks, trade names 
         and intellectual properties      $276,232      $23,595     $252,637
       Customer list                       685,000            0      685,000
                                           -------            -      -------
       Other assets                        961,232       23,595      937,637
       Deferred issuing cost of 
         capital and long-term debt        795,560       90,440      705,120
                                           -------       ------      -------
                                        $1,756,792     $114,035   $1,642,757
                                        ----------     --------   ----------
                                        ----------     --------   ----------

   Included in deferred charges in Fiscal 1996 are amounts pertaining to the 
   cost of raising capital for the Company, which transactions closed in 
   March 1996.

   The deferred issuing cost of capital is charged to the cost of issuing 
   shares when issued.  The deferred issuing costs of long-term debt are 
   amortized as financing charges over the term of the debt.  

   The Company did not amortize the customer list during Fiscal 1997 because 
   of the limited time between its acquisition and the year end.

7. SPECIAL NOTES

   The Company completed a $6 million Special Notes 5-year 10% convertible 
   fixed and floating charge debentures private placement debt financing 
   during Fiscal 1997, in accordance with the Financing Plan.  The Special 
   Notes are convertible, in whole or in part, into Common Shares of the 
   Company at any time, at $2.50 per share, representing potential future 
   dilution of up to 2.4 million Common Shares, and are secured by all the 
   assets of Power Plus Corporation.

   At any time on or after the third anniversary date from their date of 
   issue, the Company has the right, upon reasonable notice, to compel 
   holders of the Special Notes to convert all or any part of the 
   indebtedness into Common Shares for $2.50 per share, on the condition that 
   the shares have traded at a weighted average price of $4.00 per share or 
   greater during the preceding 10 trading days. Failing conversion by 
   holders of the Special Notes in the circumstances of such notice, the 
   Company has the right to repay the whole or any part of the Special Notes, 
   on a PRO RATA basis.  

<PAGE>

                                                                   Page F - 12

   Interest is payable on the Special Notes semi annually, on the 31st day of 
   January and July.  Interest paid on the Special Notes during Fiscal 1997 
   was $251,100.

   In the opinion of management, the convertible feature of the Special Notes 
   had an assignable fair value of $1,400,000 at the date of issuance, which 
   amount has been classified as a component of shareholders' equity.  
   Correspondingly, the liability component of the Special Notes had an 
   assignable fair value of $4,600,000 at the date of issuance and the 
   difference between this amount and their face value is being amortized on 
   a straight-line basis over their term.  For Fiscal 1997, this 
   amortization amounted to $140,000.

8. SHARE CAPITAL  

   The Company arranges the private placement of warrant financings from time 
   to time and records the proceeds as equity upon the receipt thereof.  As 
   and when the warrants are exchanged for Common Shares, the Company records 
   the issuance of shares.  During Fiscal 1997, the Company reorganized its 
   share capital and raised new equity, in accordance with the Financing Plan 
   and Plan of Arrangement, as follows:

   a.) Effective 1 November 1996, the Company's 44,765,613 issued and 
       outstanding common shares were reorganized on the basis of a 20 for 1 
       consolidation.  Each 20 pre-consolidation shares were exchanged for 1 
       post-consolidation share and 1 exchange right ("Exchange Right").  
       Each Exchange Right entitled the holder to purchase for $2.00 one 
       exchange right unit consisting of 1 Common Share and 1 Class A 
       Warrant. Each Class A Warrant entitles the holder to purchase prior to 
       30 September 1997, 1 Common Share for $2.00 and receive 1 Class AA 
       Warrant.  Each Class AA Warrant, in turn, entitles the holder to 
       purchase prior to 1 March 1998, 1 Common Share for $2.50.  By the end 
       of Fiscal 1997, 2,238,281 Exchange Rights had been exchanged for an 
       equal number of Common Shares and Class A Warrants.  In addition, 
       30,525 Class A and 1,475 Class AA Warrants were exercised.

   b.) The Company reduced both the stated capital amount for Common Shares 
       and the accumulated deficit by $26,670,825 in order to better present 
       its financial repositioning.

   c.) During Fiscal 1997, the Company completed a Special Warrant private 
       placement equity financing comprised of 2.25 million Special Warrants 
       (originally 45 million Special Warrants pre-consolidation) for $4.5 
       million.  Of this amount, $1.1 million was received in the Quarter 3 
       of Fiscal 1996. Each Special Warrant entitled the holder to receive 1 
       Common Share and 1 Class B Warrant.  Each Class B Warrant entitles the 
       holder to purchase, prior to 30 September 1997, 1 Common Share for 
       $2.00 and receive 1 Class BB Warrant which, in turn, entitles the 
       holder to purchase, prior to 1 March 1998, 1 Common Share for $2.50.  
       None of the Class B Warrants and Class BB Warrants were exercised by 
       Fiscal 1997 year end.

       As the Special Warrants were not qualified for trading prior to 26 
       July 1996, the Company was obliged to issue for no consideration 1 
       Penalty Special Warrant, having the same rights and entitlements, for 
       every 10 Special Warrants.  This resulted in the issuance of 225,000 
       Penalty Special Warrants.  All Special Warrants are convertible into 
       common shares, for no additional consideration, one year after their 
       date of their issue. 

<PAGE>

                                                                   Page F - 13

   d.) The following table sets out the changes to the stated capital and 
       Common Shares. 

                                                   SHARES           DOLLARS
                                                 ----------       -----------
         31 JANUARY 1995 BALANCE                 33,914,521       $24,682,384
                                                 ----------       -----------
         Shares issued for cash                     780,000          $244,100
         Warrants exchanged for shares            4,498,454                  
         Advances in consideration of 
          Special Warrant issue                                     1,100,000
         Cost of issuing                                              (10,000)
                                                 ----------       -----------

         31 JANUARY 1996 BALANCE                 39,192,975       $26,016,484
                                                 ----------       -----------

         PRE-CONSOLIDATION
         Shares issued for payment in kind          900,000                  
         Warrants issued for cash                                   3,773,125
         Warrants exchanged for shares            4,672,638
                                                  ---------
            Total pre-consolidation 
             old shares outstanding              44,765,613                  
                                                 ----------
                                                 ----------

         STOCK CONSOLIDATION AT 20:1 RATIO        2,238,281                  
         POST-CONSOLIDATION
         Exchange rights exercised for shares     2,238,281         4,476,561
         Warrants issued for cash and 
          exchanged for shares                       32,000            80,738
         Cost of issuing                                             (277,783)
         STATED CAPITAL REDUCTION                                 (26,670,825)
                                                 ----------       ------------

         31 JANUARY 1997 BALANCE                  4,508,562        $7,398,300
                                                  ---------        ----------
                                                  ---------        ----------

<PAGE>

                                                                   Page F - 14

   e.) The following table summarizes the steps both completed and 
       contemplated by the Financing Plan.

<TABLE>
<CAPTION>

              $-AMOUNTS ARE EXPRESSED INMILLIONS; ASSUMING MAXIMUM DILUTION)                          SHARES     CAPITAL    TIMING
                                                                                                      ------     -------    ------
        <S>       <C>                                                                             <C>             <C>   <C>
        i.        CURRENT SHARE CAPITALIZATION (from 44,765,613 shares on 20:1 basis):
            a.)   POST-CONSOLIDATION common shares and equal number of Exchange Rights Units        2,238,281      $0.0  completed
                                                                                                                         Nov. 1996
            b.)   POTENTIAL DILUTION AND CAPITAL DERIVED FROM EXCHANGE RIGHT UNITS:
                  i)   One Exchange Rights Unit to receive one common share at $2.00 and  one       2,238,281      $4.5  completed
                       Class A Warrant                                                                                   Jan. 1997
                  ii)  One Class A Warrant to purchase one common share at $2.00 and receive one    2,238,281      $4.5  estimated
                       Class AA Warrant                                                                                  Sep. 1997
                        (note: 30,525 Class A Warrants were exercised prior to Fiscal 1997 year 
                         end.)
                  iii) One Class AA Warrant to purchase one common share at $2.50                   2,238,281      $5.6  estimated
                        (note: 1,475 Class AA Warrants were exercised prior to Fiscal 1997 year                          Mar. 1998
                         end.)
                  iv)  Agent's Option to purchase up to 225,000 common shares at $2.00 and            225,000      $0.4  completed
                       receive the equivalent number of Agent's Option Class A Warrants                                  Dec. 1996
                  v)   Agent's Option Class A Warrants to purchase up to 225,000 common shares at     225,000      $0.4  estimated
                       $2.00 and receive the equivalent number of Agent's Option Class AA Warrants                       Sep. 1997
                  vi)  Agent's Option Class AA Warrants to purchase up to 225,000 common shares       225,000      $0.6  estimated
                       at $2.50                                                                                          Mar. 1998

        ii.       SPECIAL WARRANT PRIVATE PLACEMENT FINANCING:
            a.)   Special Warrants at $2.00, exchanged during first quarter of  Fiscal 1998, for    2,225,000      $4.5  completed
                  common shares and an equal number of Class B Warrants                                                  Mar. 1996
            b.)   One Class B Warrant to purchase one common share at $2.00 and receive one         2,225,000      $4.5  estimated
                  Class BB Warrant                                                                                       Sep. 1997
            c.)   One Class BB Warrant to purchase one common share at $2.50                        2,225,000      $4.6  estimated
                                                                                                                         Mar. 1998
            d.)   Penalty Special Warrants  to receive 225,000 common shares at  no cost and          225,000      $0.0  completed
                  255,000 Class B Penalty Warrants                                                                       Jan. 1997
            e.)   Class B Penalty Warrants to purchase up to 225,000 common shares at $2.00 and       225,000      $0.5  estimated
                  receive the equal number of  Class BB Penalty Warrants                                                 Sep. 1997
            f.)   Class BB Penalty Warrants to purchase up to 225,000 common shares at $2.50          225,000      $0.6  estimated
                                                                                                                         Mar. 1998

       iii        SPECIAL NOTES:  CONVERTIBLE INTO COMMON SHARES AT $2.50 PER SHARE

            a.)   $6 million - first tranche                                                        2,400,000      $6.0  completed
                                                                                                                         Sep. 1996
            b.)   $5 million - second tranche                                                       2,000,000      $5.0  estimated
                                                                                                                         Aug. 1997

       iv         1997 SPECIAL WARRANT PRIVATE PLACEMENT FINANCING

            a.)   Special Warrants purchase warrants for $1.75 to purchase common shares            1,714,285      $3.0  estimated
                                                                                                                         Aug. 1997
            b.)   Special Warrants purchase warrants to purchase common shares for $2.00            1,714,285      $3.4  estimated
                                                                                                    ---------      ----  Aug. 1998
       v          NUMBER OF SHARES, FULLY DILUTED (1)                                              24,881,694
                                                                                                   ----------
       vi         CAPITAL AVAILABLE                                                                ----------      $49.1
                  LESS amounts already received:
                               during Fiscal 1997                                                                  $14.3
                               during Fiscal 1996                                                                   $1.1
                                                                                                                    ----
       vii        POTENTIAL CAPITAL remaining available from maximum dilution of existing                          $33.7
                  financing instruments outstanding.                                                               -----
                                                                                                                   -----
                  (1) Excludes amount of allowable management incentive options. There are no such options issued.

</TABLE>

<PAGE>

                                                                   Page F - 15

   On 29 July 1994, 3,000,000 share purchase warrants were exercised and the 
   Company issued 3,000,000 pre-consolidation common shares for cash proceeds 
   of $660,000. In addition, on 29 July 1994, the Company completed a private 
   placement financing of special warrants whereby it issued 6,363,636 
   special warrants at $0.22 each for cash proceeds of $1,400,000.  Each 
   special warrant entitled the holder to convert the special warrant into 
   one pre-consolidation common share and one-half of one regular warrant.  
   One regular warrant entitled the holder to purchase one share of 
   pre-consolidation common share at $1.00 per share.  During Fiscal 1996, 
   4,498,454 special warrants were exchanged and during the 9- month period 
   ended 31 January 1995, 1,297,000 special warrants were exchanged for 
   pre-consolidation common shares. The remaining 568,182 special warrants 
   were exchanged in February 1996.

   The Company has neither issued nor had any stock options outstanding for 
   the past two years. 

9. INCOME TAXES

   During the year ended 31 January 1997 the Company incurred losses 
   aggregating $3,455,000 for Canadian Income Tax purposes, which expire in 
   2004, and losses of $2,092,000 for United States Income Tax purposes.

   In addition, the Company had incurred losses as of 31 January 1996 of 
   $14,982,000 (1995 - $10,900,000) as a result of the bankruptcy of the 
   Former Subsidiaries during Fiscal 1996, the bankruptcy of a subsidiary 
   during Fiscal 1992 and business losses from operations.  These losses have 
   not been recognized for accounting purposes.  The loss carry-forwards 
   expire from 1998 to 2003 fiscal years although the ultimate extent to 
   which these losses may be applied against Canadian source earnings from 
   operations is yet to be determined. Losses from the operations of Former 
   Subsidiaries have been excluded from the foregoing. SEE ALSO NOTE 4.

10.CONTRACTUAL COMMITMENTS

   The Company is committed to minimum annual lease payments under operating 
   commercial leases, under terms and conditions typical for retail space, 
   for store locations with initial terms in excess of one year, as follows:

                     Fiscal Year
                     -----------
                         1998         $1,960,609
                         1999          1,815,120
                         2000          1,668,157
                         2001          1,389,474
                         2002          2,074,868
                                       ---------
                                      $8,908,228
                                      ----------
                                      ----------

<PAGE>

                                                                   Page F - 16

11.SEGMENTED INFORMATION

   The extent of the Company's operations in Canada and the United States for 
   the years ended 31 January 1997 and 1996, and the 9 months ended 31 
   January 1995, was as follows:

                                     CANADA     UNITED STATES        TOTAL
                                     ------     -------------        -----
                                                     1997
                                                     ----
             Sales                   $503,429     $3,577,169       $4,080,598
             Net loss              $3,595,000     $2,092,427       $5,687,427
             Total assets          $7,422,843     $3,621,011      $11,043,854

                                                     1996
                                                     ----
             Sales                 $1,749,393     $3,625,836       $5,375,229
             Net loss              $1,076,324     $3,465,227       $4,541,551
             Total assets            $330,035         --             $330,035

                                                     1995
                                                     ----
             Sales                 $2,414,991     $6,132,982       $8,547,973
             Net loss                $498,134       $991,282       $1,489,416
             Total assets          $1,505,984     $3,676,695       $5,182,679


12.US GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

   These consolidated financial statements have been prepared in accordance 
   with accounting principles generally accepted in Canada.  Except as set 
   out below, these financial statements also comply, in all material 
   respects, with accounting principles generally accepted in the United 
   States and the accounting rules and regulations of the Securities and 
   Exchange Commission.

   a.) INCOME TAXES

       In the United States, under the Financial Accounting Standards Board 
       SFAS 109, Accounting for Income Taxes, the Company would have used the 
       asset and liability method of accounting for income taxes, instead of 
       the deferral method.  Under the asset and liability method, deferred 
       tax assets and liabilities are recognized for the future tax 
       consequence attributable to temporary differences between the carrying 
       values of existing assets and liabilities and their respective tax 
       bases.  Deferred tax assets and liabilities are measured using enacted 
       tax rates expected to apply to taxable income in the years in which 
       those temporary differences are expected to be recovered or settled.

       Under SFAS 109, the Company would  have tax assets as a result of 
       losses carried forward but would have chosen to provide an allowance 
       against these of 100 percent.  Accordingly, its adoption would not 
       have had a material effect on the financial position or results of 
       operations of the Company.

<PAGE>

                                                                   Page F - 17

   b.) FOREIGN CURRENCY TRANSLATION

       The Company accounts for the translation of its US subsidiaries 
       financial statements using the temporal method, as discussed in Note 
       2.  In the United States under SFAS 52, all assets and liabilities 
       would be translated at the rate of exchange in effect at the balance 
       sheet date and the translation adjustments arising would be reflected 
       as a separate component of shareholders equity on the balance sheet.

       The adoption of SFAS 52 would have had no material effect on the 
       financial position or results of operations of the Company.

   c.) LONG-LIVED ASSETS

       In the United States, under SFAS 121, the Company would be required to 
       review its long-lived assets and certain identifiable intangibles for 
       impairment whenever events or changes in circumstances indicate that 
       the carrying value may not be recoverable, and, if deemed impaired, 
       measure and record an impairment loss based on the fair value of the 
       assets.

       The adoption of SFAS 121 would have had no material effect on the 
       financial position or results of operations of the Company.