SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
(Mark One)

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

                  For the fiscal year ended September 30, 1996

                                       OR

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

             For the transition period from __________ to __________

                         Commission File Number O-26676

                     MULTIMEDIA CONCEPTS INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

Delaware                                    13-3835325
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
Incorporation or organization)

                              448 West 16th Street
                            New York, New York 10011
               (Address of principal executive offices) (Zip Code)

                                 (212) 675-6666
              (Registrant's telephone number, including area code)

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

Title of each class                Name of each exchange on which registered
                                      NONE

Securities   registered  pursuant  to  Section
12(g) of the Act:
                          Common Stock, $.001 par value
                                (Title of Class)

                         Common Stock Purchase Warrants
                                (Title of Class)

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






<PAGE>



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

The  Registrant's  revenues  for its fiscal year ended  September  30, 1996 were
$5,727,320.

The aggregate  market value of the voting stock on February 5, 1997  (consisting
of  Common  Stock,  par  value  $.01  per  share)  held  by  non-affiliates  was
approximately  $3,572,400,  based upon the average bid and asked prices for such
Common Stock on said date ($2.29),  as reported by a market maker. On such date,
there were 3,005,000 shares of Registrant's Common Stock outstanding.


                                     PART I


                  ITEM 1.
                  DESCRIPTION OF BUSINESS

General

Multimedia   Concepts   International,   Inc.  (the  "Company")  is  a  Delaware
corporation  which  was  organized  in  June  1994  under  the  name  U.S.  Food
Corporation. The Company changed its name to American Eagle Holdings Corporation
in  April  1995 and then to its  present  name in June  1995.  The  Company  was
initially  formed as a holding  company by  members of the Arbel  family for the
purpose of forming an integrated clothing design, manufacturing and distribution
operation.  In June 1994 the Company  acquired 55% of the outstanding  shares of
common stock of American Eagle, which acquired 100% of the outstanding shares of
Match II. In June 1995 the Company  acquired  34% of the  outstanding  shares of
common stock of MMP.

Unless the context otherwise requires,  all references to the "Company" prior to
January 1997 include American Eagle and its wholly owned  subsidiary,  Match II.
All references to the "Company"  after December 31, 1996 include only its wholly
owned subsidiary, U.S. Apparel Corp. In the discussion of the Company's business
operations,  the  activities  described with respect to American Eagle and Match
II,  commencing  January  1997 are being  engaged in by The Company  through its
subsidiary  U.S.  Apparel  Corp.,  with  American  Eagle  and  Match II  ceasing
operations.

No separate business description shall be provided for U.S. Apparel Corp.

Recent Developments

In January  1997 the Company  formed a  wholly-owned  subsidiary,  U.S.  Apparel
Corp., New York  corporation,  to design and manufacture a line of private label
cotton "T-shirts" and "polo" type tops  predominantly for men. The business plan
for U.S.  Apparel  Corp.,  is similar to the business  previously  engaged in by
American Eagle  Industries Corp.  ("American  Eagle") and Match II, Inc. ("Match
II").  The Company as 55%  stockholder  and sole financing arm of American Eagle
terminated its relationship with American Eagle due to continued losses stemming
from its expenses.  The Company  believes that its management  will enable it to
build its  business  in a  cost-effective  profitable  manner.  To this end U.S.
Apparel Corp., has recently received its own vendor number from K-Mart, American
Eagle's prior principal  customer.  In January 1997 U.S. Apparel Corp.  received
its first two purchase orders from K-Mart aggregating sales of over $600,000.






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On December 23, 1996, the Company held a special meeting of its stockholders and
authorized  the Company to (i) authorize the  Corporation  to sell or dispose of
its shares of common  stock of American  Eagle  Industries  Corp.  or effect the
dissolution thereof and (ii) authorize the Corporation to sell or dispose of its
shares  of  common  stock of  Multi  Media  Publishing,  Inc.,  unless  contrary
instructions  are  given.  At the  meeting  the  stockholders  approved  the two
proposals by a vote of 1,659,150  and  1,659,450,  respectively,  voting for the
proposals,  3,400 and 1,200, respectively voting against the proposals and 4,500
and 6,400, respectively, abstaining.
See Item 4 "Submission Of Matters To A Vote Of Security Holders."

         In December 1996 in accordance with the vote of its  stockholders,  the
Company  terminated its financing and business  relationships with both American
Eagle and MMP (as such terms are defined below).

Acquisitions

     American Eagle Industries Corp.  ("American Eagle") was formed in June 1994
by Ilan Arbel EACC, Carolyn Seymour Jones, Dorothy Zimmerman, Neil Benaderat and
Anita Friedman,  at which time 200,000 shares of its common stock were issued at
$.01 per share. EACC purchased 110,000 shares or 55% percent of American Eagle's
common  stock.  EACC  contributed  these shares to the capital of the Company in
June, 1994. Yair Arbel, a director of the Company,  is an officer,  director and
the sole stockholder of EACC. See "Certain Transactions."

     Match II, Inc.  ("Match  II") was formed by  Transatlantic  Commerce  Corp.
("TACC") in February  1993 at which time TACC  purchased  100 shares of Match II
common stock,  which  constituted 100% of its outstanding  shares. In June 1994,
American Eagle acquired the shares owned by TACC, as a contribution  to capital.
Yair  Arbel,  a director of the Company is the sole  stockholder  of TACC.  Ilan
Arbel is an officer and director of TACC.

     Multi  Media  Publishing,  Inc.,  ("MMP")  was  formed  in July 1994 by its
founders TACC, Bert Spilker,  M.D.,  Howard I. Wertheim,  D.M.D.,  and Lampert &
Lampert,  counsel to the Company, with TACC owning 34% of the outstanding shares
and each of Messrs.  Spilker and Werthheim  and  affiliates of Lampert & Lampert
owning 22% of the outstanding shares. TACC donated the shares of MMP owned by it
as a contribution to the capital to the Company in June 1995.

American Eagle Industries Corp.

     American  Eagle  designs and  manufactures  a line of private  label cotton
"T-shirts" and "polo" type tops predominantly for men. The garments are designed
in New York  City and are  typically  made  from  fabric  which is 100%  cotton.
American Eagle purchases  approximately  70% of its fabric, or piece goods, from
suppliers  located in Guatemala  and  approximately  30% of its piece goods from
suppliers in the United States.  The piece goods purchased in both Guatemala and
the  United  States  are  shipped  to  Honduras,  where  they are dyed,  cut and
assembled by  subcontractors  and then shipped to American Eagle's  warehouse in
Florida  pending  delivery to  American  Eagle's  customers.  The goods are then
shipped to customers by air or truck common carriers,  depending upon customers'
needs with respect to cost and time considerations, although all goods purchased
by K-Mart are picked up by K-Mart's  carriers at American  Eagle's  warehouse in
Florida.






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     Most of American  Eagle's  private  label  garments are sold through  major
department  stores such as K-Mart and Ames  Department  Stores.  Sales to K-Mart
accounted for  approximately  95% of the Company's  revenues for the years ended
September  30, 1994 and __% for the year ended  September 30, 1995 and September
30, 1996.

Match II, Inc.

     Match II, a wholly  owned  subsidiary  of American  Eagle and sells its own
brand name ladies knit tops and coordinates under the trade-name "Match II". The
Company's Match II garments are sold nationally in boutiques and specialty chain
stores.  Sales of Match II garments accounted for approximately 1% and 3% of the
Company's   revenues  for  the  years  ended   September   30,  1995  and  1996,
respectively.

     All  of  the  Match  II  garments  are  designed  and  manufactured  at its
production  facility  located at 448 West 16th Street,  New York, New York, with
the exception of sewing, which is provided by unaffiliated subcontractors in the
New York  metropolitan  area.  Match II garments are produced from fabrics which
are purchased,  together with all non-fabric sub-materials (zippers, buttons and
trimmings)  from  independent  manufacturers  and  suppliers  in  the  New  York
metropolitan area.

     Employees  of Match II,  design and cut patterns for the Match II garments,
cuts the fabric  and ship the cut  fabric,  together  with  required  non-fabric
sub-materials,  to sewing  subcontractors,  which then sew and assemble garments
for Match II.  All  completed  Match II  garments  are  delivered  by the sewing
subcontractors  to Match II for final  inspection,  allocation  and  shipment to
customers.  The goods are shipped to customers by air or truck common  carriers,
depending upon  customers'  needs with respect to cost and time  considerations.
The Match II garments are sold by management and salaried sales  personnel of at
the Company's showroom/sales office.

Business Strategy

     The Company's  strategy is to focus on the design,  manufacture and sale of
both  private-label  and brand name knit tops for men,  women and children.  The
Company is of the belief that sales through  department stores offer it the best
market for its American Eagle lines and through  specialty  stores and boutiques
for  its  Match  II  lines.   The  Company   further   believes  that  off-shore
manufacturing  of  its  garments  in  Honduras  currently  offers  it  the  most
cost-effective   means  of  manufacturing  its  garments.   Notwithstanding  the
foregoing,  the Company may in the future manufacture its garments  domestically
or in other jurisdictions abroad if it becomes cost-effective.

Design and Manufacturing

     American Eagle engaged  American Eagle Imports Ltd.  ("AEI"),  a consulting
company  formed by Carolyn  Seymour Jones and Harmon  Shidlosky to provide sales
and design consulting  services at a weekly fee of $5,000.  With the termination
of the Company's  financing of American  Eagle,  this  consulting  agreement was
terminated.

     The Company's  garments consist of original designs and  modifications  and
copies of existing  designs.  In designing the Company's  garments,  the Company
first  creates  the  pattern  of he new  garment  and  sews  samples  of the new
garments, which are then delivered to the Company's sales personnel and showroom
for introduction to the Company's existing customers and the trade.






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     American Eagle currently  designs and  manufactures a line of private label
knit tops  predominantly  for men,  including two types of T-shirts,  one with a
pocket and one without,  and two types of polo shirts,  one with collar  buttons
and one without.  American Eagle also  manufactures a lightweight  denim jacket.
Match II currently  offers a line of private label women's tops in approximately
14 different styles. The Company is continually seeking to design and market new
products for both its American Eagle and Match II lines

Supplies and Inventory

     American Eagle purchases its fabrics predominantly from Guatemala.  Most of
American Eagle's non-fabric sub-materials (zippers,  buttons, and trimmings) are
purchased from New York City-based  manufacturers and suppliers.  American Eagle
generally  pays for fabrics and  non-fabric  sub-materials  upon receipt.  As is
customary  in the  industry,  American  Eagle  does  not have  long-term  formal
arrangements  with any of its suppliers  and  purchases its supplies  based upon
specific  design and order  requirements.  Match II garments are  produced  from
fabrics which are purchased,  together with all non-fabric  sub-materials,  from
independent  manufacturers  and  suppliers  in the New York  metropolitan  area.
Neither  American Eagle nor Match II have  experienced  difficulty in satisfying
their fabric and non-fabric  requirements  and considers their sources of supply
adequate.  The Company's inventory of garments varies depending upon its backlog
of purchase orders and its financial position. Quality Control

     American Eagle conducts  limited quality control in Honduras to ensure that
finished  goods meet American  Eagle's  standards.  The quality  control  person
inspects  samples  of  garments  on a random  basis to  ensure  compliance  with
American Eagle's specifications.

Marketing and Sales

     Most of American  Eagle's  private  label  garments are sold through  major
department  stores  in the  United  States  such as K-Mart  and Ames  Department
Stores.  Sales  to  K-Mart  accounted  for  approximately  95% of the  Company's
revenues for the years ended  September 30, 1995 and 1996. The Company bills its
clients on a net 30- day  basis.  There is a lag time  between  the time the raw
materials are purchased, the final products are produced and shipped and receipt
of payment is received. Late or non-payment could cause material adverse effects
on the Company's cash flow and operations,  especially  since a large portion of
the Company's sales are to one customer.


     American  Eagle and Match II do not sell on  consignment  and do not accept
return  of  products  other  than  imperfect  goods or goods  shipped  in error.
Imperfect goods are generally replaced with new, conforming goods.

     The Company  believes  that a key feature of its business is its ability to
design,  manufacture  and sell low cost garments  which are similar in style and
appearance to more expensive garments.

Work in Progress; Backlog

     A significant  portion of the Company's sales are generated from short term
purchase  orders from  customers  who place  orders on an as-needed  basis.  The
Company  typically  manufactures  its  products  upon receipt of orders from its
customers  and  delivers  goods  within  four weeks of receipt of an order.  The
Company generally manufactures





<PAGE>



     approximately  10% more goods than is ordered by customers in  anticipation
of reorders from customers.  Information relative to open purchase orders at any
date may be materially  affected by, among other things, the timing of recording
of orders and  shipments.  Accordingly,  the Company  does not believe  that the
amount of its unfilled orders at any time is meaningful.  As of the date of this
report the Company has unfilled  purchase orders of approximately  $600,000 with
respect to two purchase orders received from K-Mart.

Financing

     The Company bills its client's on a net 30-day  basis.  There is a lag time
between  the time the raw  materials  are  purchased,  the  final  products  are
produced  and  shipped  and  receipt  of  payment is  received.  Although  it is
customary in the garment  industry to finance  receivables  through  "factoring"
(i.e.,  financing secured by accounts  receivable of the borrower's  customers),
the Company has not, to date,  factored  any of its  receivables.  Although  the
Company has no present  intention  to do so, it may rely on factoring to finance
future operations.


Competition

     There is intense  competition in the apparel  industry in which the Company
participates.  American  Eagle  designs,  manufactures  and  markets  a line  of
T-shirts  and  polo  shirts  to  large  department  stores  and  Match  designs,
manufactures  and  markets a line of blouses to small  boutiques  and  specialty
stores.  The Company  competes with many other  manufacturers  in these markets,
many of which are larger and have greater resources than the Company.

     The Company's business is highly competitive, with relatively insignificant
barriers to entry and with numerous firms competing for the same customers.  The
Company is in direct  competition  with local,  regional and  national  clothing
manufacturers,   many  of  which  have  greater  resources  and  more  extensive
distribution  and marketing  capabilities  than the Company.  In addition,  many
large  retailers have recently  commenced  sales of "store brand" garments which
compete with those sold by the Company.  Management  believes that the Company's
market share is insignificant in its product lines.

     Many of the national  clothing  manufacturers  have  extensive  advertising
campaigns which develop and reinforce brand  recognition.  In addition,  many of
such  manufacturers  have agreements with department  Stores and national retail
clothing  chains to jointly  advertise  and  market  their  products.  Since the
Company does little  advertising and has no agreement with any department  store
or national retail chain to advertise any of its products,  the Company competes
with companies which have brand names which are well known to the public. It can
be expected that a retail  shopper will buy a garment from a "brand name" entity
before that of an unknown entity, if all other factors are equal.

Employees

     As of September 30, 1996,  the Company  employed __ full-time  persons,  of
which ___ were officers,  (NEED INFO HERE). None of the employees of the Company
is represented by a union, and the Company  considers  employee  relations to be
good.






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Multi Media Publishing, Inc.

     The Company invested $285,000 in Multi Media Publishing,  Inc.,  ("MMP") of
which at September 30, 1996 the total amount owed was $120,000. This company has
not earned any revenues and does not have any operations. The Company has ceased
the financing of this companies  activities and intends to seek an accounting of
and the return of the funds its has invested.

     MMP was formed in July,  1994 by its  founders,  TACC (34%),  Bert Spilker,
M.D. (22%), Howard I. Wertheim,  D.M.D.  (22%),  affiliates of Lampert & Lampert
(22%), TACC owning 34% of the outstanding shares. TACC donated the shares of MMP
owned by it as a contribution to the capital of American Eagle in June 1995. MMP
is a development  stage entity,  which to date,  has completed the production of
two computer  compact disc read only memory discs  ("CD-ROM"),  which are CD-ROM
versions of three clinical books authored by Bert Spilker, M.D. and published by
Raven Press.  One of the discs  contains  the text of two clinical  study books,
entitled  "Guide to  Clinical  Trials"  and  "Patient  Recruitment  in  Clinical
Trials." The second disc contains the text of Dr. Spilker's "Medical  Dictionary
in Six Languages." The CD-ROM version of "Guide to Clinical Trials" and "Patient
Recruitment  in Clinical  Trials is being  co-published  by MMP and Raven Press,
with expenses and profits, if any, to be split equally between such parties. The
CD-ROM  version of "Medical  Dictionary  in Six  Languages"  is being  published
solely by MMP.  Dr.  Spilker has written 10 other  books;  however,  there is no
present intention to publish any of them on CD-ROM.

     MMP and Raven Press, a publisher of several of Dr.  Spilker's  books,  have
entered  into an  agreement  whereby  the Company and Raven Press will split the
expenses  and  profits  with  respect to CD-ROM  sales of the "Guide to Clinical
Trials" and "Patient  Recruitment in Clinical  Trials" books.  The Company being
responsible  for the conversion of the two books to CD-ROM and Raven Press being
responsible  for the  marketing  and sales of the  product.  With respect to the
"Medical  Dictionary in Six Languages"  book, Raven Press shall provide the text
to MMP in return for a 15%  royalty on gross  sales.  MMP will have the right to
market and distribute the CD-ROM for such book.

     The electronic  publication of information  for the consumer,  educational,
pharmaceutical and medical profession all markets relates to two rapidly growing
industries in the United  States,  the health care industry and the  information
services industry.

     The growth in the information services industry has been facilitated by the
development of electronic data storage and delivery technology and the increased
affordability  and  availability  of such  technology.  During the past  decade,
advances in the quality and quantity of low cost data storage and delivery  have
made possible mass marketing of computer hardware and software.

     A  MMP  has  focused  on  interactive   multimedia  CD-ROM  technology  for
IBM-compatible  personal  computers using Microsoft  Windows.  Other interactive
multimedia  formats are currently being introduced by hardware  developers.  The
formats  (sometimes  referred to as  platforms)  which are in various  stages of
development,  are television based and require either game cartridges or compact
disc players  attached to televisions.  The introduction of such platforms could
render  MMP's  current  titles  obsolete in the  future,  unless MMP was able to
reintroduce such titles in new or developing platforms, of which there can be no
assurance. Because the success of such platforms will be





<PAGE>



     dependent,  to some extent, on the availability of software titles designed
for such  platforms,  MMP is  optimistic  that it can obtain,  where  necessary,
licenses to use these platforms.  However,  no assurances can be given that such
licenses can be obtained or that they can be obtained on commercially reasonable
terms.  As of the date of this report no such licenses have been obtained and no
current negotiations are ongoing.

ITEM 2.
PROPERTIES

     The Company  sub-leases  6,000 square feet of industrial  space at 448 West
16th Street,  New York, New York,  where it leases its  administrative  offices,
factory and  warehouse.  The sub-lease is for a term of 4 years,  terminating on
December 31, 1998,  at a rate of  approximately  $36,000 per annum.  The Company
uses the  showroom  of an  affiliate  of the  Company's  president  without  any
compensation,  located  at 112 West  34th  Street,  New York,  New  York,  which
combined is  approximately  1,000 square feet. The lease for the Company's prior
showroom has been terminated.

ITEM 3.
LEGAL PROCEEDINGS

     The Company is not a party to any material  litigation  and is not aware of
any  threatened  litigation  that would have a  material  adverse  effect on its
business. No director,  officer or affiliate of the Company, or any associate of
any of them, is a party to or has a material interest in any proceeding  adverse
to the Company.

     In November 1996 Congress  Talcott,  Inc.  obtained a judgment  after trial
against  American Eagle in the Supreme Court of New York, in an action for a sum
due.  The entire  claim was  settled  and  disposed  of in January  1997 and the
judgment paid in full.

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

     On  December  23,  1996,  the  Company  held  a  special   meeting  of  its
stockholders,  at which time it proposed  to its  stockholders  On December  23,
1996, the Company held a special meeting of its  stockholders and authorized the
Company to (i)  authorize  the  Corporation  to sell or dispose of its shares of
common  stock of  American  Eagle  Industries  Corp.  or effect the  dissolution
thereof and (ii)  authorize the  Corporation to sell or dispose of its shares of
common stock of Multi Media Publishing,  Inc., unless contrary  instructions are
given.  At the meeting the  stockholders  approved the two proposals by votes of
1,659,150  and  1,659,450,  respectively,  voting for the  proposals,  3,400 and
1,200,   respectively   voting  against  the  proposals  and  4,500  and  6,400,
respectively, abstaining. Therefore, both proposals were adopted by the Company.

                  ITEM 5.
                  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Company's  Common Stock and Warrants are currently quoted on the Nasdaq
SmallCap Stock Market.  The following table sets forth  representative  high and
low closing bid quotes as reported by a market maker, during the

<PAGE>



     periods stated below. Bid quotations reflect prices between dealers, do not
include resale  mark-ups,  mark-downs or other fees or  commissions,  and do not
necessarily represent actual transactions.

                              Common Stock(1)     Public Warrants(1)

Calendar Period               Low       High      Low       High
10/09/95 - 12/31/95           6 3/8     8 3/4     3/4       3 1/4
01/01/96 - 03/31/96           8         9 1/4     1 5/8     2 1/2
04/01/96 - 06/30/96           8 3/4     9 1/4     2 1/8     3
07/01/96-  09/30/96           4 3/4     8 3/4     1 1/4     3 3/4
10/01/96- 12/31/96            1 3/4     4 3/4     11/32     1 5/16
01/01/97- 01/31/97

     Each  Warrant  entitles  the holders  thereof to purchase  one share of the
Company's Common Stock at an exercise price of $7.00 per share until November 8,
1997. The Warrants and the  underlying  shares of Common Stock are in registered
form,  pursuant  to the terms of a Warrant  agreement  between  the  Company and
Continental  Stock  Transfer  & Trust  Company,  as warrant  agent,  so that the
holders of the Warrants will receive upon their  exercise and payment  therefor,
registered shares of Common Stock. The Company's  registration  statement is not
current, therefore, the Warrants are not currently exercisable.






<PAGE>



     As of  February  6, 1997 there  were 35 holders of record of the  Company's
Common Stock,  although the Company  believes that there are  approximately  700
beneficial  owners of shares of Common  Stock.  As of September  30,  1996,  the
number of shares of Common Stock outstanding of the Company was 3,005,000.

     The Nasdaq Stock Market has sent a letter to the Company  advising that due
to  transactions  which  Nasdaq  views  as  against  certain  policies  that the
Company's listing is scheduled for termination on February 17, 1997. The Company
has and will continue to fight the delisting procedures commenced by Nasdaq.







<PAGE>



                                     PART II

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

     The  following  is  management's  discussion  and  analysis of  significant
factors which have affected the registrant's financial position and operations.

     Multimedia Concepts International, Inc. is a Delaware corporation which was
organized  in June  1994  under  the name U.S.  Food  Corporation;  its name was
changed to its present name in June 1995. The Company acquired  fifty-five (55%)
percent of the capital stock of American Eagle  Industries  Corp. in June, 1994.
In June 1994,  American Eagle acquired 100% of the issued and outstanding shares
of common stock of Match II, Inc. The Company also  acquired  thirty-four  (34%)
percent of the issued and  outstanding  capital stock of Multi Media  Publishing
Corp. in June 1995.

     American  Eagle designs and  manufactures a line of private label knit tops
predominantly  for men and boys,  including  two types of  T-shirts  (one with a
pocket and one without)  and two types of polo shirts (one with a button  collar
and one without). American Eagle also manufactures a lightweight denim jacket.

     Match II sells its own brand name of ladies' tops and coordinates under the
trade name  "Match II" The Match II  garments  are sold  nationally  in boutique
stores and specialty chain stores.

     MMP is a development stage entity, with no operations.

     As of September  30, 1996,  the Company  ceased all  operations of American
Eagle and its'  subsidiary  Match II,  due to  substantial  recurring  operating
losses.  In addition,  in December  1996,  the Company  terminated  all business
relationships with MMP, its'  unconsolidated  subsidiary (see Note 1 of Notes to
consolidated  financial  statements).  In January  1997,  the Company  commenced
operations  identical to the operations  conducted  under American Eagle under a
new subsidiary U.S. Apparel Corp., and to date has received a vendor number from
K-Mart and orders aggregating $600,000.

Results of Operations - Year Ended September 30, 1996
versus September 30, 1995:

     Net sales for the year ended  September 30, 1996  aggregated  $5,727,320 as
compared to $7,053,271 for the prior fiscal year. This decrease of $1,325,951 or
19% was primarily due to a reduction in sales to the Company's most  significant
customer, K-Mart. There is no assurance that the Company will be able to restore
sales to previous levels in future periods.

     For the year ended September 30, 1995, the Company  reflected gross profits
of $570,518 or 8.1% of sales.  For the year ended September 30, 1996 the Company
reflected a negative  gross profit of $672,952 or 11.7% of sales.  Management of
the Company  believes that the negative gross profit was caused by certain fixed
manufacturing  overhead  which could not be reduced in time to coincide with the
19% decrease in sales.





<PAGE>




     The Company's  overhead  costs  increased from $944, 874 for the year ended
September  30, 1995 to  $1,273,908  for the year ended  September  30, 1996,  an
increase of $329,034.  This increase in costs is primarily due to an increase in
consulting fees.

     For the year ended September 30, 1996, the Company  reflected a net loss of
$1,869,628 or $.69 per share.  For the year ended September 30, 1995 the Company
reflected a net loss of $373,798 or $.21 per share.  Management  attributes  the
increased losses to the reduction in sales and increased costs described above.


Liquidity and Capital Resources:

     At  September  30, 1996 the Company  reflected  cash of  $491,262,  working
capital of $3,299,735 and shareholders'  equity of $7,454,674.  At September 30,
1995 the  Company  had cash of  $2,207,000  working  capital of  $2,110,747  and
shareholders' equity of $1,351,919.

     The  improvement  between  1995  and  1996 was due to  several  factors  as
described below:

         (a)  In  January,   1996,   the  Company,   through  its   underwriter,
        successfully  completed an initial  public  offering of 920,000  shares,
        including  the  underwriter's  over  allotment,   of  its  common  stock
        (together with two warrants for each share) and received net proceeds of
        approximately $3,944,000.

         (b) In May 1996,  the Company sold  2,900,000  warrants to an executive
        officer of the  Company  at a price of $2.50 per  warrant.  Payment  for
        these warrants was effected through the transfer of certain  convertible
        preferred stock in another public entity, to the Company. (See Note 2n -
        of Notes to consolidated  financial  statements regarding the write-down
        of the value of the convertible securities to fair value.)

        Despite the above improvements in liquidity, the Company's auditors have
issued a going concern uncertainty  opinion on the financial  statements for the
year  ended  September  30,  1996.  The  reasons  for this  uncertainty  include
substantial  operating  losses and the fact that as of  September  30,  1996 the
Company ceased all the activities of its two operating  subsidiaries (see Note 1
of Notes to the  consolidated  financial  statements).  Unless the  Company  can
re-establish operations and those future operations are profitable,  the Company
may be  unable  to  continue  in  existence.  See Note 3 of  Notes to  financial
statements as regards management's plans to restore operations.

ITEM 7.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - Annexed hereto

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
            AND FINANCIAL DISCLOSURE - None







<PAGE>



                                    PART III


                  ITEM 9.
                  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


Officers and Directors

The directors of the Company are elected  annually by the  shareholders  and the
officers  are  appointed  annually by the Board of  Directors.  Vacancies on the
Board of Directors may be filled by the remaining  directors.  Each director and
officer will hold office until the next annual meeting of shareholders, or until
his successor is elected and qualified.  The executive officers and directors of
the Company are as follows:

Name                          Age                 Position
Ilan Arbel                    42                  President and Director
Shiekhar Boodram              33                  Secretary and Director
Rivka Arbel                   43                  Director
Yair Arbel                    47                  Director
Alan Berkun                   35                  Director


The directors of the Company are elected  annually by its  stockholders  and the
officers  of the  Company  are  appointed  annually  by its Board of  Directors.
Vacancies on the Board of Directors  may be filled by the  remaining  directors.
Each current director and officer will hold office until the next annual meeting
of stockholders, or until his successor is elected and qualified.






<PAGE>



     Ilan Arbel was the President,  Secretary and a Director of the Company from
inception until June 12, 1995 upon the election of Sheikhar  Boodram.  Mr. Arbel
was  re-elected  as President of the Company in May 1996.  In August 1, 1995 Mr.
Arbel was re-elected as a Director of the Company.  Mr. Arbel was the President,
Chief Executive  Officer and a Director of U.S. Wireless  Corporation  (formerly
American  Toys,  Inc.) from  inception  until July 1996. In May 1993,  Mr. Arbel
became a Director of Play Co. Toys & Entertainment  Corp.,  and since June 1994,
he has been the  Chairman of the Board.  In 1990,  Mr.  Arbel was an officer and
director of Calro  Fashions,  Ltd., a company which filed a bankruptcy  petition
and has received a discharge in bankruptcy.  From 1989 to present, Mr. Arbel has
been the sole Officer and Director of  TransAtlantic  Commerce  Corp., a company
involved in investments  and finance in the United States and Europe.  From 1986
through 1989,  Mr. Arbel was Chief  Executive  Officer and a Director of Amigal,
Ltd., a manufacturer of men's and women's clothing in Israel.  Mr. Arbel is also
and officer and director of various off shore  companies  engaging in investment
and related  activities.  Mr. Arbel is a graduate of the  University Bar Ilan in
Israel, with B.A. degrees in Economics, Business and Finance.

     Sheikhar  Boodram was the  President and Secretary of the Company from June
12, 1995 to May 1996 at which time he was elected as the Secretary.  Mr. Boodram
was the sole Officer and Director of American Eagle  Industries  Corp. and Match
II, Inc.  until  December  1996.  Mr.  Boodram  was a Director of U.S.  Wireless
Corporation  (formerly  American  Toys,  Inc.) from May 1993 to July 1996.  From
September 1992 to present, Mr. Boodram has been employed as Vice-President and a
Director  of Mister  Jay  Fashions  International,  Inc.  From  October  1991 to
September  1992, Mr. Boodram was employed as a designer with Mister Jay Fashions
International, Inc. From 1979 until October 1991, Mr. Boodram was the production
manager for Lady Helene  Sophisticates,  Ltd., a manufacturer of ladies garments
which ceased operations in 1991.

Rivka  Arbel has been a Director  of the  Company  since  June 12,  1995 and was
elected as  Vice-President  of the Company in May 1996. In October 1996 Ms Arbel
resigned as an officer of the Company.  From 1992 to present, Ms. Arbel has been
a director of Mister Jay Fashions International,  Inc. From 1986 to present, Ms.
Arbel has been President and a Director of Amigal, Ltd., a producer of men's and
women's wear in Israel.  Ms. Arbel is the wife of Yair Arbel,  a director of the
Company and an officer, director and sole shareholder of EACC.

     Yair Arbel has been a director  of the  Company  since June 12,  1995.  Mr.
Arbel is currently  employed by Israeli Aircraft  Industries,  where he has been
employed since 1980. Yair Arbel is the husband of Rivka Arbel and the brother of
Ilan Arbel,  the former  President  and  Secretary  and current  Director of the
Company. Mr. Arbel is an officer, director and sole shareholder of EACC.

     Alan  Berkun has been a Director of the Company  since June 12,  1995.  Mr.
Berkun has also been a Director  of  American  Toys and Play Co. Toys since July
1993.  For more than the past five years,  Mr. Berkun has been employed by Russo
Securities as its general  counsel.  Mr. Berkun was licensed as an NASD Series 7
Registered  Representative  with Russo  Securities  from  October  1991  through
November 1991 and June 1989 through  October 1989. Mr. Berkun's Series 7 license
lapsed in December 1993,  however,  subsequently,  Mr. Berkun  received a waiver
from the NASD and renewal of his Series 7 status.  Presently,  Mr. Berkun is the
sole officer, director and stockholder of Emme Corp., d/b/a Marlowe & Company, a
registered NASD  broker/dealer.  Mr. Berkun is an attorney licensed in the State
of New York.

The Company has agreed to indemnify its officers and  directors  with respect to
certain liabilities  including  liabilities which may arise under the Securities
Act of 1933. Insofar as indemnification for liabilities arising under the





<PAGE>



Securities Act may be permitted to directors,  officers and controlling  persons
of  the  Company  pursuant  to  any  charter,   provision,   by-law,   contract,
arrangement,  statute or  otherwise,  the Company has been  advised  that in the
opinion of the  Securities  and Exchange  Commission,  such  indemnification  is
against  public  policy as expressed in the  Securities  Act and is,  therefore,
unenforceable.  In the  event  that a claim  for  indemnification  against  such
liabilities  (other than the payment by the Company of expenses incurred or paid
by a director,  officer,  or controlling person of the Company in the successful
defense of any such action,  suit or  proceeding)  is asserted by such director,
officer or controlling  person of the Company in connection  with the Securities
being  registered,  the Company  will,  unless in the opinion of its counsel the
matter  has  been  settled  by  controlling  precedent,  submit  to a  court  of
appropriate  jurisdiction  the question  whether such  indemnification  by it is
against  public policy as expressed in the Act and will be governed by the final
adjudication of such issue. Executive Compensation.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Securities  Exchange Act of 1934, as amended,  requires the
Company's  officers,  directors and persons who  beneficially  own more than ten
percent of a registered class of the Company's equity securities to file reports
of securities  ownership and changes in such  ownership  with the Securities and
Exchange  Commission ("SEC").  Officers,  directors and greater than ten percent
beneficial  owners also are required by rules  promulgated by the SEC to furnish
the Company with copies of all Section 16(a) forms they file.  Based solely upon
requests for information of the Company's  officers,  directors and greater than
10%  shareholders,  during  fiscal 1995,  the Company has been informed that all
officers,  directors or greater than 10% shareholders have stated that they have
filed such  reports as is  required  pursuant to Section  16(a)  during the 1995
fiscal year. The Company has no basis to believe that any required filing by any
of the above indicated individuals has not been made.


                  ITEM 10.
                  EXECUTIVE COMPENSATION

Summary of Cash and Certain Other Compensation

The following provides certain information  concerning all Plan and Non-Plan (as
defined in Item 402 (a)(ii) of Regulation S-B)  compensation  awarded to, earned
by, paid by the Company  during the years ended  September  30, 1996 and 1995 to
each of the named executive officers of the Company.

                           Summary Compensation Table

                               Annual Compensation
<TABLE>
<CAPTION>


(a)                           (b)            (c)            (d)            (e)
<S>                           <C>            <C>            <C>            <C>
Name and Principal                                                         Other Annual
Position                      Year           Salary($)      Bonus($)       Compensation($) (1)

Ilan Arbel                    1996           -              -
President                     1995           -              -
</TABLE>


     (1) Mr. Arbel does not receive any cash  compensation  as an officer of the
Company.  Mr. Arbel entered into an employment agreement with the Company in May
1996.  See  "  Certain  Relationships  and  Related  Transactions"  and  "Recent
Developments".






<PAGE>




1995 Senior Management Incentive Plan

In June 1995,  the Board of Directors  adopted the Senior  Management  Incentive
Plan (the  "Management  Plan"),  which was adopted by stockholder  consent.  The
Management  Plan  provides  for the  issuance  of up to  150,000  shares  of the
Company's  Common Stock in  connection  with the  issuance of stock  options and
other stock purchase rights to executive officers and other key employees.

The  Management  Plan  was  adopted  to  provide  the  Board of  Directors  with
sufficient  flexibility regarding the forms of incentive  compensation which the
Company will have at its disposal in rewarding  executive officers and directors
who are also employees of the Company or a subsidiary or the Company, who render
significant  services  to the  Company  one of its  subsidiaries.  The  Board of
Directors intends to offer key personnel equity ownership in the Company through
the grant of stock options and other rights  pursuant to the Management  Plan to
enable  the  Company  to  attract  and  retain   qualified   personnel   without
unnecessarily  depleting the Company's  cash reserves.  The  Management  Plan is
designed to augment the Company's existing compensation programs and is intended
to enable the Company to offer  executive  officers and  directors  who are also
employees of the Company a personal interest in the Company's growth and success
through  awards of either shares of Common Stock or rights to acquire  shares of
Common Stock.

The  Management  Plan is  intended  to help the  Company  attract and retain key
executive   management  personnel  whose  performance  is  expected  to  have  a
substantial  impact on the Company's  long-term  profit and growth  potential by
encouraging and assisting those persons to acquire equity in the Company.  It is
contemplated  that only those  executive  management  employees  (generally  the
Chairman of the Board,  Vice-Chairman,  Chief Executive Officer, Chief Operating
Officer,  President and Vice Presidents of the Company) who perform  services of
special  importance  to the Company  will be eligible to  participate  under the
Management  Plan.  The Company does not presently have any intention to hire any
additional  management  employees  and has not engaged in any  solicitations  or
negotiations with respect to the hiring of any management  employees.  As of the
date of this Prospectus, the Company's sole officers are Ilan Arbel and Sheikhar
Boodram, and its directors also include Rivka Arbel, Yair Arbel and Alan Berkun.
A total of 150,000  shares of Common Stock will be reserved  for issuance  under
the  Management  Plan. It is  anticipated  that awards made under the Management
Plan will be subject to three-year vesting periods, although the vesting periods
are subject to the discretion of the Administrator (as defined below).








<PAGE>



ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                  AND MANAGEMENT

The  following  table sets forth certain  information  at February 1, 1997 based
upon  information  obtained  by the persons  named  below,  with  respect to the
beneficial ownership of common shares by (i) each person known by the Company to
be the  owner  of 5% or  more of the  outstanding  common  shares;  (ii) by each
officer and director; (iii) and by all officers and directors as a group.

<TABLE>
<CAPTION>



                                                  Number of                     Percentage of Class
Name                                              Common Stock
                                                  Shares Owned (1)
<S>                                               <C>                           <C>
Ilan Arbel (2)(3)(4)                              1,045,000                     34.8%
c/o Multimedia Concepts International, Inc.
448 West 16th Street
New York, New York

Yair Arbel (2)(3)                                 1,045,000                     34.8%
c/o Multimedia Concepts International, Inc.
448 West 16th Street
New York, New York

U.S. Wireless Corporation(5)                      400,000                       13.3%
2694 Bishop Drive
San Ramon, CA 94583

European Ventures Corp. (2)(3)(5)                 1,045,000                     34.8%
c/o Multimedia Concepts International, Inc.
448 West 16th Street
New York, New York

Alan Berkun (6)                                   --                            --
c/o Multimedia Concepts International, Inc.
448 West 16th Street
New York, New York

All Officers and Directors                        1,045,000                     34.8%
(3 as a Group) (2)-(6)

</TABLE>

     (1) Does not give effect to (i) 5,910,000  shares of Common Stock  reserved
for issuance  upon the exercise of the Warrants,  (ii) 240,000  shares of Common
Stock reserved for issuance upon the exercise of the Underwriter's  Warrants and
the Warrants  underlying the  Underwriter's  Warrants or (iii) 150,000 shares of
Common Stock reserved for issuance  under the Company's  1995 Senior  Management
Incentive  Plan, of which an option to purchase 75,000 shares at $8.75 per share
has been granted.

     (2) Ilan Arbel, the brother of Yair Arbel is the sole officer, director and
stockholder of EVC.

     (3) Yair  Arbel,  a  director  is the  brother  of Ilan  Arbel,  the  Chief
Executive  Officer and a director of the  Company.  It can be expected  that the
shares of Common Stock of record and beneficially  owned by members of the Arbel
family  would  be  voted  as a  group  on  matters  presented  to the  Company's
stockholders; however there is no voting agreement or arrangements which require
such unified voting.

     (4) Does not include (i) 2,900,000 shares of Common Stock issuable upon the
exercise of Warrants issued to Mr. Arbel,  upon Mr. Arbel's  exercise of options
to purchase 1,900,000 Warrant and 1,000,000 Warrants in April 1996 and May 1996,
respectively,  which  Warrants  were sold  pursuant  to a Form S-8  registration
statement or (ii) 585,000 shares of Common Stock and 1,170,000  Warrants sold by
Europe  American  Capital  Corp.  ("EACC"),  a company of which Ilan Arbel is an
officer, director and sole stockholder, pursuant to the Company's initial public
offering  registration   statement.   See  "Certain  Relationships  and  Related
Transactions" and "Recent Developments."






<PAGE>



     (5) In June 1996 EVC,  exchanged  400,000  shares of the  Company's  Common
Stock for 3,106,005 shares of common stock of U.S Wireless Corporation (formerly
American Toys,  Inc.). EVC had the right to either pay $1,800,000 for the shares
of American Toys, Inc. or transfer 400,000 shares of the Company's Common Stock.

     (6) Does not include 50,000 shares and 75,000 shares of Common Stock issued
pursuant to the exercise of stock  options  granted to Alan Berkun in March 1995
and June 1995,  respectively,  which were sold pursuant to Form S-8 Registration
Statements on March 21, 1995 and June 19, 1995, respectively.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In May 1994, MMP was incorporated in the State of Delaware.  Mitchell Lampert, a
partner of Lampert & Lampert,  former counsel to the Company,  was a director of
MMP until June  1995,  when he  resigned.  The  current  owners of MMP and their
percentage interest is as follows:  Affiliates of Lampert & Lampert own 22%; Dr.
Bert Spilker owns 22%; Howard Wertheim,  D.M.D., the President and sole director
of MMP,  owns 22%;  and the  Company  owns 34%.  In June 5,  1995,  the  Company
received as a capital  contribution  the shares of MMP's common stock previously
owned by Trans Atlantic Commerce Corp. ("TACC")

In June 1994, in connection with the incorporation of the Company,  EVC acquired
1,500,000  shares of the Company's  Common Stock for aggregate  consideration of
$400,000.  Between  July  1994 and  March  1995,  the  Company  obtained  bridge
financing (the "Bridge Loan") from EACC in the amount of $2,500,000.  The Bridge
Loan is  evidenced  by a  promissory  note dated June 1, 1995 in such  principal
amount,  bears  interest at the rate of 10% and is due and payable on  September
30, 1996. In connection  with such loan, in July 1994,  the Company  issued EACC
300,000  shares and 600,000  Warrants for  aggregate  consideration  of $300 and
$600, respectively.  The sale of the shares of Common Stock, Warrants and shares
of Common Stock  issuable upon the exercise of the Warrants  issued to EACC have
been  registered  for  sale  herein  but  are  not  being  underwritten  by  the
Underwriter.

In June 1994,  American  Eagle  Industries  Corp.  sold 110,000  shares,  50,000
shares,  20,000  shares,  10,000 shares and 10,000 shares of its Common Stock to
Europe  American  Capital  Corp.   ("EACC"),   Carolyn  Seymour  Jones,  Dorothy
Zimmerman, Anita Friedman and Neil Benedaret, respectively, for consideration of
$1,100, $500, $200, $100 and $100, respectively.  Anita Friedman, Neil Benedaret
and Dorothy Zimmerman are all related to each other.

In July 1994, the shareholders of MMP entered into a shareholders  agreement (i)
limiting the resale of shares of Common Stock of MMP by its shareholders without
giving MMP and the other  shareholders  the right of first refusal on a pro rata
basis (ii)  requiring  the  unanimous  consent of the board of directors to take
certain actions  including (a) amending MMP's  certificate of  incorporation  or
by-laws,  (b) acquisitions,  mergers or the dissolution of MMP, (c) discharge of
its officers,  (d) sale or lease of assets, (e) borrowing of money by MMP or any
of its officers or directors,  (f) the payment of dividends  and  salaries,  (g)
capital  expenditures  of  $50,000  or more or (h) the  issuance  of  additional
shares.  The sole  member of the board of  directors  is  Howard  Wertheim,  and
therefore, currently controls the operations of MMP.






<PAGE>



In March 1995,  American Eagle  Industries  Corp.  loaned the sum of $135,000 to
Dytex  Honduras,  S.A.  ("Dytex"),  an  entity  located  in  Honduras  which  is
responsible for dyeing the fabric  provided by the Company.  The loan was repaid
in full. As  consideration  for the loan,  Dytex has reduced the Company's labor
rate to $1.30 per pound,  which is a reduction of $.50 per pound from its normal
labor rate of $1.80 per pound.

In  April  1995,  EVC,  a  principal  stockholder  of  the  Company,   issued  a
subordinated debenture to Euro-Atlantic  Securities,  Inc., the Underwriter,  in
the principal  amount of $250,000.  The loan is  subordinate to all debts of the
Underwriter,  bears  interest  at the rate of 10% per  annum  and the  principal
amount and accrued  interest is due and payable on March 31, 1998. A copy of the
loan was filed with the NASD in April 1995.

In June 1995,  TransAtlantic Commerce Corp., a British Virgin Island corporation
of which Ilan Arbel is the sole officer and director, and of which Yair Arbel is
the sole stockholder, donated 680,000 shares of MMP common stock to the Company,
which shares represent  approximately 34% of the issued and outstanding  capital
stock of MMP.

On September 28, 1995 EACC converted  $1,510,500  principal amount of the bridge
loan into equity in the Company,  whereby the Company  issued  285,000 shares of
Common Stock at $5.00 per share and 570,000 Warrants at $.15 per Warrant.

         On April 4, 1996,  the board of  directors  authorized  the  Company to
enter into a compensation agreement with Ilan Arbel. Pursuant thereto granted to
Ilan Arbel an option to purchase 1,900,000  warrants,  identical to the Warrants
sold by the Company in its initial public  offering.  The option was exercisable
at $.04 per  Warrant.  The  Warrants and shares  underlying  the  Warrants  were
registered for resale pursuant to a Form S-8 registration  statement.  Mr. Arbel
exercised  this option in full and sold the Warrants in April 1996. In addition,
the board  authorized the Company to issue an additional  option to Mr. Arbel to
purchase  200,000 shares of Common Stock at $3.70 per share.  On April 19, 1996,
the board of  directors of the Company and Mr.  Arbel  amended the  compensation
agreement and terminated  the option to purchase  200,000 shares of Common Stock
and in lieu  thereof  issued an  option  to  purchase  an  additional  1,000,000
Warrants.  The option was  exercisable  at $.04 per Warrant.  The Warrants  were
registered  for resale  pursuant to an  amendment  to the Form S-8  registration
statement.  Mr. Arbel exercised this option in full and sold the Warrants in May
1996.

         As of May 15, 1996,  the Company  entered into an employment  agreement
with Ilan Arbel,  for a period of five years,  pursuant thereto Mr. Arbel became
the  President  and Chief  Executive  Officer of the  Company.  At such time the
Company and Mr.  Arbel  determined  that the price paid for the Warrants was too
low, and agreed to increase the price to $1.90 per Warrant,  which was increased
to $2.50 per Warrant,  whereby Mr. Arbel owed the Company $7,250,000,  which was
payable either in cash, or other  securities.  The term securities is defined as
any debt or equity security or convertible security,  the underlying security of
which, is traded on either a national securities exchange or on the Nasdaq Stock
Market.  The price for which the  securities may be exchanged to reduce the debt
shall be 50% of the  average  bid  price  of the  securities  or the  underlying
securities  of a convertible  security,  for a period of ninety days ending five
days prior to the  exchange.  The  employment  agreement  provides that no other
compensation  or remuneration be paid to Mr. Arbel during its term. In September
1996, Mr. Arbel transferred 528,070 shares of Play Co. Toys &





<PAGE>



Entertainment  Corp.'s  ("Playco")  Series E Preferred  Stock,  each of which is
convertible  at any time into 20 shares of Playco's  common  stock as payment of
the debt.

         In May  1996,  the  Company  in  anticipation  of the  execution  of an
employment  agreement with Rivka Arbel, granted Mrs. Arbel an option to purchase
from the Company up to 600,000  Warrants,  which Warrants are to be identical to
the Warrants  issued in the Company's  initial public  offering.  Initially Mrs.
Arbel was to pay $.04 per Warrant and resell the Warrants pursuant to a Form S-8
registration statement, however, the Company and Mrs. Arbel have determined that
such  price is too low and have  decided  to  increase  the  price to $2.50  per
Warrant, which may be paid either in cash, or other securities,  as such term is
described  above. In June 1996, Mrs. Arbel entered into an employment  agreement
with the Company, for a period of five years, pursuant thereto Mrs. Arbel became
a Vice-President of the Company. The employment agreement provided that no other
compensation  or  remuneration  be paid to Mrs. Arbel during its term. In August
1996 this  agreement was  terminated  and the 600,000  Warrants  returned to the
Company's treasury unexercised.

         In May,  1996 the Company  formed Video  On-Line  USA,  Inc., a company
which entered into a letter of intent to purchase from Video  Authoring  Systems
Group,  Inc.  ("VAS  Group") 51% of its  outstanding  shares of common stock for
$1,000,000.  The Company  agreed to make an initial  investment  of $100,000 and
agreed to loan an  additional  $900,000  for the  purpose  of  consummating  the
purchase of VAS Group. No stock purchase agreement was ever entered into and the
acquisition  was never  consummated.  The  Company  is no longer  pursuing  this
acquisition. Video is currently a company with no operations.


On May 5,  1996,  Video  entered  into a letter of intent to  purchase  from the
current stockholders of Software Affiliates, Inc. ("Software") 80% of the issued
and  outstanding  shares of its common stock for 150,000 shares of the Company's
Common  Stock.  Additionally,  Video  agreed to loan to Software an aggregate of
$250,000.  No stock purchase agreement was ever entered into and the acquisition
was never consummated. Video is no longer pursuing this acquisition.

         In June 1996,  the Company  loaned  $331,136  to Ilan Arbel,  which was
payable upon demand not accruing any interest. This loan has been repaid.

         As of June 30, 1996, the Company had loaned approximately  $420,000 and
$400,000 to Hollywood Productions,  Inc. and Mister Jay Fashions  International,
Inc., respectively,  of which the $420,000 loaned to Hollywood Productions, Inc.
has been repaid. The loans accrued no interest and were payable upon demand.
These loans have been repaid.

          On June 19,  1996 and  October  10,  1996,  Ilan  Arbel  and  European
American Capital Corp., a company in which Mr. Arbel's brother,  Yair Arbel, was
the sole  officer,  director and a principal  stockholder,  transferred  528,070
shares  and  200,000  shares,  respectively,  of Play Co.  Toys &  Entertainment
Corp.'s  ("Playco")  Series E Preferred Stock to the Company.  Each share of the
Series E Preferred Stock is exercisable  into 20 shares of Playco's common stock
 . The  transfer  by Mr.  Arbel was  payment  of the debt  owed for the  Warrants
purchased  pursuant to his  employment  agreement.  In the event such shares are
converted  into  Playco's  common  stock,  the Company  would become a principal
stockholder of Playco.






<PAGE>



         On  October  21,  1996,  the  board of  directors  adopted  resolutions
authorizing  the Company  subject to  stockholder  approval,  to  terminate  its
ownership  and  relationships  with  American  Eagle  and  MMP as  nonprofitable
business investments. In addition, the board has authorized the Company to enter
into  a  stock  purchase   agreement  with  U.S.  Wireless   Corporation  ("U.S.
Wireless"), a company in which Ilan Arbel is an Officer and beneficial principal
stockholder,  to exchange 3,000,000 shares of the Company's Common Stock for the
shares of Common Stock of Mantra Technologies,  Inc.  ("Mantra"),  owned by U.S.
Wireless,  comprising 51% of the outstanding shares of Mantra. In addition,  the
Company would be assigned U.S.  Wireless's  stock purchase  option to obtain the
balance of the  outstanding  shares of  Mantra.  This  acquisition  has not been
consummated and negotiations have been terminated.








<PAGE>



     ITEM 13.  EXHIBITS  AND  REPORTS  ON FORM 8-K

     (a)The following  financial  statements of the Company are included as Part
II, Item 8:
<TABLE>
<CAPTION>
<S>                                                              <C>
Index to Financial Statements                                    F-1

Report of Independent Certified Public Accountants               F-2

Balance Sheets                                                   F-3

Statements of Operations                                         F-4

Statements of Stockholders' Equity                               F-5

Statements of Cash Flows                                         F-6

Notes to Financial Statements                                    F-7

</TABLE>

<PAGE>



     (b) During the last quarter,  the Company has not filed any reports on Form
8-K.

     (c) All  exhibits  have  previously  been  filed  with  the  Commission  in
connection with the Company's  Registration  Statement on Form SB-2 and pursuant
to 17 C.F.R. '230.411, are incorporated by reference herein.

<TABLE>
<CAPTION>
<S>                           <C>
1.1                           Form of Underwriting Agreement.
1.2                           Form of Selected Dealers Agreement.
3.1                           Certificate of Incorporation of the Company
3.2                           Amendment to Certificate of Incorporation of the Company, filed in May 1995
3.3                           Second Amendment to Certificate of Incorporation of the Company, filed in June 1995
3.4                           Certificate of Incorporation of Match II, Inc.
3.5                           By-Laws of the Company
3.6                           By-Laws of Match II, Inc.
3.7                           Certificate of Incorporation of American Eagle Industries Corp.
3.8                           By-Laws of American Eagle Industries Corp.
4.1                           Specimen Common Stock Certificate.
4.2                           Specimen Warrant Certificate.
4.3                           Form of Warrant Agreement between the Company and EuroAtlantic
                              Securities, Inc. (the "Underwriter").
4.4                           Form of Warrant  Agreement  between the Company,  the
                              Underwriter  and  Continental  Stock Transfer & Trust
                              Company.
4.5                           Form of Bridge Loan Warrant.
4.6                           MMP Shareholders Agreement
4.7                           Form of Lock-up Agreement
5.0                           Opinion of Lampert & Lampert.
10.1                          The Company Senior Management Incentive Plan.
10.2                          Sublease at 448 West 16th Street, New York, New York
10.3                          Lease for 1407 Broadway, New York, New York
10.4                          Dytex Agreement
10.5                          Consulting and Mergers and Acquisitions Agreement
10.6                          Florida warehouse lease
10.7                          Promissory Note Payable to Europe American Capital Corp.
10.8                          MMP Letter of Intent to Acquire Films
10.9                          MMP Agreement with Cinerom

<PAGE>



10.10                         Raven Press Agreement
10.11                         Form of Demand Note from MMP to Company.
10.12                         Amended Note payable to Europe American Capital Corp.
</TABLE>






<PAGE>



                                   SIGNATURES

In  accordance  with Section 13 or 15(d) of the Exchange Act of 1934, as amended
the Registrant has caused this report to be signed on its behalf, thereunto duly
authorized as of the 6th day of February 1997.


MULTIMEDIA CONCEPTS INTERNATIONAL, INC.


By:
Ilan Arbel, President

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

<TABLE>
<CAPTION>
<S>                                     <C>                                     <C>
/s/ Ilan Arbel                          President and Director                  02/06/97
Ilan Arbel                                                                      Date

/s/ Sheikhar Boodram                    Secretary and Director                  02/06/97
Sheikhar Boodram                                                                Date

/s/ Rivka Arbel                         Director                                02/06/97
Rivka Arbel                                                                     Date

/s/ Yair Arbel                          Director                                02/06/97
Yair Arbel                                                                      Date

/s/ Alan Berkun                         Director                                02/06/97
Alan Berkun                                                                     Date

</TABLE>







<PAGE>



                 - INDEX TO CONSOLIDATED FINANCIAL STATEMENTS -

<TABLE>
<CAPTION>
<S>                                                                             <C>
                                                                                Page(s)
Financial Statements:

Independent Auditors' Report                                                    F - 2

Consolidated Balance Sheets as of September 30, 1996 and 1995                   F - 3

Consolidated Statements of Operations for the Years Ended September
30, 1996 and 1995                                                               F - 4

Consolidated Statements of Changes in Shareholders' Equity for the
Two Years in the Period Ended September 30, 1996                                F - 5

Consolidated Statements of Cash Flows for the Years Ended September
30, 1996 and 1995                                                               F - 6

Notes to Consolidated Financial Statements                                      F - 7
</TABLE>

                                                              F-1
<PAGE>



INDEPENDENT AUDITORS' REPORT



To The Shareholders
Multimedia Concepts International, Inc.
New York, New York



We  have  audited  the  consolidated   balance  sheets  of  Multimedia  Concepts
International,  Inc. and  subsidiaries as of September 30, 1996 and 1995 and the
related  consolidated  statements  of  operations,  cash  flows and  changes  in
shareholders'  equity for the years then ended.  These financial  statements are
the responsibility of the Company's management.
 Our responsibility is to express an opinion on these financial statements based
on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Multimedia Concepts
International,  Inc. and subsidiaries as of September 30, 1996 and 1995, and the
results  of its  operations  and its cash  flows for the years  then  ended,  in
conformity with generally accepted accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
the Company  will  continue  as a going  concern.  As shown in the  consolidated
financial statements,  the Company has experienced  significant operating losses
since  inception  and has  realized a negative  gross  profit for the year ended
September 30, 1996. In addition,  as of September 30, 1996,  the Company  ceased
operations in its operating





<PAGE>



subsidiaries and terminated its financing  arrangements with such  subsidiaries.
These factors and others (as discussed in Note 3) raise  substantial doubt about
the Company's ability to continue as a going concern. The consolidated financial
statements do not include any  adjustments  relating to the  recoverability  and
classification  of  recorded  assets,  or  the  amounts  and  classification  of
liabilities  that might be necessary in the event the Company cannot continue in
existence.

LAZAR, LEVINE & COMPANY LLP

New York, New York
January 24, 1997


                                                             F-2

<PAGE>

<TABLE>
<CAPTION>


            Multimedia Concepts International, Inc. And Subsidiaries
                           Consolidated Balance Sheets

                                    -ASSETS-
                                                                                For the Year Ended
                                                                                September 30,

                                                                                1996           1995
                                                                                ------------------------
<S>                                                                             <C>            <C>
CURRENT ASSETS:
    Cash and cash equivalents (Note 2c)                                         $491,262       $2,207
    Accounts receivable - net of allowances for doubtful accounts of $0
        and $14,921 for 1996 and 1995, respectively (Notes 2c and 10)           1,191,510      603,715
    Inventories (Note 2f)                                                       38,090         1,785,189
    Loans and advances - affiliates (Note 4a)                                   450,815        -
    Loan receivable - officer (Note 5)                                          1,470,141      257,222
    Prepaid expenses and other current assets                                   -              29,500
                                                                                ------------   -------------

TOTAL CURRENT ASSETS                                                            3,641,818      2,677,833
                                                                                ------------   -----------

FIXED ASSETS (Note 2g):
    Furniture and fixtures                                                      11,547         11,547
    Machinery and equipment                                                     17,814         17,814
                                                                                -------------- -------------
                                                                                29,361         29,361
    Less: accumulated depreciation                                              10,912         5,040
                                                                                -------------- --------------
                                                                                18,449         24,321
                                                                                -------------- -------------

OTHER ASSETS:
    Investment in convertible preferred stock (Notes 2n and 6)                  3,696,490      -
    Advances to equity investee (Note 4b)                                       120,000        -
    Due from affiliate (Note 4c)                                                320,000        -
    Security deposits                                                           -              34,684
    Deferred offering costs                                                     -              145,000
    Cost in excess of net assets acquired - net of accumulated amortization
    (Note 2h)                                                                   -              26,667
                                                                                -------------  -------------

                                                                                4,136,490      206,351
                                                                                ------------   ------------

                                                                                $7,796,757     $2,908,505
                                                                                ============   ==========

                    - LIABILITIES AND SHAREHOLDERS' EQUITY -
CURRENT LIABILITIES:
    Accounts payable                                                            $286,066       $502,298
    Accrued expenses and other liabilities                                      37,029         64,788
    Payroll taxes withheld and payable (Note 3)                                 18,988         -


TOTAL CURRENT LIABILITIES                                                       342,083        567,086
                                                                                -------------  ------------

LONG-TERM DEBT PAYABLE TO AFFILIATE (Note 4d)                                   -              989,500
                                                                                -------------- ------------

MINORITY INTEREST IN SUBSIDIARY (Note 7)                                        -              -


COMMITMENTS AND CONTINGENCIES (Notes 10, 11 and 12)

SHAREHOLDERS' EQUITY (Notes 8 and 9):
    Common stock, $.001 par value;  10,000,000 shares authorized,  3,005,000 and
        2,085,000 shares issued and outstanding at
        September 30, 1996 and 1995, respectively                               3,005          2,085

<PAGE>



    Additional paid-in capital                                                  13,102,005     1,909,315
    Retained earnings (deficit)                                                 (2,429,109)    (559,481)
    Unrealized loss on investment (Note 2n)                                     (3,221,227)    -
                                                                                ------------   ------------

                                                                                7,454,674      1,351,919
                                                                                ------------   -----------
                                                                                $7,796,757     $2,908,505
                                                                                ============   =========
    The accompanying notes are an integral part ofthese financial statements.
</TABLE>

                                       F-3





<PAGE>


<TABLE>
<CAPTION>

            Multimedia Concepts International, Inc. And Subsidiaries
                      Consolidated Statements Of Operations



                                                                                For the Year Ended
                                                                                September 30,
                                                                                1996                1995
                                                                                ----------------    ----------
<S>                                                                             <C>                 <C>
NET SALES (Note 10)                                                             $5,727,320          $7,053,271

COSTS AND EXPENSES:
    Cost of sales                                                               6,400,272           6,482,753
    Operating expenses                                                          1,273,908           944,874
                                                                                7,674,180           7,427,627

(LOSS) FROM OPERATIONS                                                          (1,946,860)         (374,356)

OTHER INCOME (EXPENSE):
    Interest expense                                                            (11,070)            -
    Interest and other income                                                   88,302              558
                                                                                77,232              558

(LOSS) BEFORE MINORITY INTERESTS                                                (1,869,628)         (373,798)

    Minority interests (Note 7)                                                 -                   -

(LOSS) BEFORE PROVISION (CREDIT)
    FOR INCOME TAXES                                                            (1,869,628)         (373,798)

    Provision (credit) for income taxes (Note 2j)                               -                   -

NET (LOSS)                                                                      $(1,869,628)        $(373,798)

(LOSS) PER COMMON SHARE (Note 2k)                                               $(.69)              $(.21)


WEIGHTED AVERAGE NUMBER OF
    COMMON SHARES OUTSTANDING (Note 2k)                                         2,694,973           1,801,562



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




                                       F-4



<PAGE>

            Multimedia Concepts International, Inc. And Subsidiaries
            Consolidated Statement Of Changes In Shareholders' Equity
<TABLE>
<CAPTION>

                                   Common Stock             Additional          Retained            Unrealized
                                   Shares         Amount    Paid-in             Earnings            Loss on
                                                            Capital             (Deficit)           Investment          Total
<S>                                <C>            <C>       <C>                 <C>                 <C>                 <C>
Balance at October 1, 1994         1,800,000      $1,800    $399,100            $(185,683)          $-                  $215,217

Issuance of shares of common stock
in exchange for reduction in loan
payable (Note 8)                   285,000        285       1,510,215           -                   -                   1,510,500

Net loss for the year ended
    September 30, 1995             -              -         -                   (373,798)           -                   (373,798)


Balance at September 30, 1995      2,085,000      2,085     1,909,315           (559,481)           -                   1,351,919

Shares sold in initial
public offering (Note 8)           920,000        920       3,942,690           -                   -                   3,943,610

Exercise of common stock
purchase warrants (Note 6)         -              -         7,250,000           -                   -                   7,250,000

Unrealized loss on investment
(Note 2N)                          -              -         -                   -                   (3,221,227)         (3,221,227)

Net loss for the year ended
    September 30, 1996             -              -         -                   (1,869,628)         -                   (1,869,628)


BALANCE AT SEPTEMBER 30,
    1996                           3,005,000      $3,005    $13,102,005         $(2,429,109)        $(3,221,227)        $7,454,674

</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                                               F-5



<PAGE>



            Multimedia Concepts International, Inc. And Subsidiaries
                      Consolidated Statements Of Cash Flows
<TABLE>
<CAPTION>
                                                                                For the Year Ended
                                                                                September 30,

                                                                                1996           1995
                                                                                -----------    ----------
<S>                                                                             <C>            <C>    
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH FLOWS FROM OPERATING ACTIVITIES:
    Net (loss)                                                                  $(1,869,628)   $(373,798)
    Adjustments to reconcile net (loss) to net cash (used for) provided
        by operating activities:
            Allowance for doubtful accounts                                     -              10,921
            Depreciation of fixed assets                                        5,872          5,040
            Amortization of excess of costs over net assets acquired            26,667         2,000
    Change in assets and liabilities:
        (Increase) decrease in accounts payable                                 (587,795)      1,115,249
        Decrease (increase) in inventories                                      1,747,099      (515,000)
        Decrease (increase) in prepaid expenses and other current assets        29,500         (19,500)
        (Decrease) in accounts payable                                          (216,232)      (129,609)
        (Decrease) increase in accrued expenses and other liabilities           (8,771)        40,428
        Decrease (increase) in other assets                                     34,684         (14,684)
                                                                                -------------- -----------
        Net cash (used for) provided by operating activities                    (838,604)      121,047


CASH FLOWS FROM INVESTING ACTIVITIES:
    Loans to officers                                                           (880,636)      -
    Advances to affiliates                                                      (770,815)      (257,222)
    Advances to equity investee                                                 (120,000)      -
    Purchases of fixed assets                                                   -              (28,497)

    Net cash (used for) investing activities                                    (1,771,451)    (285,719)


CASH FLOWS FROM FINANCING ACTIVITIES:
    Net proceeds from sale of common stock and warrants                         4,088,610      -
    Expenses associated with initial public offering                            -              (145,000)
    Loans received from (repaid to) affiliate                                   (989,500)      290,546

    Net cash provided by financing activities                                   3,099,110      145,546

NET INCREASE (DECREASE) IN CASH AND
    CASH EQUIVALENTS                                                            489,055        (19,126)

    Cash and cash equivalents, at beginning of year                             2,207          21,333

CASH AND CASH EQUIVALENTS, AT END OF YEAR                                       $491,262       $2,207
SUPPLEMENTAL INFORMATION:
    Taxes paid                                                                  $-             $-
    Interest paid                                                               -              -
</TABLE>

   The accompanying notes are an integral part of these financial statements.
                                       F-6
<PAGE>
            Multimedia Concepts International, Inc. And Subsidiaries
                   Notes To Consolidated Financial Statements




NOTE   1   -     DESCRIPTION OF COMPANY:

     Multimedia  Concepts  International,  Inc.  (the " Company")  is a Delaware
corporation  which  was  organized  in  June  1994  under  the  name  U.S.  Food
Corporation. The Company changed its name to American Eagle Holdings Corporation
in  April  1995 and then to its  present  name in June  1995.  The  Company  was
initially  formed as a holding  company for the purpose of forming an integrated
clothing  design,  manufacturing  and distribution  operation.  In June 1994 the
Company acquired 55% of the outstanding shares of common stock of American Eagle
Industries,  Corp.,  which acquired 100% of the outstanding  shares of Match II,
Inc. The Company also acquired 34% of the issued and  outstanding  capital stock
of Multi Media Publishing Corp. in June 1995.

     American Eagle Industries Corp.  ("American  Eagle") designs,  manufactures
and markets sportswear,  principally to large chain and discount stores. In June
1994,  American  Eagle  acquired  100% of  Match  II,  Inc.  (see  Note  2h),  a
manufacturer  and  distributor of ladies'  sportswear to boutiques and specialty
stores, in a transaction accounted for a purchase.

     In May of 1996,  the Company  formed a new  subsidiary,  Video On-Line USA,
Inc., in order to pursue a certain  acquisition.  No  acquisition  agreement was
ever entered into and this subsidiary is currently inactive.

     In December 1996,  subsequent to the balance sheet date, the Company held a
special  meeting  of its  shareholders  who  authorized  the  Company to sell or
dispose of its shares in American Eagle  Industries  Corp.  (and its' subsidiary
Match II) or effect  the  dissolution  thereof.  These  subsidiaries  had ceased
operations as of September 30, 1996.  In December  1996, in accordance  with the
vote of its  stockholders,  the Company  terminated  its  financing and business
relationships with these subsidiaries.

     In December 1996, the  shareholders  also authorized the Company to dispose
of its 34%  interest in an  unconsolidated  subsidiary,  Multi Media  Publishing
Corp. (see also Note 4b) which has no revenues or operations.  In December 1996,
in accordance  with the vote of its  stockholders,  the Company  terminated  all
business  relationships  with this  entity  but  intends  to seek the  return of
certain funds it has advanced.

                                      F-7
<PAGE>

     Multimedia   Concepts   International,   Inc.  And  Subsidiaries  Notes  To
Consolidated Financial Statements


     In January 1997, the Company  formed a new  wholly-owned  subsidiary,  U.S.
Apparel Corp.,  which company will design and manufacture a line of T-shirts and
other tops, predominately for men. The Company hopes to begin operations through
this subsidiary in early 1997.




NOTE   2   -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

        (a)      Principles of Consolidation:

     The consolidated  financial  statements  include the accounts of Multimedia
Concepts International, Inc., its subsidiary American Eagle Industries Corp. and
its subsidiary Match II, Inc. (see Note 1). All material  intercompany  balances
and transactions have been eliminated in consolidation.

        (b)      Use of Estimates:

     In preparing  financial  statements in accordance  with generally  accepted
accounting principles, management makes certain estimates and assumptions, where
applicable,  that  affect the  reported  amounts of assets and  liabilities  and
disclosures  of contingent  assets and  liabilities at the date of the financial
statements,  as well as reported  amounts of revenues  and  expenses  during the
reporting  period.  While  actual  results  could  differ from those  estimates,
management does not expect such  variances,  if any to have a material effect on
the financial statements.

        (c)      Concentration of Credit Risk:

     Financial instruments that potentially subject the Company to concentration
of credit risk consist principally of cash and accounts receivable.

     The Company  maintains at times,  deposits in federally  insured  financial
institutions  in excess of  federally  insured  limits.  Management  attempts to
monitor the soundness of the financial  institutions  and believes the Company's
risk is negligible.

     Accounts  receivable  potentially  exposes the Company to  concentration of
credit risk, as defined by Statement of Financial  Accounting  Standards No. 105
"Disclosure of Information  about Financial  Instruments with  Off-Balance-Sheet
Risk and Financial Instruments with Concentration of Credit Risk".

        (d)      Fair Value of Financial Instruments:

     The  carrying  amount of the  Company's  financial  instruments,  primarily
consisting of cash,  accounts  receivable and accounts payable approximate their
fair value.

        (e)      Cash and Cash Equivalents:

     For purposes of the  statements  of cash flows,  the Company  considers all
highly liquid investments purchased with a remaining maturity of three months or
less to be cash equivalents.

                                      F-8


<PAGE>

            Multimedia Concepts International, Inc. And Subsidiaries
                   Notes To Consolidated Financial Statements




NOTE   2   -     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

        (f)      Inventories:

     Inventories are stated at the lower of cost,  (first-in,  first-out  (FIFO)
method),  or market.  Finished goods and  work-in-process  are valued at average
cost of production which includes material, labor and manufacturing expenses.

     Inventories consisted of the following:
<TABLE>
<CAPTION>

                                                                           September 30,
                                                                      1996                1995
                                                                      --------            ----------
<S>                                                                   <C>                 <C>


Raw materials                                                         $30,000             $1,642,374
Work-in-process                                                       -                   69,544
Finished goods                                                        8,090               73,271
                                                                      ---------           -------------
                                                                      $38,090             $1,785,189
</TABLE>


        (g)      Fixed Assets and Depreciation:

     Property and equipment are recorded at cost.  Depreciation and amortization
are computed using the  straight-line  method over the estimated useful lives of
the asset which generally range from three to seven years.

        (h)      Excess of Costs Over Net Assets Acquired:

     In June 1994,  American  Eagle  acquired  Match II, Inc.  (see Note 1). The
total  cost of the  acquisition,  $50,000,  exceeded  the fair  value of the net
assets acquired by $30,000. This excess was assigned to goodwill to be amortized
over 15 years on a straight-line basis. Accumulated amortization as of September
30,  1995  aggregated  $3,333,  and  amortization  expense  for the  year  ended
September 30, 1995,  aggregated $1,000.  Prior to the acquisition,  Match II had
not conducted any  significant  operations.  As of September 30, 1996,  Match II
ceased  operations.  Accordingly,  the Company  has  written off the  remaining,
unamortized balance of goodwill to operations.

        (i)      Revenue Recognition:

     The Company and its subsidiaries  recognize revenue when finished goods are
shipped to customers.


                                      F-9

<PAGE>

            Multimedia Concepts International, Inc. And Subsidiaries
                   Notes To Consolidated Financial Statements




NOTE   2   -           SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

        (j)      Income Taxes:

     The Company  accounts  for income  taxes in  accordance  with  Statement of
Financial  Accounting  Standards No. 109,  "Accounting  for Income Taxes," which
requires  the use of the  "liability  method" of  accounting  for income  taxes.
Accordingly,   deferred  tax  assets  and  liabilities,   when  recognized,  are
determined  based on the  difference  between the financial  statements  and tax
bases of assets and liabilities,  using enacted tax rates in effect for the year
in which the differences are expected to reverse.

     The Company has available at September 30, 1996 and 1995,  unused operating
loss carry forwards of approximately $2,400,000 and $550,000, respectively which
may be applied against future taxable income expiring in various years beginning
after 2008.  Since there is no assurance  that the Company will generate  future
taxable  income  to  utilize  the  deferred  tax  asset  resulting  from its net
operating  loss carry  forwards and other timing  differences,  a 100% valuation
allowance has been provided as of September 30, 1996 and 1995.

        (k)      Earnings (Loss) Per Share:

     Earnings  (loss) per share has been  computed on the basis of the  weighted
average number of common shares and common equivalent shares  outstanding during
each period  presented.  Common stock  equivalents  have been  excluded from the
computation since the results would be anti-dilutive.

        (l)      Reclassifications:

     Certain  reclassifications  were made to the 1995  financial  statements to
conform to the current  period's  presentation.  The  reclassifications  have no
effect  upon the  Company's  financial  position  or  results of  operations  as
previously reported.

        (m)      Accounting Changes:

     As permitted by SFAS 123,  Accounting for Stock-Based  Compensation,  which
becomes  effective for the Company as of October 1, 1996,  and which  encourages
companies to record  expense for stock  options and other  stock-based  employee
compensation awards based on their fair value at date of grant, the Company will
continue to apply its current  accounting  policy  under  Accounting  Principles
Board  Opinion No. 25 and will include the necessary  disclosures  in its fiscal
1997 financial statements.

                                      F-10


<PAGE>

            Multimedia Concepts International, Inc. And Subsidiaries
                   Notes To Consolidated Financial Statements


NOTE   2  -      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

        (n)      Investment in Preferred Stock:

     The Company has reflected its' investment in convertible preferred stock in
accordance  with SFAS No. 115 - Accounting  for Certain  Investments in Debt and
Equity  Securities.   This  standard  requires  that  certain  debt  and  equity
securities  be  adjusted  to fair  value at the end of each  accounting  period.
Unrealized  gains  or  losses  for  securities  treated  as  available  for sale
securities   are  to  be  charged  or  credited  to  a  separate   component  of
shareholders' equity,. Accordingly, the Company has reflected an unrealized loss
on the fair value of its investment in convertible preferred stock,  aggregating
$3,221,227, as of September 30, 1996.


NOTE   3   -           GOING CONCERN UNCERTAINTY:

     The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles,  which contemplate continuation of the
Company as a going  concern.  However,  the  Company has  sustained  substantial
operating  losses since  inception,  has realized  negative gross margins on the
products it has sold, and as of September 30, 1996 ceased  operations in both of
its operating  subsidiaries and terminated all financing of these  subsidiaries.
Further,  the Company has been late in  remitting  certain  payroll  withholding
taxes.

     In  view  of the  above  mentioned  matters,  the  Company's  existence  is
dependent upon  establishing  new  operations  which in turn is dependent on the
Company's ability to meet its future  obligations and the success of such future
operations.  Management  of the Company  believes that actions  presently  being
taken,  as  discussed  below,  will provide the  opportunity  for the Company to
continue in existence.

     Subsequent to the balance sheet date, in January 1997, the Company formed a
new  subsidiary  which  will  take  over  the  operations  of one of the  former
subsidiaries.  Although there can be no assurance,  management believes that the
new  subsidiary  can conduct  its  business  at a lower cost of  operations.  In
addition,  during January 1997,  this  subsidiary  received  orders  aggregating
approximately  $600,000 in sales and also  received a vendor  number  which will
allow them to do business with a significant discount chain store.


NOTE   4   -           RELATED PARTY TRANSACTIONS:

        (a)      Loans and Advances - Affiliate:

     As  of  September   30,  1996,   the  Company  had  advanced  to  Hollywood
Productions,  Inc., an entity in which a relative of the Chief Executive Officer
of the  Company  is an  officer  and  director,  $450,815  which  advances  were
non-interest bearing. These advances were repaid subsequent to the balance sheet
date.

                                      F-11
<PAGE>

        (b)      Advances to Equity Investee:

     The  Company  owns 34% of the issued and  outstanding  stock of Multi Media
Publishing Corp., ("MMP"), a development stage company with no operations. As of
September  30,  1996,  the Company had  advanced  $120,000  to this  entity.  In
December 1996,  subsequent to the balance sheet date, the Company terminated its
relationship with MMP and has requested that all funds advanced be returned. See
also Note 1.

        (c)      Due From Affiliate:

     As of September  30,  1996,  Mister Jay Fashions  International,  Inc.,  an
entity in which the chief operating officer of the Company is the President, was
indebted to the Company in the  aggregate  amount of  $320,000.  The Company has
agreed to not request repayment of such amount until after October 1, 1997. This
loan bears interest at an annual rate of 8%.

        (d)      Long-Term Debt Payable to Affiliate:

     On September  28, 1995,  an affiliate to whom the Company owed  $2,500,000,
agreed to  convert a portion of this  receivable  to equity in the  Company.  In
exchange for a reduction of $1,510,500 in the amount it owed the affiliate,  the
Company  agreed to issue  285,000  shares of common stock at $5.00 per share and
570,000  redeemable common stock warrants at $.15 per warrant.  These prices are
the same as the price offered to the public in an initial  public  offering (see
Note 8).

     This debt,  on which  interest was being  charged at an annual rate of 10%,
was repaid during the year ended September 30, 1996.


NOTE   5   -           LOANS RECEIVABLE - OFFICER:

     As of September 30, 1996,  the chief  executive  officer of the Company was
indebted to the Company in the  aggregate  amount of  $1,470,141,  which loan is
repayable  on  demand  and bears  interest  at an  annual  interest  rate of 8%.
Subsequent  to the balance  sheet date,  the officer  repaid  $1,137,858 of this
loan,  leaving a balance of  $332,283.  This  remaining  balance  will be repaid
during the fiscal year ended September 30, 1997.



NOTE   6   -           INVESTMENT IN PREFERRED STOCK:

     In connection with an employment  agreement  entered into with an executive
officer,  in May 1996 the Company  granted an option to such  officer to acquire
2,900,000 common stock purchase warrants at a price of $2.50 per warrant (market
value), payable either in cash or


<PAGE>



     other  securities.  Since the  warrants  were  issued at market  value,  no
compensation  was  reflected.  As of May 1996,  the officer had purchased  these
warrants  with  payment  being made  through the  transfer of 528,000  shares of
convertible  preferred stock in another publicly traded company, Play Co. Toys &
Entertainment  Corp. The Company had valued this preferred  stock at $6,917,717,
the  deemed  fair  value  based  upon  such   factors  as   dilution,   lack  of
marketability,  etc. This  investment has been reflected as a non-current  asset
based upon the intent of management.  F-12 (See Note 2n concerning write-down of
available for sale securities to fair value at September 30, 1996).


NOTE   7   -           MINORITY INTEREST IN SUBSIDIARY:

     The Company owns 55% of American Eagle Industries Corp. As of September 30,
1996, losses applicable to the minority  shareholders exceeded their interest in
American  Eagle,  which was  reduced to zero,  and as such,  excess  losses were
charged against the operations of the Company.  Future earnings  attributable to
the minority  interest in American  Eagle, if any, will first be credited to the
operations of the Company, to the extent that such excess losses were previously
absorbed by the Company. American Eagle began operations in April 1994 (see Note
1 re: cessation of operations).


NOTE   8   -           COMMON STOCK:

                 As of October 1, 1994,  the  Company  had  1,800,000  shares of
common stock outstanding.

     In September  1995,  the Company  issued  285,000 shares of common stock at
$5.00  per  share and  570,000  redeemable  common  stock  warrants  at $.15 per
warrant,  in  exchange  for a  reduction  of  $1,510,500  in a loan  owed  to an
affiliate (see Note 4d).

     In  January  1996,  the  Company,  through  its  underwriter,  successfully
completed  an  initial  public  offering  of  920,000  shares  of  common  stock
(including  the  underwriter's  over  allotment)  at a price of $5.00 per share,
together with two warrants for each share,  at a price of $.15 per warrant.  The
net  proceeds  to the  Company  from the sale of the common  stock and  warrants
offered,  after  deducting  underwriting  discounts  and  commissions  and other
expenses of the offering were approximately $3,944,000.

     In May, 1996, the chief executive  officer  exercised an option to purchase
2,900,000  common stock purchase  warrants at a price of $2.50 per warrant.  See
also Note 6.


NOTE   9   -           STOCK OPTION PLAN:

     In June,  1995, the board of directors  adopted the 1995 Senior  Management
Incentive Plan (the "Management Plan"),  which was approved by the shareholders.
The  Management  Plan  provides for the issuance of up to 150,000  shares of the
Company's common stock in

                                      F-13

<PAGE>

     connection  with the  issuance of stock  options  and other stock  purchase
rights to executive officers and other key employees.  Options granted under the
Management Plan may be either  incentive stock options ("ISOs") or options which
do not qualify as ISOs  ("non-ISOs").  ISOs may be granted at an option price of
not less than 100% of the fair market  value of the common  stock on the date of
grant,  except  that  an ISO  granted  to any  person  who  owns  capital  stock
representing  more than 10% of the total combined voting power of all classes of
common  stock of the Company,  must be granted at an exercise  price of at least
110% of the fair market value of the common stock on the date of the grant.  The
exercise  price of the non-ISOs may be less than 85% of the fair market value of
the common stock on the date of grant. As of September 30, 1996, the Company had
granted  options to purchase  75,000 shares of common stock at an exercise price
of $8.75 per share.


NOTE   10  -           ECONOMIC DEPENDENCY:

     For the years ended September 30, 1996 and 1995,  approximately  95% of the
Company's sales was to one individual  customer.  Accounts  receivable from this
customer  was  $1,191,510  and  $556,951  as of  September  30,  1996 and  1995,
respectively.


NOTE   11  -           LEGAL PROCEEDINGS:

     In November 1996, a judgment was entered against  American Eagle Industries
Corp., in favor of Congress Talcott  Corporation,  ("congress") in the amount of
$151,204  plus  interest.  This judgment was the result of a dispute of accounts
payable owed to a vendor.

     In  January  1997,  this  amount  was  paid in full  and the  judgment  was
therefore satisfied.


NOTE   12  -           COMMITMENTS AND CONTINGENCIES:


        (a)      Leases:

     The Company and its subsidiaries lease office, showroom and warehouse space
under  non-cancelable  operating leases which expire in June 1997. The lease for
the warehouse also provides for escalation  charges and other  occupancy  costs.
Rental  expense for the years  ended  September  30,  1996 and 1995,  aggregated
$172,646 and $83,777, respectively.


     In accordance  with the  termination  of  operations of American  Eagle and
Match II, (see Note 1), the Company's only  continuing  lease  obligation is for
office and  warehouse  space in New York at $36,000  per year  through  December
1998.

<PAGE>

        (b)      Consulting Agreements:

     In October 1994, the Company  entered into separate  consulting  agreements
with two individuals to provide design,  sales and marketing  advisory services.
These  agreements,  which provide for annual aggregate  compensation of $260,000
(payable  weekly)  were to remain in force  until  terminated  by either  party.
Effective August 1, 1995,  these  agreements were  terminated.  The Company then
began  paying  a  corporate  entity  formed  by the  same  individuals  who were
previously consultants on a weekly basis for these consulting services at a rate
of $5,000 per week.  These  payments  were  discontinued  with the  cessation of
operations of American Eagle and Match II (see Note 1).


                                      F-15
<PAGE>
             Multimedia Concepts International, Inc And Subsidiaries
                                   Exhibit 27
                             Financial Data Schedule
                           Article 5 Of Regulation S-X



The  schedule  contains  summary  financial   information   extracted  from  the
consolidated  financial  statements for the year ended September 30, 1996 and is
qualified in its entirety by reference to such statements.

<TABLE>
<CAPTION>
              <S>                                                                        <C>
              Period type                                                                12 Mos.
              Fiscal year end                                                            September 30, 1996
              Period start                                                               October 1, 1995
              Period end                                                                 September 30, 1996
              Cash                                                                       491,362
              Securities                                                                 0
              Receivable                                                                 1,191,510
              Allowances                                                                 0
              Inventory                                                                  38,090
              Current assets                                                             3,641,818
              PP&E                                                                       29,361
              Depreciation                                                               10,912
              Total assets                                                               7,796,757
              Current liabilities                                                        342,083
              Bonds                                                                      0
              Common                                                                     3,005
              Preferred mandatory                                                        0
              Preferred                                                                  0
              Other SE                                                                   7,451,669
              Total liability and equity                                                 7,796,767
              Sales                                                                      5,727,320
              Total revenues                                                             5,727,320
              CGS                                                                        6,400,272
              Total costs                                                                6,400,272
              Other expenses                                                             0
              Loss provision                                                             0
              Interest expense                                                           11,070
              Income pretax                                                              (1,869,628)
              Income tax                                                                 0
              Income continuing                                                          (1,869,628)
              Discontinued                                                               0
              Extraordinary                                                              0
              Changes                                                                    0
              Net income                                                                 (1,869,628)
              EPS primary                                                                (.69)
              EPS diluted                                                                (.69)
</TABLE>

                                                            F-16

<PAGE>