FORM 10-KSB - ANNUAL REPORT

(Mark One)

         [x]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934
                          For the fiscal year ended March 31, 1998

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

                For the transition period from        to       

                        Commission file number  0-18184 

                           SK TECHNOLOGIES CORPORATION                 
                (Name of small business issuer in its charter)

                Delaware                                52-1507455      
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                      Identification No.)

  500 Fairway Drive, Suite 104, Deerfield Beach, FL      33441  
       (Address of principal executive offices)         (Zip Code)

Issuer's telephone number    (954) 418-0101    

Securities registered pursuant to Section 12(b) of the Exchange
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                   
                        (Title of Class)

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

     Check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B contained in this form, and
no disclosure will be contained 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 other amendment to
this Form 10-KSB.    X  

     State the Issuer's revenues for its most recent fiscal year.

          $854,258 

     State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the
stock was sold, or the average bid and asked prices of such stock,
as of a specified date within 60 days. 

     The aggregate market value of the voting stock held by non-
affiliates of the Registrant at June 22, 1998 was $148,806.

     State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.

     As of June 22, 1998, 6,357,828 shares of Common Stock, par 
value $.001 per share, were issued and outstanding.


<PAGE>
                                   PART I

ITEM 1.  DESCRIPTION OF BUSINESS:

     SK Technologies Corporation, a publicly-held Delaware
corporation (the "Company") was incorporated in September 1986.  In
January 1989 the Company acquired SK Technologies Corp. which was
incorporated under the laws of the State of Florida in March 1985,
and the Company changed its name to SK Technologies Corporation. 
Prior to this acquisition, the Company had limited operations.

BUSINESS OF ISSUER

The Company's Products

     The Company is a developer of retail store management software
for the specialty retail industry.  The Company's StoreKare product
family is a modular system of information technology products,
which offer retailers an affordable, scalable, feature rich
application that runs in both Windows NT and DOS environments.  The
Company's goals are to continue to enhance our StoreKare product
with additional customer requested modifications and continue the
integration of StoreKare with new Windows products.

     The Company sold the StoreKare for Subway product to an
unrelated party in May 1997 and discontinued sales to Subway
Sandwich and Salads fast food restaurants.

     StoreKare

     The StoreKare Retail Management System  Version 3.3 operates
with Windows NT as well as MS-DOS operating systems and PC
platforms.  StoreKare provides a single screen user interface which
guides the user with high-lighted prompts and pop-up selections. 
Users can access standard or customized help screens with a single
function key.  The Point-Of-Sale module is the foundation of the
StoreKare system and features bar-code scanning, scale interface,
multiple tender types, major credit and debit card support,
discounts, mark-downs and mix and match pricing.  StoreKare data
can be accessed by Windows based application packages, such as
Crystal Report Writer, Microsoft Access and Microsoft Excel, by
using the StoreKare Open Data Base Connectivity Interface for
Windows add-on module.

     Other StoreKare modules available are, Purchasing and
Receiving, Sales and Profit Analysis, Layaways/Work Orders/Special
Orders, Deal Pricing, Dated Discounts, Time and Attendance, In-
House Accounts, Extended Payment Services, Third-Party Interface,
Report Generator and StoreAdministrator.  The StoreKare Point-Of-
Sale module currently has a suggested retail price of $1,195 and
the StoreAdministrator module has a suggested retail price of
$1,995.  Optional modules are offered at a suggested retail price
ranging from $100 to $715.  To date, approximately 1,350 StoreKare
Retail Management Systems have been shipped nationwide, of which
approximately 350 were shipped during fiscal 1998, through the
Company's reseller network and through direct sales by the
Company's regional sales managers.

Business Ventures

     Management believes that aligning the Company with one or more
major corporations will assist in the marketing of its products. 
The Company has entered into formal agreements and/or business
alliances with such major companies as ScanSource, International
Business Machines Corp. ("IBM"), Omron Systems of America, Inc.
("Omron") and CompuRegister, which management believes will
increase the Company's visibility in the point-of-sale industry and
expand its market share.  The Company believes that its StoreKare
family of products has fundamental features and functions desired
by many retailers in various segments of the retail industry and,
for this reason, it intends to continue to align itself with major
distribution companies.

     ScanSource

     ScanSource is the principal distributor for the IBM SureOne
and other IBM point-of-sale platforms and provides sales
development services on behalf of IBM, on the SureOne.  The Company
is an authorized independent software vendor ("ISV") and reseller
of the SureOne product and is an invited participant in all
ScanSource sponsored trade shows and lead development activities.

     IBM

     The Company has been authorized as a Personal Computer Value-
Added Reseller in May 1996 and is also an IBM Business Partner. 
The Company is also a participant in the IBM retail solutions
program which will provide the Company with access to IBM technical
information and new IBM hardware products prior to their release. 
The Company is a participant in an ongoing IBM lead generation
program, in which more than 100,000 retailers are targeted.  The
leads are distributed to IBM authorized resellers nationwide, that
are partnered with the Company and other software vendors.

     Omron

     The Company's relationship with Omron, pursuant to a May 1992
document of understanding which continues to be renewed annually,
consists primarily of marketing and distribution of StoreKare
products through the Omron reseller channel.  Omron, a provider of
hardware, offers a PC based terminal product with a retail style
keyboard designed for the small to medium sized retail merchant. 
The Company has access to new Omron hardware products prior to
their release which provides the opportunity for StoreKare to be
ported and offered as compatible with any newly released Omron DOS
based point-of-sale terminal.  During fiscal 1998, the StoreKare
products have been displayed at the Omron booth with the Company's
personnel in support, at many retail industry shows where Omron
exhibits its products.

     CompuRegister

     In April 1994, the Company entered into a Software Partner
Program with CompuRegister.  Through mailings and other
CompuRegister literature the Company expects that the StoreKare
products will be exposed to expanded markets.

Research and Development

     The Company continues to develop enhancements and add-on
features for its existing StoreKare product line and performs
maintenance work when necessary to maintain the high quality of the
product.  The Company also performs customized product development
and product enhancements on a customer funded contract basis for
chain store projects and end users.  A software development project
was performed to identify and resolve all occurrences of the year
2000 date handling within StoreKare.  The Company is currently
testing this year 2000 compliant product and expects the project to
be completed by  December 31, 1998.

     Research and development costs expensed in fiscal 1998 and
1997 were approximately $114,000 and $162,000, respectively.  The
Company capitalized development costs of approximately $160,000 and
$232,000 during fiscal 1998 and 1997, respectively.

     Typically, development cycles of software products are
lengthy, which results in an extended period of time between the
initiation  of a development project for a product and its
production of revenue.  During the development cycle of our
software products, features of the product are finalized,
specifications are developed, software code and support
documentation are written, and the product  (software and
documentation) is tested in the Company's test lab and then at
selected customer test sites.  Subsequently, the product goes
through the manufacturing process, resellers and the Company's
sales representatives receive product training, and the marketing
process then commences.

Inventory and Hardware

     The Company manufactures its software products on an "as
needed" basis and has never experienced any difficulty in its
software manufacturing process.  Due to the nature of the Company's
software products, orders are taken for currently available
products and reproduced to satisfy customer's orders.  There is no
backlog of orders since all orders are fulfilled as they are
received.

     The Company does not manufacture hardware. The Company
maintains a capital equipment inventory of terminals manufactured
by the major point-of-sale equipment manufacturers for testing its
products.  The Company obtains SureOne product and IBM PCs on a
"just in time" basis from ScanSource for resale to direct
customers.

Marketing

     The Company markets its products directly to retail store
chains using the IBM SureOne terminal, as well as through a
reseller network.  Resellers handle specific geographic regions and
provide technical expertise to their customers.  The Company
requires all resellers to attend a three day intensive training
class  which is offered to resellers at the Company's offices or at
the reseller's locations.  Additional programs for marketing and
technical support  are offered to resellers.

     The Company has also aligned itself with several major
corporations. Management believes that alliance agreements that the
Company has with such corporations as ScanSource, IBM, Omron and
CompuRegister will assist in the marketing of its products.

Service and Maintenance

     The Company's success in marketing its software is dependent
upon its ability to provide technical support services to its
resellers and users at a higher level of quality than the industry
standard and at reasonable rates.

     The Company warrants that the media on which software programs
are sold will be free from defects in materials and workmanship
under normal usage for 30 days from the date of delivery.  A
comprehensive user manual is provided with complete instructions
for operation of the StoreKare system.  The Company provides 9 hour
standard and 24 hour extended telephone support for its software. 


SK Credit Corporation

     The Company formed a wholly-owned subsidiary, SK Credit
Corporation ("SK Credit"), to offer financing to customers of the
Company.  SK Credit, which commenced operations in September 1990,
was primarily engaged in the financing of point-of-sale and other
value added computer systems developed by the Company to end users
who are franchisees and other multi-store business groups.  SK
Credit is inactive. 


Competition

     Management believes that the principal competitive factors in
its market are product performance, functionality and reliability,
price, user friendliness, product availability, service and
support, marketing and promotion.  Management of the Company
believes it competes favorably in all of these areas.  In addition,
management believes that, due to the rapid technological changes
and advances in the computer industry generally, and the segment
thereof in which the Company operates, another major competitive
factor in its market is the ability to achieve technological
advances and enhancements comparable to and competitive with those
made by others in such industry segment.  While the Company
believes that it presently competes favorably in this area and
intends to continue to do so, no assurances are given that the
Company will be able to adequately respond to product obsolescence
or effect advances in technology in a manner as to be commercially
feasible.  The Company's plan for addressing this competitive
factor is to utilize industry standard personal computer compatible
hardware, and to continue to modify the Company's products to
function on revised and/or replacement hardware of manufacturers
who are viewed as industry leaders and who command the greatest
market share in the point of sale industry.  Additionally, the
Company has estimated a three year life cycle for each version of
a product to be released by the Company.  The Company's plan also
includes developing on-going upgrades and enhancements (new
versions) to its products and releasing such upgrades and
enhancements to the market place on an ongoing basis.

     Since the Company's strategy is to provide software products
that function on industry standard operating systems (DOS and
Windows/NT), standard hardware (including but not limited to IBM,
Omron, and NCR manufactured hardware) and operate in a generic
point-of-sale environment, the Company is not dependent upon any
one hardware manufacturer or external application with one
exception.  That exception is the operating systems (DOS and
Windows/NT) which are owned by Microsoft Corporation ("Microsoft")
and sold directly by Microsoft, as well as, licensed by Microsoft 
to nearly all hardware manufacturers of IBM compatible computers. 
In view of the perceived stability of Microsoft, as well as, the
license rights provided to multiple hardware manufacturers,
management of the Company does not view this dependency on
Microsoft as a material factor to the continued success of the
Company's products.  

     The Company's principal competitors in the point-of-sale
market include, but are not limited to, ARS, CAM Data, Infocorp,
MicroBiz Corp., PSI, RTI, Salepoint, STS, Synchronics and Virtual
Systems.  Some of these competitors do not sell fully featured
point-of-sale systems.  While some of the Company's competitors
have substantially greater financial, personnel and technological
resources than the Company, management believes that its point-of-
sale products have several advantages over competing products,
including distributed communications capabilities and the support
of a wide variety of point-of-sale hardware products from various
manufacturers.  Additionally, in management's opinion the Company's
agreements and relationships with IBM and Omron, as well as its
other relationships give the Company a competitive edge in its
market.

Copyrights and Licenses

     The Company has not sought patent protection for its products
but seeks to maintain its proprietary rights by a combination of
copyright and trade secret protection.  The Company has obtained
statutory copyright protection for its Invisible Link and StoreKare
software, as well as federal trademark registration for its SK
Technologies and StoreKare names.

Personnel

     The Company currently employs 24 persons as follows: executive
officers (four persons), customer service (three persons), sales
and marketing (seven persons), programming and quality assurance
(six persons), administration and finance (two persons),
technicians (one person),and operations (one person). The Company
also engages the services of two technical writers as needed, on an
independent contractor basis.  The Company retains additional
sales, technical and customer support persons as it deems
necessary. 

     The Company is not a party to any collective bargaining
agreements and believes it has achieved harmonious employee
relations.

ITEM 2.   DESCRIPTION OF PROPERTY:

     The Company's principal executive offices are located at 500
Fairway Drive, Suite 104, Deerfield Beach, Florida 33441 where the
Company occupies 7,029 square feet of office space which is leased
from an unrelated entity, for $9,075 per month through January
1999, pursuant to a lease which expires January 31, 2002.  This
amount includes rent of $5,512 per month which will increase 4.5%
annually for the next three years and additional rent of
approximately $5 per square foot for the Company's allocated share
of expenses for 1998.  The expense allocation will be adjusted
annually.  This office space is suitable for the Company's current
needs.

ITEM 3.   LEGAL PROCEEDINGS

     On October 18, 1996 the Company filed a Demand for Arbitration
of a dispute arising out of a contract dated September 16, 1994
(the "Agreement") between the Company and Fujitsu-ICL Systems, Inc.
("ICL").  On February 27, 1996, ICL advised the Company of its
intention to terminate the Agreement and has failed to make the
payments due pursuant to the terms of the Agreement which total in
excess of $300,000.  A preliminary hearing is scheduled for August
18, 1998.


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

     None


<PAGE>
                             PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER
          MATTERS:

Market Information

     The Company's Common Stock is traded on the OTC Bulletin Board
under the symbol SKTC.  The following table sets forth the high and
low bid quotations for the Common Stock for the periods indicated. 
These quotations reflect prices between resellers and do not
include retail mark-ups, mark-downs or commissions and may not
necessarily represent actual transactions.

                                         Common Stock             
                                High                       Low     

April 1, 1996 -
 June 30, 1996                $ 0.8125                   $ 0.09375

July 1, 1996 -
 September 30, 1996           $ 0.3125                   $ 0.125

October 1, 1996 -
 December 31, 1996            $ 0.21875                  $ 0.1875

January 1, 1997 -
 March 31, 1997               $ 0.75                     $ 0.1875

April 1, 1997 -
 June 30, 1997                $ 0.375                    $ 0.125

July 1, 1997 -
 September 30, 1997           $ 0.125                    $ 0.125

October 1, 1997 -
 December 31, 1997            $ 0.40625                  $ 0.07

January 1, 1998 -
 March 31, 1998               $ 0.078125                 $ 0.03125

April 1, 1998 -
 June 22, 1998                $ 0.09375                  $ 0.0625

     On June 22, 1998, the closing bid price on the OTC Bulletin
Board of the Common Stock was $.0625

     As of June 22, 1998, Common Stock was held by approximately
500 shareholders of record.  The Company, however, believes that
the number of beneficial owners of its securities to be in excess
of such number.

     As of the date hereof, the Company has never declared or paid
cash dividends on its Common Stock.  As management of the Company
seeks growth and expansion of the Company's business through the
reinvestment of profits, if any, management does not anticipate the
Company will pay dividends in the foreseeable future.


<PAGE>
ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS:

General

     The Company is a developer of retail store management software
for the specialty retail industry.  The Company's StoreKare product
family is a modular system of information technology products,
which offers retailers an affordable, scalable, feature rich
application that runs in both Windows NT and DOS environments.  The
goal of the Company has been to offer such a product that a retail
store owner with limited computer experience could learn and use
without extensive training and support.  With the advancement of
the hardware technology (computers and cash registers) and
extensive reduction in cost, the small retailer can now afford a
complete business management system.

     Except for historical information contained herein, certain
matters set forth in this Form 10-KSB are forward looking and
involve a number of risks and uncertainties that could cause future
results to differ materially from these statements and trends. 
Such factors include but are not limited to, significant changes in
economic conditions, competition in the Company's markets, changes
in technology and the continued availability of funding from third
parties.

Impact of the Year 2000

     The Year 2000 Issue is the result of computer programs being
written using two digits rather than four to define the applicable
year.  Some of the Company's older computer programs that have time
sensitive software may recognize a date using "00" as the year 1900
rather than the year 2000.

     The Company has assessed the existing software and hardware in
use in all departments of the Company and has determined that a
minimal amount of modifications or replacements of software and
hardware will be required so that its computer systems will
function properly  with respect to dates in the year 2000 and
thereafter.  Other equipment and systems in use by the Company,
such as the voice mail/telephone system and alarm system, have been
tested and/or have been certified by the vendor to be year 2000
compliant.  The Company anticipates that the cost to be compliant
with the year 2000 will not be material during fiscal 1999 and
should not exceed $25,000.

     Year 2000 and StoreKare - StoreKare has been designed for use
in Point of Sale and Retail Management applications before, during
and beyond the year 2000.  In addition to the many new features
added to StoreKare since version 3.0, StoreKare 3.3.20 provides
complete Year 2000 date processing capability for StoreKare data. 
This date processing capability is summarized as follows:

     Enter and record dates in StoreKare records over  the  years 
       ranging from 1900 to 2259
     Use a 2 digit year short cut data entry sliding window for the 
       current date -80 or +20 years
     Handle calculations and sort records using dates that span the 
       range 1900 to 2259
     Recognize the year 2000 as a leap year
     Import and Export records with dates in either 2-digit or 4- 
       digit year representation
     Authorize and settle credit and debit cards that expire beyond 
       December 31, 1999
     Operate the StoreKare application over a date range of 1980 to 
       2099

All StoreKare 3.0C, 3.1 and 3.2 systems must be upgraded to
StoreKare 3.3.20 and all StoreKare 3.3 systems must be updated to
StoreKare 3.3.20 over the period July 1998 to December 1999 to
correctly process dated records across the 20th and 21st century
boundaries.

Liquidity and Capital Resources

     The Company sustained a net loss of $1,477,733 for the fiscal
year ended March 31, 1998.  The Company's cash decreased from
$103,316 at March 31, 1997 to $38,898 at March 31, 1998.  This was
mainly due to delays in collecting on certain direct sales that
were subsequently paid after year end.  The working capital
deficiency increased from $(4,267,106) at March 31, 1997 to
$(5,579,205) at March 31, 1998.  The increase in the working
capital deficiency was mainly due to the receipt of loans totaling
$923,500 during fiscal 1998 from two shareholders/directors of the
Company and their related entities and the accrued interest, on the
loans from these shareholders/directors, of $346,015 during fiscal
1998.

     At March 31, 1998 and 1997,  the Company's capitalized
expenditures for development were $927,901 and $892,326
respectively (accumulated amortization was $552,467 and $409,703 at
March 31, 1998 and 1997, respectively).  The Company capitalized
development costs of $160,458 and $232,271 during fiscal 1998 and
1997 respectively.  The Company, subject to the availability of
working capital, anticipates incurring a comparable amount of
development costs for the year ending March 31, 1999 as compared to
the development costs incurred during the year ended March 31, 1998
as the Company continues the development of a new StoreKare
Windows/NT based product.

     The Company's region managers are aggressively seeking to sell
and support the Company's products directly to specialty retail
store chains and continue to provide resellers with support,
training and the tools and incentives to sell the product on behalf
of the Company.  The Company plans to continue to complete
development projects currently in process and implement its plans
to develop new technology if financing is secured to meet the
Company's long term capital needs.  In May 1997 the Company sold
the Storekare for Subway software and related assets to an
unrelated party and discontinued sales to Subway Sandwich and
Salads fast food restaurants.

     Through March 31, 1998, the Company has incurred significant
operating losses and has a working capital deficiency.  During
fiscal 1998, the Company's principal source of funding was from
loans of $923,500 from two majority shareholders/directors of the
Company and their related entities.  These loans accrue interest at
10% per annum, $346,015  was accrued during fiscal 1998.  During
the period April 1, 1998 through May 13, 1998 the Company received
additional loans of $134,000 from these shareholders/directors and
their related entities.  Since March 1995 through May 13, 1998, the
Company has received monthly funding in the form of loans totalling
$4,075,500 from these shareholders/directors and related entities,
which are payable on demand.  These two shareholders/directors are
actively involved with management of the Company.  While no
assurances can be made, the Company believes that these
shareholders/directors and their related entities will continue to
fund the Company.  However, if additional funding is not obtained
from these shareholders/directors and their related entities, the
Company would have to seek other sources of funding of which none
have presently been identified, or the Company would have to
curtail operations and/or take other actions.  Based on these
conditions, doubt exists about the ability of the Company to
continue as a going concern.  The financial statements for the year
ended March 31, 1998 do not include adjustments relating to the
recoverability and classification of the recorded carrying value of
assets or the amounts or classifications of liabilities that might
be necessary should the Company be unable to continue as a going
concern.

Results of Operations

     For the years ended March 31, 1998 and 1997, the Company
reported a net loss of $1,477,733 and $1,596,166, respectively. 
Revenues for the years ended March 31, 1998 and 1997, were $854,258
and $801,483, respectively.

     Amortization of software development costs was $251,608 and
$207,042 for fiscal 1998 and 1997.  In addition, the Company
incurred and expensed, research and development costs of $114,106
and $162,211, to maintain and improve the existing versions of the
StoreKare products.

     Total selling, general and administrative expenses for fiscal
1998 decreased 11% from fiscal 1997.  This decrease was due to
reductions in consulting fees, costs for office space and related
overhead costs.  The Company anticipates that total selling,
general and administrative expenses will increase slightly during
fiscal 1999 as the Company continues to recruit additional
salespeople in various locations throughout the United States.

     The Company reported gross profit on installment sales of
$84,235 during fiscal 1998, from the sale of the StoreKare for
Subway software and related assets.  During fiscal 1999 and 2000,
the Company anticipates additional gross profit on this installment
sale of approximately $48,000 and $8,000, respectively, as the
remaining installment payments totalling $70,000 are received by
the Company.

     The Company incurred interest expense of $393,699 and $326,752
during fiscal 1998 and 1997 respectively.  This increase was due to
the increasing amount of interest, $346,015 and $249,777 for fiscal
1998 and 1997, respectively, accrued on the loans from two
shareholders/directors and their related entities.

Seasonality

     The Company believes that seasonality has not historically had
any material impact on its business.  However, during the winter
holiday season, retail businesses typically delay the installation
and/or purchase of any capital assets such as our StoreKare
products.

Inflation

     The Company believes the impact of inflation has historically
been and will continue to be minimal.


<PAGE>
ITEM 7.   FINANCIAL STATEMENTS
        
           SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                  Page
        
        
         Report of Independent Certified Public Accountants -
                 Ernst & Young LLP                                F-1
                                             
         Consolidated Balance Sheet 
                 March 31, 1998                                   F-2-3

         Consolidated Statements of Operations
                 Years Ended March 31, 1998 and 1997              F-4
        
         Consolidated Statements of Capital Deficiency
                 Years Ended March 31, 1998 and 1997              F-5
        
         Consolidated Statements of Cash Flows
                 Years Ended March 31, 1998 and 1997              F-6
        
         Notes to Consolidated Financial Statements
                 March 31, 1998 and 1997                          F-7-21 
 

<PAGE>
             Report of Independent Certified Public Accountants



The Board of Directors and Stockholders
SK Technologies Corporation

         We have audited the accompanying consolidated balance sheet of
SK Technologies Corporation and subsidiaries as of March 31, 1998
and the related consolidated statements of operations, capital
deficiency and cash flows for each of the two years in the period
ended March 31, 1998.  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 audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.  An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

         In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of SK Technologies Corporation and subsidiaries
at March 31, 1998 and the consolidated results of their operations
and their cash flows for each of the two years in the period ended
March 31, 1998 in conformity with generally accepted accounting
principles.

         The accompanying financial statements have been prepared
assuming that SK Technologies Corporation and subsidiaries will
continue as a going concern.  As more fully described in Note 13,
the Company has incurred recurring operating losses and has a
capital deficiency.  These conditions raise substantial doubt about
the Company's ability to continue as a going concern.  The
financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that may
result from the outcome of this uncertainty.


                                          ERNST & YOUNG LLP

West Palm Beach, Florida
May 15, 1998

                                   F-1


<PAGE>
          SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEET
                          MARCH 31, 1998

                              ASSETS



Current Assets:
  Cash                                               $   38,898
  Trade accounts receivable, net of
    allowance for doubtful accounts
    of approximately $37,000                             79,836
  Inventories                                            19,951
  Current portion of installment
    accounts receivable                                  60,000
                                                     ----------
     Total Current Assets                               198,685

Property and Equipment, Net                              82,131

Other Assets:
  Software development costs, net
    of accumulated amortization
    of $552,467                                         375,434
  Other, net                                             22,992
  Installment accounts receivable,
    less current portion                                 10,000

                                                     ----------
    Total Other Assets                                  408,426
                                                     ----------
                                                     $  689,242
                                                     ==========
















                      (Continued on following page.)

                                   F-2


<PAGE>
              SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEET (CONT'D)
                              MARCH 31, 1998


                 LIABILITIES AND CAPITAL DEFICIENCY


Current Liabilities:
  Accounts payable                                   $   86,921
  Accrued expenses                                      119,360
  Due to shareholders/officers/directors              1,485,691
  Current portion of capital lease obligations           22,296
  Loans payable shareholders/directors                3,941,500
  Deferred income                                       122,122
                                                     ----------
    Total Current Liabilities                         5,777,890

Notes payable to shareholder                            400,000

Deferred gross profit on installment sale                56,157

Capital lease obligations, less current portion           3,935

Capital Deficiency:
  Convertible Preferred Stock, $.001 par
    value, 5,000,000 shares authorized,
    1,000,000 shares designated as
    convertible Series B Preferred Stock,
    of which 454,399 is issued and
    outstanding                                             454
  Common Stock, $.001 par value, 25,000,000
    shares authorized, 6,357,828 shares
    issued and outstanding                                6,358
  Additional paid-in capital                         12,117,031
  Accumulated deficit                               (17,672,583)
                                                     ----------
     Capital Deficiency                              (5,548,740)
                                                     ----------
                                                     $  689,242
                                                     ==========










                              See accompanying notes.

                                        F-3


<PAGE>
                 SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                       YEARS ENDED MARCH 31, 1998 AND 1997


                                                1998               1997
        
Revenues:
  Equipment, software sales and             $   854,258        $   801,483
    support

Cost of Revenues:
  Cost of equipment sold                        129,882             85,321
  Amortization of software
    development costs                           251,608            207,042 
  Research and development expense              114,106            162,211
                                            -----------        -----------
                                                495,596            454,574
                                            -----------        -----------
                                                358,662            346,909 

Selling, General and Administrative
Expenses:
  Compensation and payroll taxes              1,078,447          1,013,227
  Other selling, general and
    administrative expenses                     445,854            705,262  
                                            -----------        -----------
                                              1,524,301          1,718,489
                                            -----------        -----------
Operating loss                               (1,165,639)        (1,371,580)

Other (Expenses) Income:
  Gross profit on installment sale               84,235                  -
  Interest expense                             (393,669)          (326,752)
  Other, net                                     (2,660)           102,166
                                            -----------        -----------
    Total Other Expenses                       (312,094)          (224,586)
                                            -----------        -----------
Net loss                                    $(1,477,733)       $(1,596,166)
                                            ===========        ===========
Basic Loss Per Common Share                 $      (.23)       $      (.26)
                                            ===========        ===========
Diluted Loss Per Common Share               $      (.23)       $      (.26)
                                            ===========        ===========
Weighted Average Number of
  Common Shares Outstanding                   6,336,724          6,127,235
                                            ===========        ===========


                        See accompanying notes.

                                  F-4


<PAGE>
              SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CAPITAL DEFICIENCY
                    YEARS ENDED MARCH 31, 1998 AND 1997

                TABLE A   Note: This is Part 1 of Table A.
   Numbers will add up across in Part 1 and Part 2 (Part 2 to follow).

                       Preferred Stock              Common Stock
                       Shares   Amount            Shares      Amount

Balance at
 March 31, 1996        705,066    $705            6,087,161    $6,087

Issuance of Common
 Stock pursuant to
 exercise of stock
 options                     -       -               10,000        10

Conversion of
 Preferred Stock to
 Common Stock          (33,334)    (33)              33,334        33

Issuance of Common
 Stock for services          -       -               10,000        10

Value of options
 pursuant to      
 settlement
 agreements                  -       -                    -         -

Net Loss                     -       -                    -         -

                           
Balance at             -------     ----            ---------    -----
 March 31, 1997        671,732      672            6,140,495    6,140

Conversion of
 Preferred Stock to
 Common Stock         (217,333)    (218)             217,333      218

Net Loss                     -        -                    -        -
                      ---------    ----              -------      ---

Balance at
 March 31, 1998        454,399     $454            6,357,828   $6,358
                       =======     ====            =========   ======


             TABLE A   Note: This is Part 2 of Table A.
Numbers add up across in Part 1 and Part 2 (Part 1 on previous page).

                        Additional
                         Paid-In       Accumulated         Capital
                         Capital          Deficit         Deficiency

Balance at
 March 31, 1996        $12,107,951      $(14,598,684)    $(2,483,941)

Issuance of Common
 Stock pursuant to
 exercise of stock
 options                        90                 -             100

Conversion of
 Preferred Stock to
 Common Stock                    -                 -               -

Issuance of Common
 Stock for services          2,490                 -           2,500

Value of options
 pursuant to      
 settlement
 agreements                  6,500                 -           6,500

Net Loss                         -        (1,596,166)     (1,596,166)
                       ___________      _____________     ___________
Balance at
 March 31, 1997         12,117,031       (16,194,850)     (4,071,007)

Conversion of
 Preferred Stock to
 Common Stock                    -                 -               -

Net Loss                         -        (1,477,733)     (1,477,733)
                       -----------        -----------     -----------

Balance at
 March 31, 1998        $12,117,031      $(17,672,583)    $(5,548,740)
                       ===========      =============    ============








                        See accompanying notes.

                                  F-5


<PAGE>
                SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                       YEARS ENDED MARCH 31, 1998 AND 1997

                                                      1998             1997
 
Cash Flows From Operating Activities:
  Net loss                                        $(1,477,733)     $(1,596,166)
  Adjustments to reconcile net loss to
    net cash used in operating activities:
      Depreciation                                     34,893           57,668
      Amortization                                    251,607          214,766
      Disposal of fixed assets                         41,702            4,742
      Gain on settlement                                    -          (88,350)
      Gain on sale of property                              -          (10,612)
  Changes in operating assets and liabilities:
      Trade accounts receivable                        13,650          (77,669)
      Inventories                                        (364)           4,230
      Installment accounts receivable                 (70,000)               -
      Accounts payable                                 39,430          (27,560)
      Accrued expenses                                  9,873           44,101
      Due to shareholders/directors                   329,083          395,675
      Deferred income                                 (19,880)           8,012
      Deferred gross profit on installment sale        56,157                -
                                                    ----------      -----------
        Net cash used in operating
          activities                                 (791,582)      (1,071,163)

Cash Flows From Investing Activities:
  Purchases of property and equipment                 (39,260)         (34,487)
  Additions to software development costs            (144,418)        (232,271)
  Net increase (decrease) in other assets               2,214          (19,827)
  Proceeds on sale of property,net                          -          675,956
                                                  -----------      -----------
    Net cash (used in) provided by
      investing activities                           (181,464)         389,371

Cash Flows from Financing Activities:
  Proceeds from issuance of Common Stock                    -              100
  Proceeds from loans from shareholders/directors     923,500        1,238,000
  Principal payments on bank mortgages                      -         (389,995)
  Principal payments on notes payable to
   related parties/shareholders                             -         (125,813)
  Principal payments on capital lease obligations     (14,872)         (11,715)
                                                   -----------      -----------
      Net cash provided by financing
          activities                                  908,628          710,577
                                                   -----------      -----------

      (Decrease) increase in cash                     (64,418)          28,785

Cash at beginning of year                             103,316           74,531
                                                   -----------      -----------

Cash at end of year                               $    38,898       $  103,316
                                                  ===========      ===========

Supplemental disclosure of cash flow information:
  Cash paid for interest                          $    36,933       $   80,259
                                                  ===========      ===========




                         (Continued on following page.)

                                      F-6


                 SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENT OF CASH FLOWS (CONT'D)
                    YEARS ENDED MARCH 31, 1998 AND 1997 


Supplemental Schedule of Non-Cash Investing and Financing
Activities
        
     During fiscal 1998, the Company entered into capitalized lease
obligations amounting to $17,310.

     During fiscal year 1998, the Company converted 217,333 shares
of preferred stock to 217,333 shares of Common Stock.

     During fiscal 1997, accrued legal fees of $2,500 were
converted to Common Stock.  During fiscal 1997 stock options valued
at $6,500 were granted as part of a settlement, where the Company
recognized a gain on the settlement in the amount of $88,350, which
is included in other income.























                        See accompanying notes.

                                 F-7


<PAGE>
                 SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            MARCH 31, 1998 AND 1997

NOTE 1 -   BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
           ACCOUNTING POLICIES
        
Basis of Presentation
        
     SK Technologies Corporation (the "Parent"), and its wholly
owned subsidiaries (collectively "the Company"), is engaged in
developing and marketing retail store management software for the
specialty retail industry.  The Company's StoreKare product family
is a modular system of information technology products.

     In May 1997 the Company sold the StoreKare for Subway software
and related assets to an unrelated party and discontinued sales to
Subway Sandwich and Salads ("Subway") fast food restaurants (see
Note 2).  During fiscal 1998 and 1997, Subway accounted for 5% and
17%, respectively, of the Company's revenues.
        
Principles of Consolidation
        
     The consolidated financial statements include the accounts of
SK Technologies Corporation and its two wholly-owned subsidiaries,
SK Technologies Corp. and SK Credit Corporation.  All significant 
intercompany transactions and balances have been eliminated in
consolidation.

Revenues and Expense Recognition

     In accordance with Statement of Position 97-2, "Software
Revenue Recognition" ("SOP  97-2"), the Company recognizes revenue
from software sales upon delivery, when the fees are fixed and
determinable and collectibility of the proceeds is probable.  For
arrangements with multiple elements, revenues are allocated to the
various elements based on the separate prices as stated in the
contract.  Revenue is recognized for each element when the above
requirements for revenue recognition exists.  Equipment sales
revenue is recognized upon shipment.

     Additionally, the Company performs various enhancements to
their basic software, which are retained by the Company, for which
they receive compensation from unrelated parties.  Such revenues
and costs are recorded using the percentage of completion method.

     Maintenance and support revenues are recognized ratably over
the term of the contract.

                                 F-8

          SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    MARCH 31, 1998 AND 1997
        
Cash and Cash Equivalents

     The Company considers all highly liquid investments with a
maturity of three months or less at the date of acquisition to be
cash equivalents.  The concentration of credit risk associated with
cash and cash equivalents is considered low due to the credit
quality of the issuers of the financial instruments.

Trade Accounts Receivable

     Trade accounts receivable are primarily from direct sales to
retail stores and store chains.  The Company performs ongoing
evaluations of its significant customers and generally does not 
require collateral.  The Company maintains an allowance for
doubtful accounts at a level which management believes is
sufficient to cover potential credit losses.

Inventories

     Inventories consist of component parts and support materials
used in the delivery of Company designed computer systems. 
Inventories are stated at the lower of cost (first-in, first-out)
or market.

Property and Equipment

     Property and equipment are recorded at cost and depreciated
using the straight-line method over their estimated useful lives.

Long-Lived Assets

     Management periodically evaluates the Company's property and
equipment to determine if there has been any impairment other-than-
temporary in the carrying value of the assets.  In March 1995, the
Financial Accounting Standards Board issued Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed of" ("Statement 121"), which requires
impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the
undiscounted cash flows estimated to be generated by those assets
are less than the assets' carrying amount.  Statement 121 also
addresses the accounting for long-lived assets that are expected to
be disposed of.

Software Development Costs

     In accordance with Statement of Financial Accounting Standards
("SFAS") No. 86, "Accounting for Costs of Computer Software to be

                                  F-9


           SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MARCH 31, 1998 AND 1997

Sold, Leased or Otherwise Marketed," all direct software production
costs  incurred to generate Production Masters after technological
feasibility has been established are capitalized and subsequently
amortized over the estimated product life cycles.  Prior to
technological feasibility, software development costs are charged
to operations as incurred.

     The amortization of capitalized computer software costs
commences when the Company's software development reaches a point
where its technology is economically feasible for effective market
distribution of the developed product.  

Deferred Income and Revenue Recognition

     Deferred income consists of $30,439 from support contracts to
be recognized ratably over the terms of the contracts and a $91,683
prepayment from an unrelated party for products to be shipped to
resellers of this unrelated party.  The Company is pursuing a
settlement regarding a 1994 agreement, between the Company and this
unrelated party, through arbitration.

Use of Estimates

     The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in 
the consolidated financial statements and accompanying notes. 
Actual results could differ from those estimates.

Advertising Costs

     The Company expenses all advertising costs as incurred.

Earnings (Loss) Per Common Share

     In 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings per
Share.  Statement 128 replaced the previously reported primary and
fully diluted earnings per share with basic and diluted earnings
per share.  Unlike primary earnings per share, basic earnings per
share excludes any dilutive effects of options, warrants, and
convertible securities.  Diluted earnings per share is very similar
to the previously reported fully diluted earnings per share.  All
earnings per share amounts for all periods presented were restated
to conform to the Statement 128 requirements.  Basic and diluted
loss per Common Share is calculated by dividing net loss by the
weighted average Common Shares outstanding.  The exercise of
options and warrants or conversion of convertible securities have

                             F-10

          SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    MARCH 31, 1998 AND 1997

been excluded from the calculation of diluted loss per share since
the Company has a loss from continuing operations and the effect of
these potential shares on loss per Common Share is anti-dilutive.

Accounting for Stock-Based Compensation

     In October 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation," the adoption of which was required for
fiscal years beginning after December 15, 1995.  The new standard
encourages companies to use the fair value method of accounting for
issuance of stock options and other equity instruments.  Under the
fair value method, compensation cost is measured at the grant date
based on the fair value of the award and is recognized over the
service period, which is usually the vesting period.  Pursuant to
SFAS No. 123, companies are also permitted to continue to account
for such transactions under Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees," but are
required to disclose in a note to the financial statements pro
forma net income and per share amounts as if the Company had
applied the new method of accounting.  Additionally, SFAS No. 123
requires increased disclosure for stock-based compensation
arrangements regardless of the method chosen to measure and
recognize compensation for employee stock-based arrangements.

     The Company currently accounts for such transactions under APB
Opinion No. 25 and has elected not to change its method of
accounting for the issuance of stock options and other equity
instruments to the fair value method.

Income Taxes
        
     Deferred tax assets and liabilities are determined based on
differences between financial reporting and tax basis of assets and
liabilities and are measured using the enacted tax rates and laws
that will be in effect when the differences are expected to
reverse.

NOTE 2 - ACCOUNTS RECEIVABLE - INSTALLMENT SALE

     On May 21, 1997 the Company entered into an Asset Purchase
Agreement (the "Agreement") with an unrelated party (the "Buyer"),
whereby the Buyer acquired from the Company, the StoreKare Software
for Subway (including the software source code) and certain other
related assets.  The Company will receive a minimum of $175,000 of
which $55,000 was received upon signing the Agreement and an
additional $50,000 was received through March 31, 1998.  Under the
agreement the Company will receive 14 additional monthly payments
of, the greater of $5,000 or 10% of gross sales of the Buyer of any

                               F-11


             SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MARCH 31, 1998 AND 1997

software that is an associative or derivative of the software for
Subway.  The sale is recorded as an installment sale with revenues
recognized over 24 months as cash is received.  The Company
recognized gross profit of $84,235 during fiscal 1998, as reflected
on the Statement of Operations.  At March 31, 1998 the Balance
Sheet reflects installment accounts receivable of $70,000 and
deferred gross profit of $56,157 from this sale.

NOTE 3 -         PROPERTY AND EQUIPMENT
        
     At March 31, 1998, property and equipment consists of the
following:

                                                                Useful
                                                             Life (years)
Furniture and equipment                  $242,098                5-10
Leasehold improvements                      3,668                   5
                                        ----------
                                          245,766 
Less accumulated depreciation
        and amortization                 (163,635)
                                        ----------
                                         $ 82,131 
                                        ==========

     During fiscal 1998, the Company entered into capitalized lease
obligations amounting to $17,310.  Included in furniture and
equipment at March 31, 1998 is $47,007 under capital leases, net of
accumulated amortization of $16,625.

     During fiscal 1998 and 1997 the Company examined the schedule
of furniture and equipment as compared to the assets still used by
the Company and determined that a total of $7,375 and 4,742, which
are net of accumulated depreciation, are no longer in use by the
Company and accordingly losses of $7,375 and $4,742 on disposal of
fixed assets are included in other expenses for fiscal 1998 and
1997, respectively.

     The Company leases 7,029 square feet of office space from an
unrelated entity for $9,075 per month through January 1999,
pursuant to a lease which expires January 31, 2002.  This amount 
includes rent of $5,512 per month which will increase 4.5% annually
for the next three years and additional rent of approximately $5
per square foot for the Company's allocated share of expenses for
1998.  The expense allocation will be adjusted annually.  Rental
expenses were $110,847 and $35,140 in fiscal 1998 and 1997,
respectively.

                            F-12


               SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         MARCH 31, 1998 AND 1997

     Future minimum lease payments under noncancellable operating
leases at March 31, 1998 are as follows:

           Fiscal Year              Minimum Payment

             1999                      $ 101,288
             2000                      $ 104,240
             2001                      $ 107,333
             2002                      $ 110,566
                                       ---------
                                       $ 423,427
                                       =========

NOTE 4 -         SOFTWARE DEVELOPMENT COSTS

     The Company released versions 3.3 and 3.3.10 of its retail
product, during the second and fourth quarters of fiscal 1998,
respectively, and expects to release a new version of its retail
product during the second quarter of fiscal 1999.

     The Company capitalized approximately $160,000 and $232,000 of
software development costs during fiscal 1998 and 1997,
respectively.

     Amortization of software development costs was approximately
$252,000 and $207,000 during fiscal 1998 and 1997, respectively.

NOTE 5 -         NOTES PAYABLE TO SHAREHOLDER

     At March 31, 1998 notes payable to shareholder consists of a
note payable to a shareholder in the amount of $400,000.

     In November 1992 this shareholder advanced the Company
$500,000.  In January 1997, the Company made a principal payment of
$100,000 on this loan.  The agreement, as amended, between the
Company and the shareholder requires the Company to begin repayment
of this loan in November 1999 with monthly payments of principal
and interest over a four year period.  The Company collateralized
this loan with the office furniture and equipment which the Company
owns (excluding leased equipment) which has a book value at March
31, 1998 of approximately $35,000.

     At the lender's discretion, the interest may be paid in cash
or 50% in cash and 50% in Common Stock at a conversion rate of
$2.50 per share.  This loan bears interest at 10% per annum which
is paid monthly.  During fiscal 1998 and 1997 interest expense of
$40,000 and 49,041, respectively, was incurred on this note.  None
of the interest was converted to stock.

                               F-13


            SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MARCH 31, 1998 AND 1997

NOTE 6 -         CAPITALIZED LEASE OBLIGATIONS

     Furniture and equipment are leased under capital lease
agreements expiring through fiscal 2000 and are included in
furniture and  equipment.  Future minimum commitments by year under
noncancellable capital leases at March 31, 1998 are as follows:

                         Year Ended
                          March 31                               Amount

                              1999                             $ 30,291 
                              2000                                6,614 
                                                                 ------  
                 Total minimum lease payments                    36,905 

                 Less:            Amount representing
                   interest (12%) and deferred
                   maintenance charges                          (10,674)
                                                                 ------  
                 Present value of net minimum
                   lease payments                                26,231
                 Less:            current portion               (22,296)
                                                                 ------ 
                 Long-term portion of capital
                   lease obligations                           $  3,935
                                                                 ====== 

NOTE 7 -         CAPITAL DEFICIENCY

     At March 31, 1998 there were 490,070 private warrants
outstanding, which were issued pursuant to a private offering in
1993.  Such warrants are convertible into 490,070 shares of Common
Stock at a conversion price of $1.00 per share and were extended to
expire in March 2000.

Common Stock

     The number of shares of Common Stock reserved for future
issuance at March 31, 1998 and 1997 is summarized as follows:


                                         1998             1997

Common Stock Purchase Warrants          490,070          490,070
Stock Options                         1,643,669        1,803,669
Convertible Preferred Stock             454,399          671,732
                                      ---------        ---------
                                      2,588,138        2,965,471
                                      =========        =========

                                  F-14


            SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       MARCH 31, 1998 AND 1997

NOTE 8 -         RELATED PARTY TRANSACTIONS

     Pursuant to a May 1993 agreement between the Company and
Fundamental Management Corp. ("Fundamental"), a fee of $25,000 was
approved to be paid in installments  to  Fundamental  based  on 
the  amount  of  proceeds  received from  the  1993  Preferred 
Stock  offering.  The  first  installment  of  $8,333 was paid in
May 1993 and $16,667 is included in accounts payable due to
shareholders/officers/directors, at March 31, 1998.

     Two shareholder/directors of the Company and their related
entities have provided short term loans to the Company totalling
$3,941,500, of which $3,018,000 was received from March 1995
through March 31, 1997, and $923,500 was received during fiscal
1998.  These loans accrue interest at 10% per annum, $689,058
through March 31, 1998 and are due on demand.  During the period
April 1, through May 13, 1998 additional short term loans of
$134,000 were provided to the Company.  In December 1996, the
Company collateralized these loans with the StoreKare software and
documentation.

     Pursuant to a May 1993 Consulting agreement between the
Company and Capital Hill Group Inc. ("CHG"), the Company incurred
consulting fees to CHG of $5,550 per month, for a total of $236,500
through December 1996 when the agreement terminated.  Of this
amount $225,500 has been accrued to date of which $49,500 was
accrued during fiscal 1997 and is included in other selling,
general and administrative expenses in the Statement of Operations
for the year ended March 31, 1997.

     As additional compensation, in May 1993 the Company granted
CHG a five year option for 89,869 shares of common stock at an
exercise price of $.10 per share.  Such option expires May 1998.

     In connection with the Finder's agreement between the Company
and CHG the Company accrued finders fees of $493,000 through
December 1996 of which $100,500 was accrued during fiscal 1997 and
is included in other selling, general and administrative expenses
in the Statement of Operations for the year ended March 31, 1997.

NOTE 9 -         INCOME TAXES

     At March 31, 1998 the Company has net operating loss
carryforwards of approximately $16 million that can be used to
offset future taxable income, that expire in the years 2005 through
2013.  In fiscal 1995, the Company had ownership changes as defined
under Internal Revenue Code Section 382 (Section 382).  As such,

                          F-15


               SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         MARCH 31, 1998 AND 1997

the availability to utilize the net operating losses that existed
as of this ownership change is limited.

     Significant components of the Company's deferred tax assets as
of March 31, 1998 are as follows:

          Software development costs                   $   336,283 
          Deferred compensation                             51,575 
          Net operating losses                           5,509,464 
          Research and development costs                   305,000 
          Accrued expenses                                 552,739 
                                                       ----------- 
                                                         6,755,061 
          Valuation allowance                           (6,755,061)
                                                       ----------- 
                                                       $         - 
                                                       =========== 

     The net change in the valuation allowance during 1998 was
$223,061.

     The reconciliation of income tax attributable to continuing
operations computed at the U.S. federal statutory tax rate of 34%
to loss before income taxes for the years ended March 31, 1998 and
1997 is as follows:
                                            1998            1997

     Tax at U.S. statutory rates         $(264,270)     $  (543,000)
     Unrecognized benefit of net
        operating losses                   264,270          543,000 
                                         ---------      ----------- 
                                         $       -      $         - 
                                         =========      =========== 

NOTE 10 -    STOCK OPTIONS
        
1990 Company Stock Option Plan

     On April 3, 1990, the Company adopted a Stock Option Plan (the
"1990 Option Plan") for its directors and employees, which provides
for the grant of options to purchase an aggregate 50,000 shares of
the Company's Common Stock.  Of this amount, 45,000 shares may be
granted as incentive stock options.
   
     The 1990 Option Plan is intended to qualify as an "Incentive
Stock Option Plan" under Section 422A of the Internal Revenue Code. 
Under the 1990 Option Plan, incentive stock options may be granted

                            F-16


            SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MARCH 31, 1998 AND 1997

at not less than 100 percent of the fair market value of the
Company's Common Stock as determined by the Board of Directors on
the date of grant (110% of fair market value for 10% or greater
shareholders) and options granted to any one participant may not
exceed $100,000 in option price per year, plus certain carryovers
from prior years.  Options must be granted within ten (10) years
from the adoption of the 1990 Option Plan.  Each option granted
under the 1990 Option Plan must be exercised within ten (10) years
from the date of grant.

     During both fiscal 1998 and 1997 there were 1,600 options
outstanding pursuant to the 1990 Option Plan.  As of March 31, 1998
and 1997, 1,600 of the options through the 1990 Option Plan were
exercisable at an exercise price of $30.00 per share.

1995 Company Stock Option Plan

     In November 1995, the Company adopted the 1995 Option Plan,
reserving 1,400,000 shares of Common Stock which may be purchased
pursuant to the exercise of options granted under this plan.  

     The 1995 Option Plan is also intended to qualify as an
"Incentive Stock Option Plan" under Section 422A of the Internal
Revenue Code.  Under the Option Plan, incentive stock options may
be granted at not less than 100 percent of the fair market value of
the Company's Common Stock as determined by  the Board of Directors
on the date of grant (110% of fair market value for 10% or greater
shareholders) and options granted to any one participant may not
exceed $100,000 in option price per year, plus certain carryovers
from prior years.  Options must be granted within ten (10) years
from the adoption of the Option Plan.  Each option granted under
the Option Plan must be exercised within five (5) years from the
date of grant.  The Options issued pursuant to the 1995 Option Plan
may be Incentive Stock Options ("ISOs"), options which are not ISOs
("NSOs"), or "reload options", (as defined).  On October 31, 1996
the 1995 Option Plan was approved by a majority of the shareholders
of the Company.  In July 1997, the Company filed a registration
statement on Form S-8, with the Securities and Exchange Commission,
to register 1,400,000 shares of Common Stock which may be purchased
pursuant to the exercise of options under the 1995 Option Plan.  As
of March 31, 1998, 881,250 options granted pursuant to this plan
are ISOs and 125,000 options granted pursuant to this plan are
NSOs.

     In August 1996 options for 714,450 shares of Common Stock at
an exercise price of $.50 per share, were cancelled and replaced
with options for 714,450 shares of Common Stock at an exercise
price of $.32 per share.

                            F-17


            SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       MARCH 31, 1998 AND 1997

     During fiscal 1998 and 1997 options for 36,000 and 63,300
shares of Common Stock were granted to employees and options for
25,000 and 210,000 shares of Common Stock were granted to officers
and directors of the Company.  Such options are exercisable at $.32
and expire through December 2002, five years from the date of
grant.  As of March 31, 1998, there are options for 987,750 shares
of Common Stock outstanding of which 841,388 are exercisable.

Other Stock Options

     As of March 31, 1998 and 1997, other stock options of 193,669
and 353,669, respectively, were outstanding.  Such options expire
through 2002.  As of March 31, 1998 and 1997, 193,669 and 353,669 
respectively, of the other stock options are fully vested.

Stock Based Compensation

     As required by Statement No. 123, pro forma information
regarding net loss and loss per share has been determined as if the
Company had accounted for its employee stock options under the fair
value method of that statement.  The fair value for these options
was estimated at the date of grant using a Black-Scholes option
pricing model with the following weighted-average assumptions for
1998; risk-free rate of return of 6.00%; dividend yield of 0.000%;
volatility factor of the expected market price of the Company's
common stock of 1.228 and a weighted-average expected life of the
options of two to seven years.

     The Black-Scholes option valuation model was developed for use
in estimating the fair value of traded options that have no vesting
restrictions and are fully transferable.  In addition, option
valuation models require the input of highly subjective assumptions
including the expected stock price volatility.  Because the
Company's stock options have characteristics significantly
different from traded options, and because changes in the
subjective input assumptions can materially affect the fair value
estimate, the existing models, in management's opinion, do not
necessarily provide a reliable single measure of the fair value of
its stock options.

                           F-18


              SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MARCH 31, 1998 AND 1997

Information regarding stock options for the years ended March 31,
1998 and March 31, 1997 is summarized as follows:

                                                            Weighted Average
                                     Number of               Exercise Price
                                      Shares                  Per Share   

Outstanding at March 31, 1996        1,358,495                   $1.48
Exercised                              (10,000)                  $ .00
Expired                               (125,276)                  $ .77
Forfeited                                    -                       -
Cancelled                             (892,950)                  $ .33
Granted                              1,012,750                   $ .24
                                    ----------
Outstanding at March 31, 1997        1,343,019                   $ .63
Exercised                                    -                       -
Expired                               (160,000)                  $ .26
Forfeited                                    -                       -
Cancelled                              (42,500)                  $ .01
Granted                                 61,000                   $ .32
                                     ----------
Outstanding at March 31, 1998        1,201,519                   $ .45
                                     ==========
Exercisable at March 31, 1998        1,036,657                   $ .41
                                     ==========
Reserved for future option
  grants at March 31, 1998             442,150
                                     ==========


     For the purposes of pro forma disclosures, the estimated fair
value of the options is amortized to expense over the options'
vesting period.  The Company's 1998 and 1997 pro forma information
follows:

                                              1998                     1997   

        Net Loss                          $(1,509,867)             $(1,716,219)
                                          ============             ============
        Loss per common share             $      (.24)             $      (.28)
                                          ============             ============

     The 1998 and 1997 pro forma effect on net loss is not
necessarily representative of the effect in the future years
because it does not take into consideration pro forma
compensation expense related to grants made prior to 1995.

                                F-19


                SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MARCH 31, 1998 AND 1997

     The exercise price of options outstanding at March 31, 1998
ranged between $.10 and $30.00.

NOTE 11 -   401(K) PROFIT SHARING PLAN

     The Company adopted a 401(K) Profit Sharing Plan (the "401(K)
Plan") effective January 1, 1995.  All employees are eligible to
participate in the 401(K) Plan once they have satisfied the
eligibility requirements which are as follows:  employees must be
21 years of age and have completed 3 months of service with the
Company.  The 401(K) Plan is currently funded by employee
contributions only.  Employees may elect to contribute up to, the
lesser of, 15% of their salary or $10,000 for 1998, as adjusted to
reflect annual federal cost of living increases, or such lesser
amount as determined by discrimination tests for the plan.

NOTE 12 -   FAIR VALUE OF FINANCIAL INSTRUMENTS

     The following methods and assumptions were used by the Company
in estimating its fair value disclosure for financial instruments:

        Cash and Cash Equivalents:  The carrying amounts reported in
        the consolidated balance sheets for cash and cash equivalents
        and restricted cash approximate their fair values.

        Borrowings/Bank Mortgages:  The fair value for borrowings/bank
        mortgages is generally estimated using discounted cash flow
        analyses, based on the Company's current incremental borrowing
        rates for similar types of borrowing arrangements.

     The carrying amounts and fair values of the Company's
significant financial instruments at March 31, 1998 are as follows:


                                     Carrying
                                      Amount               Fair Value

Cash and cash                        $   38,898            $   38,898       
 equivalents

Loans payable to shareholders/        4,341,500            (See below)
 directors/related parties

     It is impracticable to estimate the fair value of the loans
payable to shareholders/directors/related parties due to the
unavailability of information on comparable instruments.

                           F-20


            SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MARCH 31, 1998 AND 1997

NOTE 13 -                LIQUIDITY

        Through March 31, 1998, the Company has incurred significant
operating losses and has a working capital deficiency.  Since March
1995 through May 13, 1998 two majority shareholders/directors of
the Company and their related entities have provided funding to the
Company in the form of loans totalling $4,075,500 of which $923,500
was received during fiscal 1998.  These loans are due on demand. 
If additional funding is not obtained from these two
shareholders/directors and their related entities, through an
offering or alternate sources of funding of which none have
presently been identified, the Company would have to curtail
operations and/or take other actions.  Based on these conditions,
doubt exists about the ability of the Company to continue as a
going concern.  The financial statements for the year ended March
31, 1998 do not include adjustments relating to the recoverability
and classification of the recorded carrying value of assets or the
amounts or classifications of liabilities that might be necessary
should the Company be unable to continue as a going concern.

                            F-21


<PAGE>
ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE

    None.

                          PART III

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

     The following persons are the directors and executive officers
of the Company as of March 31, 1998.  All directors are elected by
the shareholders to serve until the next meeting of shareholders or
until their successors are duly elected and qualified.  Officers
are elected by the Board of Directors to serve at the pleasure of
the Board.


       Name                   Age            Position

Calvin S. Shoemaker            57      President/Chief Executive  
                                       Officer/Director

Melvin T. Goldberger           78      Treasurer/Director

Roger N. Oesterling            55      Executive Vice President

Douglas A. Beard               66      Executive Vice President

Susan L. Fedderman             45      Executive Vice President/
                                       Secretary

Gary S. Spirer                 53      Director
        
David H. Peipers               41      Director

C. Shelton James               58      Director

Michael P. Siewruk             41      Director


     Calvin S. Shoemaker.  Mr. Shoemaker has been an officer and
director of the Company since May 1993.  Mr. Shoemaker was a
founder and President of Flashpoint Computer Corp. from 1986
through 1993.  Mr. Shoemaker was with Northridge Corp. from 1984
through 1986; Vice President of Sales and Marketing of Timeplex
from 1983 through 1984 and Vice President of Sales and Marketing
for Gould Inc/SEL Computer Systems from 1971 through 1983.  Mr.
Shoemaker earned a Bachelor of Science degree from Randolph Macon
College.

     Melvin T. Goldberger.  Mr. Goldberger has been an officer of
the Company since July 1993 and a director since January 1994.  Mr.
Goldberger has been President of Seventh Investment Bancing Corp.
since 1972 to date and is also the President of MTG Development
Inc.  From 1968 through 1971 he was Chairman of the Board of Vector
Company.  Mr. Goldberger serves as a member of the Board of
Directors of Mae Volen Senior Citizen Center.  He is also a member
of the Board of Governors of the Florida Philharmonic Orchestra. 
Mr. Goldberger earned a Bachelor of Science degree from Ohio State
University.

     Roger N. Oesterling.  Mr. Oesterling has been an officer of
the Company since May 1993.  Mr. Oesterling was Senior Engineering
Director of Racal Milgo Inc. from 1989 through 1991 and Senior
Director of Network Management from 1985 through 1989.  He was a
business manager of Timeplex Inc. from 1984 through 1985 and held
various positions as director and manager of Gould Inc./SEL
Computer Systems from 1973 through 1984.  Mr. Oesterling earned a
Bachelor of Science degree from Grove City College.

     Douglas A. Beard.  Mr. Beard has been an officer of the
Company since November 1993.  From 1990 through 1991 Mr. Beard was
a Director of Atlantix Corporation.  Mr. Beard was a Senior
Director of Gould Inc./SEL Computer Systems from 1985 through 1990
and held various positions including Director of World-Wide Support
Services, Director of Systems Engineering and Director of Sales
Support from 1972 through 1981.  He was a Director of World-Wide
Customer Service for Modcomp from 1981 through 1985.  Mr. Beard
attended Plymouth and Devonport College of Technology in the United
Kingdom and earned a Bachelor of Science degree.

     Susan L. Fedderman  Ms. Fedderman has been an officer of the
Company since December 1993.  She has worked with the Company in
various financial positions since August 1988.  From 1979 until
joining the Company Ms. Fedderman worked in public accounting.  Ms.
Fedderman earned an M.B.A. from Baruch College in New York and is
a certified public accountant, licensed in Florida and New York.

     Gary S. Spirer.  Mr. Spirer was elected as a director of the
Company on May 13, 1993.  Prior to that date, he served as a member
of the Company's Advisory Board.  Mr. Spirer is President of
Capital Hill Group, Inc. since 1981 which provides consulting
services to the Company.  He is also a director of Buckeye
Communications Inc.  Mr. Spirer holds a B.A. from New York
University where he graduated Magna Cum Laude and Phi Beta Kappa,
and he holds an M.B.A. from Columbia University.  Mr. Spirer is the
sole shareholder of Capital Hill Investment Corporation, a real
estate investment company.

     David H. Peipers.  Mr. Peipers was elected as a director of
the Company on May 13, 1993.  Among other activities, Mr. Peipers
is President of Peipers & Co. Inc., an investment firm dealing with
securities and venture capital, since 1982.  He also has been a
general partner of the Winsome Limited Partnership,  which makes
long term investments in the securities of both public and private
companies, since 1989.  He is a founder and Chairman of Segrets,
Inc., a Beverly, Massachusetts-based women's sportswear
manufacturer, and Bedminster Bioconversion Corporation, an
environmental company based in Cherry Hill, New Jersey. Mr. Peipers
holds an A.B. from Harvard University (1978) and a J.D. from
Harvard Law School (1981).

     C. Shelton James.  Mr. James was elected as a director of the
Company on May 13, 1993.  Prior to that date he served as a member
of the Company's Advisory Board.  Mr. James is President of
Fundamental Management Corp. and Chairman and Chief Executive
Officer of Elcotel Inc. since May 1991.  He was President of the
Computer Systems Division of Gould, Inc. from 1980 through 1989 and
Executive Vice President of Gould's Information System Business
Section from 1985 through 1989.  He provides consulting services to
the Company pursuant to a May 1993 agreement. Mr. James has been a
director of NAI Inc. since 1990, Harris Computer Systems Inc. since
September 1994, CSPI since December 1994 and Group Long Distance
Inc. since October 1995.  He earned a Bachelors of Business
Administration degree from Clarkson University and a Masters of
Business Administration from New York University.  

     Michael P. Siewruk  Mr. Siewruk was elected as a director of
the Company in December 1997.  Mr. Siewruk is President and CEO of
NetVital and previously was a subsidiary President with Quarterdeck
Corporation, a leading utility/internet/remote computing software
publisher.  In 1989 Mr. Siewruk Co-founded Landmark Research an
international technology development and marketing company.  Mr.
Siewruk earned a Bachelor of Science degree from Oakland
University, Rochester, Michigan.

Compliance with Section 16(A) of the Securities Exchange Act of
1934

        Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's directors and executive officers, and persons who own
more than ten percent of the Company's outstanding Common Stock, to
file with the Securities and Exchange Commission ("SEC") initial
reports of ownership and reports of changes in ownership of Common
Stock.  Such persons are required by SEC regulation to furnish the
Company with copies of all such reports they file.

        To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written
representation that no other reports were required, all Section
16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners have been complied with.


<PAGE>
ITEM 10.                        EXECUTIVE COMPENSATION:
                                    
                                Annual Compensation            

                                                   Other       
                                                 Other Annual    
Name and            Fiscal    Salary     Bonus    Compensa-      
Position             Year       ($)       ($)     tion ($)     

Calvin Shoemaker     1996     75,000     13,846         0
President/Chief      1997     75,000     13,047         0        
Executive Officer    1998     75,000     13,245         0        

All executive                                                     
officers as a        1996    263,334     38,496         0         
group (four          1997    209,626     36,242         0        
persons)             1998    262,500     39,734         0        



                               Awards           Payouts           
                    Restricted                              All   
                      Stock          Options/    LTIP      Other
Name and              Awards           SARs     Payouts   Compensa-
Position            (# Shares)(1)       (#)       ($)      tion ($)

Calvin Shoemaker      400,000             0        0          0
President/Chief       400,000             0        0          0
Executive Officer           0             0        0          0 

All executive         785,000             0        0          0
officers as a         730,000             0        0          0
group (four          (730,000)      760,000        0          0 
persons)




  (1)      The number of shares granted as restricted stock awards
           to executive officers in fiscal 1996 have been adjusted
           since options for 400,000 shares for Calvin Shoemaker
           and for 635,000 shares for all executive officers were
           cancelled and replaced with new options in fiscal 1997. 
           The new options are included in the fiscal 1997
           restricted stock awards.

           In July 1997, the Company filed a registration statement
           on Form S-8, with the Securities and Exchange
           Commission, to register 1,400,000 shares of Common Stock
           which may be purchased pursuant to the exercise of
           options under the 1995 Option Plan.  Accordingly 
           restricted stock awards were reclassified as options in
           fiscal 1998.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT:

     The following table sets forth, as of June 22, 1998, certain
information regarding the amount and percentage of Common and
Preferred Stock beneficially owned by each person known by the
Company to own more than five percent of its outstanding Common and
Preferred Stock, each director of the Company and all officers and
directors as a group.

                                  Amount of
Name and Address                  Beneficial         Percentage
Beneficial Owner of              Ownership of         of Voting
Identity of Group               Common Stock(1)     Securities(1)

Calvin S. Shoemaker(4)              80,091              0.012%
500 Fairway Drive, Suite 104
Deerfield Beach, FL 33441

Gary S. Spirer(1)(5)               106,300              0.016%
150 E. 58th Street
New York, NY 10155

Capital Hill Group(5)                3,945              0.001%
Gary Spirer, President
150 E. 58th Street
New York, NY 10155

David H. Peipers(1)(3)             315,811              0.046%
888 Seventh Avenue
New York, NY  10106

Cornerhouse Ltd. Ptshp.(3)         837,294              0.123%
David Peipers, G.P.
888 Seventh Avenue
New York, NY  10106

Winsome Ltd. Ptshp(3)              603,909              0.089% 
David Peipers, G.P.
888 Seventh Avenue
New York, NY  10106

Segrets, Inc.(3)                 1,312,421              0.193%
David Peipers, Chairman
66 Cherry Hill Drive
Beverly, MA 01915

C. Shelton James(1)(6)              19,973              0.003%
4000 Hollywood Blvd.
Hollywood, FL 33021

Fundamental Management Corp.(6)         93              0.000%
C.S. James, President
4000 Hollywood Blvd.
Hollywood, FL 33021

Fundamental Active
  Investors Ltd II(6)            1,190,014              0.175%
Fundamental Mgmt Corp., G.P.
4000 Hollywood Blvd.       
Hollywood, FL 33021

Melvin Goldberger(1)(2)             20,333              0.003%
1761 W. Hillsboro Blvd.
Deerfield Beach, FL 33442

Seventh Investment 
  Bancing Corp.(2)                  69,569              0.01%
Melvin Goldberger, President
1761 W. Hillsboro Blvd.
Deerfield Beach, FL 33442

All Directors and
Executive Officers as
a Group (9 persons) (7)          4,626,263              0.679%

____________________________

(1)      Stock options were granted to five directors of the Company in
         August 1996 and December 1997.  Each director received an
         option for 25,000 shares of Common Stock at an exercise price
         of $.32 per share.

(2)      Includes 78,869 shares of Common Stock and 11,033 shares of
         Preferred Stock (held by Melvin Goldberger, trustee for the
         Grace Goldberger Trust).

(3)      Includes 2,886,101 shares of Common Stock and 183,334 shares
         of Preferred Stock.

(4)      Includes 63,424 shares of Common Stock and 16,667 shares of
         Preferred Stock.  

(5)      Pursuant to a May 1993 agreement between the Company and
         Capital Hill Group ("CHG")  an option for 89,869 shares of
         Common Stock was granted to CHG. Such option expired May 13,
         1998.

(6)      Pursuant to the Company's 1993 agreement with Fundamental
         Management Corp. ("FMC") and its president, a stock option for
         28,801 shares of Common Stock was granted 50% to FMC and 50%
         to its president.  Such options expired May 13, 1998.

(7)      As part of the units sold in a September 1993 offering,
         warrants for 447,138 shares of Common Stock at an exercise
         price of $1.00 per share are held by certain of these
         executive officers and directors.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS: 

     Pursuant to a May 1993 agreement between the Company and
Fundamental Management Corp. ("Fundamental"), a fee of $25,000 was
approved to be paid in installments  to  Fundamental  based  on 
the  amount  of  proceeds  received from  the  1993  Preferred 
Stock  offering.  The  first  installment  of  $8,333 was paid in
May 1993 and $16,667 is included in accounts payable due to
shareholders/officers/directors, at March 31, 1998.

     Two shareholder/directors of the Company and their related
entities have provided short term loans to the Company totalling
$3,941,500, of which $3,018,000 was received from March 1995
through March 31, 1997, and $923,500 was received during fiscal
1998.  These loans accrue interest at 10% per annum, $689,058
through March 31, 1998 and are due on demand.  During the period
April 1, through May 13, 1998 additional short term loans of
$134,000 were provided to the Company.  In December 1996, the
Company collateralized these loans with the StoreKare software and
documentation.

     Pursuant to a May 1993 Consulting agreement between the
Company and Capital Hill Group Inc. ("CHG"), the Company incurred
consulting fees to CHG of $5,550 per month, for a total of $236,500
through December 1996 when the agreement terminated.  Of this
amount $225,500 as been accrued to date of which $49,500 was
accrued during fiscal 1997 and is included in other selling,
general and administrative expenses in the Statement of Operations
for the year ended March 31, 1997.

     As additional compensation, in May 1993 the Company granted
CHG a five year option for 89,869 shares of common stock at an
exercise price of $.10 per share.  Such option expired in May 1998.

     In connection with an agreement between the Company and CHG
the Company accrued finders fees of $493,000 through December 1996
of which $100,500 was accrued during fiscal 1997 and is included in
other selling, general and administrative expenses in the Statement
of Operations for the year ended March 31, 1997.


ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K:
         
           The following documents are filed as part of this report: 

     (a)   Exhibits

           Exhibit #        Description of Exhibit       


           3.1          Certificate of Incorporation, as amended, through
                        September 19, 1992, is incorporated herein by
                        reference to the Registration Statement on Form
                        S-18, File No. 33-27977-A, as declared effective
                        on July 10, 1989, as amended by Post-Effective
                        Amendment No. 1 declared effective on September
                        12, 1990, as amended by Post-Effective Amendment
                        No. 2 declared effective on November 15, 1991
                        (collectively, the "Registration Statement"), the
                        Annual Report on Form 10-K for the fiscal year
                        ended March 31, 1990, File No. 0-18184 filed June
                        29, 1990 2("1990 10-K"), and the Annual Report on
                        Form 10-K for the fiscal year ended March 31,
                        1991, File No. 0-18184 filed July 13, 1991 ("1991
                        10-K").

           3.2          Amended Certificate of Designation of Preferences
                        Right and Limitations dated November 1, 1991 is
                        incorporated herein by reference to the
                        Registration Statement on Form S-1, as amended,
                        File No. 33-44402, declared effective by the
                        Commission on May 15, 1992 ("Form S-1").

           3.3          The Bylaws are incorporated herein by reference
                        to the Registration Statement.

           3.4          Certificate of Amendment of the Certificate of
                        Incorporation dated November 4, 1996 is
                        incorporated herein by reference to schedule 14C
                        filed on November 5, 1996.

           4.1          Warrant Agreement between the Registrant and
                        Interwest Transfer Company is incorporated herein
                        by reference to the 1990 10-K.

           4.2          Certificates of Designations, Preferences Rights
                        and Limitations - Series B Convertible Redeemable
                        Preferred Stock dated February 17, 1993 and
                        amended April 14, 1993 is incorporated herein by
                        reference to the 1993 10-KSB.

           4.3          Amended Certificate of Designation of Preferences
                        Right and Limitations Series B Convertible
                        Redeemable Preferred Stock dated March 23, 1993
                        is incorporated by reference to the 1993 10-KSB.

           10.1         May 13, 1993 Financial Consulting Agreement
                        between the Registrant and Capital Hill Group,
                        Inc. ("Financial Consulting Agreement") is incor-
                        porated herein by reference to the 1991 10-K.

           10.2         Amendment to Financial Consulting Agreement dated
                        May 13, 1993 is incorporated herein by reference
                        to the 1993 10-KSB.

           10.3         Option for Capital Hill Group, Inc. to Purchase
                        Common Stock is incorporated by reference to the
                        1991 10-K.

           10.4         Finder's Agreement between the Registrant and
                        Capital Hill Group, Inc. ("Finder's Agreement")
                        is incorporated by reference to the 1991 10-K.

           10.5         Amendment to Finder's Agreement, dated May 13,
                        1993 is incorporated by reference to the 1993 10-
                        KSB.

           10.8         Agreement dated September 16, 1994 between
                        Fujitsu-ICL Systems, Inc. and the Registrant
                        (confidential treatment has been granted for por-
                        tions of this exhibit) is incorporated by
                        reference to the 1995 10-KSB.

           10.9         Solution Provider agreement between NCR Corpor-
                        ation and the Registrant dated February 7, 1994
                        is incorporated herein by reference to the 1994
                        10-KSB.

           10.10        Common Stock Purchase Warrant between the Company
                        and Gary S. Spirer, dated May 13, 1993 is
                        incorporated herein by reference to the 1993 10-
                        KSB.

           10.11        Consulting Agreement between the Company and C.
                        Shelton James and Fundamental Management
                        Corporation, dated May 13, 1993 is incorporated
                        herein by reference to the 1993 10-KSB.

           10.12        Promissory Note dated November 7, 1992, as a-
                        mended March 9, 1993 and April 7, 1993, with
                        Baron Coleman as Holder and the Company as Maker
                        is incorporated herein by reference to the 1993
                        10-KSB.

           10.14        Letter of Understanding between the Company and
                        Omron Systems of America dated April 29, 1992 is
                        incorporated herein by reference to the 1993 10-
                        KSB.

           10.16        1995 Company Stock Option Plan is incorporated
                        herein by reference to the 1996 10-KSB.

           21.          Subsidiaries of the Registrant is incorporated by
                        reference to the 1991 10-K.

           22.          Information Statement sent on October 9, 1996, to
                        notify shareholders of the Company's intention to
                        file a certificate of Amendment to its Cer-
                        tificate of Incorporation, decreasing the amount
                        of authorized shares of Common Stock and
                        Preferred Stock, is herein incorporated by refer-
                        ence to Schedule 14C filed on November 5, 1996.

           23.          Consent of Ernst & Young LLP.

           27.          Financial Data Schedule for the Year Ended March
                        31, 1998


     (b)   Reports on Form 8-K

           The Company did not file any reports on Form 8-K during
           the three months ended March 31, 1998.


<PAGE>
                         SIGNATURES

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

                              SK TECHNOLOGIES CORPORATION,
                              a Delaware corporation


Date:  June 29, 1998          By:  /s/ Calvin S. Shoemaker    
                                   Calvin S. Shoemaker, President 


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

   Signature                    Title                       Date


/s/ Calvin S. Shoemaker       President/Chief           June 29, 1998
Calvin S. Shoemaker           Executive Officer/
                              Director

/s/ Melvin T. Goldberger      Treasurer/Director/       June 29, 1998
Melvin T. Goldberger          Principal Accounting
                              Officer

/s/ C. Shelton James          Director                  June 29, 1998
C. Shelton James

/s/ David H. Peipers          Director                  June 29, 1998
David H. Peipers

/s/ Michael Siewruk           Director                  June 29, 1998
Michael Siewruk

Gary Spirer                   Director