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, 1999

        [ ]      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. ____

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

         $806,759

     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 21, 1999 was $236,541.

     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 21, 1999, 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 business strategy is to continue to enhance our StoreKare
product with additional customer requested modifications and
continue the integration of StoreKare with new Windows products.

     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 add-on
module, for Windows.

     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, additional workstations, registers and
stores are offered at a suggested retail price ranging from $100 to
$715.
                                   2

<PAGE>
Business Ventures

     Management believes that aligning the Company with one or more
strategic partners 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"), NCR,  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.

     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 is an IBM Business Partner.  The Company is also
a participant in the IBM retail solutions program which provides
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.  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 1999, 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.

                                3

<PAGE>
     NCR

     In April 1999, the Company was approved as an NCR Solution
Provider.  This alliance provides the Company with a listing as an
NCR Solution Provider in the NCR Alliance Reference Guide.  Also,
the Company receives discounts on NCR products and services.

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 completed in 1998 to identify and resolve all occurrences of
the year 2000 date handling within StoreKare.

     Research and development costs expensed in fiscal 1999 and
1998 were approximately $102,000 and $114,000, respectively.  The
Company capitalized development costs of approximately $135,000 and
$160,000 during fiscal 1999 and 1998, 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 major 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.
                              4

<PAGE>
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 and training 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, NCR, Omron
and CompuRegister will assist in the marketing of its products.

Service and Maintenance

     The Company's ability to provide technical support services to
its resellers and users at a high level of quality and at
reasonable rates is required for the Company to market its
software.

     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 5 day
9 hour standard and 7 day 12 hour extended telephone support for
its software.

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

                              5
<PAGE>
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.  However, the Company is dependent upon
certain external applications.  First 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.  Also the Company is dependent
upon the continued distribution and support of the Faircom
Corporation's c-tree database manager, r-tree report generator and
the ODBC drivers.  These products are embedded in certain StoreKare
modules.

     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, NCR, 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.

                                   6
<PAGE>
Personnel

     The Company currently employs 19 persons as follows: executive
officers (four persons), customer service (two persons), sales and
marketing (five persons), programming and quality assurance (five
persons), administration and finance (two persons), 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 $9,597 per month through January
2000, pursuant to a lease which expires January 31, 2002.  This
amount includes rent of $5,758 per month which will increase 4.5%
annually for the next two years and additional charges for the
Company's allocated share of expenses for 1999.  The expense
allocation will be adjusted annually.  This office space is
suitable for the Company's current needs.


ITEM 3.          LEGAL PROCEEDINGS

     On October 21, 1998 a mediation was held to settle a dispute
arising out of a contract dated September 16, 1994 between the
Company and Fujitsu-ICL Systems, Inc. ("ICL").  ICL paid the
Company a settlement of $125,000 and both parties signed mutual
releases.


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

     None

                                       7
<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, 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 30, 1998                        $ 0.09375                   $ 0.0625

July 1, 1998 -
 September 30, 1998                   $ 0.0625                    $ 0.046875

October 1, 1998 -
 December 31, 1998                    $ 0.046875                  $ 0.03125

January 1, 1999 -
 March 31, 1999                       $ 0.03125                   $ 0.03125

April 1, 1999 -
 June 21, 1999                        $ 0.28125                   $ 0.O3125

     On June 21, 1999, the closing bid price on the OTC Bulletin
Board of the Common Stock was $.0625.

     As of June 21, 1999, 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.

                                8
<PAGE>
     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.

                                 9
<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 accounting system, 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 2000 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, and later
versions, provide complete Year 2000 date processing capability for

                                   10
<PAGE>
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 3.3.2X and all StoreKare 3.3 systems must be updated to
StoreKare 3.3.2X 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 $1,233,965 for the fiscal
year ended March 31, 1999.  The Company's cash decreased slightly
from $38,898 at March 31, 1998 to $29,188 at March 31, 1999.  The
working capital deficiency increased from $(5,579,205) at March 31,
1998 to $(6,762,102) at March 31, 1999.  The increase in the
working capital deficiency was mainly due to the receipt of loans
totaling $782,000 during fiscal 1999 from two
shareholders/directors of the Company and their related entities
and the accrued interest, on the loans from these
shareholders/directors, of $438,398 during fiscal 1999.

     At March 31, 1999 and 1998, the Company's capitalized
expenditures for development were $1,062,820 and $927,901,
respectively (accumulated amortization was $759,123 and $552,467 at
March 31, 1999 and 1998, respectively).  The Company capitalized
development costs of $134,919 and $160,458 during fiscal 1999 and
1998, respectively.  The Company, subject to the availability of
working capital, anticipates incurring a comparable amount of
development costs for the year ending March 31, 2000 as compared to
the development costs incurred during the year ended March 31, 1999
as the Company continues its efforts to offer Windows products.

     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,

                                11
<PAGE>
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, 1999, the Company has incurred significant
operating losses and has a working capital deficiency.  During
fiscal 1999, the Company's principal source of funding was from
loans of $782,000 from two majority shareholders/directors of the
Company and their related entities.  These loans accrue interest at
10% per annum, $438,398 was accrued during fiscal 1999.  During the
period April 1, 1999 through May 31, 1999 the Company received
additional loans of $136,000 from these shareholders/directors and
their related entities.  Since March 1995 through May 31, 1999, the
Company has received monthly funding in the form of loans totalling
$4,859,500 from these shareholders/directors and related entities,
which are payable on demand.  In June 1999 these two
shareholders/directors and their related entities agreed to convert
loans through April 30, 1999, totalling $3,997,000 to Common Stock
at $.60 per share, which is above the market price per share of the
Company's Common Stock, and $792,500 to a new Series D Preferred
Stock and have agreed to forgive interest accrued through June 21,
1999 totalling $1,234,789.  On June 22, 1999, one
shareholder/director of the Company committed to provide funding to
the Company in the amount of $405,000, based on the Company's
projected cash deficiencies for the remainder of fiscal 2000, for
shares of the Company's Common Stock at $.125 per share.  If actual
cash deficiencies exceed the projected amount, this
shareholder/director agreed to fund any additional cash
deficiencies through March 31, 2000, with the terms of the
additional funding to be determined at such time.

Results of Operations

     For the years ended March 31, 1999 and 1998, the Company
reported a net loss of $1,233,965 and $1,477,733, respectively.
Revenues for the years ended March 31, 1999 and 1998, were $806,759
and $854,258, respectively.

     Amortization of software development costs was $206,657 and
$251,608, for fiscal 1999 and 1998.  In addition, the Company
incurred and expensed, research and development costs of $102,409
and $114,106, to maintain and improve the existing versions of the
StoreKare products.

     Total selling, general and administrative expenses for fiscal
1999 decreased 11% from fiscal 1998.  This decrease was due to
reductions in staffing, legal and consulting fees and overhead

                               12
<PAGE>
costs.  The Company anticipates that total selling, general and
administrative expenses will increase slightly during fiscal 2000
as the Company continues to recruit additional salespeople in
various locations throughout the United States.

      The Company reported gross profit on installment sales of
$40,111 and $84,235 during fiscal 1999 and 1998, respectively, from
the sale of the StoreKare for Subway software and related assets.
During fiscal 2000, the Company anticipates additional gross profit
on this installment sale of approximately $16,000 as the remaining
installment payments totalling $20,000 are received by the Company.

     The Company incurred interest expense of $486,614 and
$393,699, during fiscal 1999 and 1998, respectively.  This increase
was due to the increasing amount of interest, $438,398 and 346,015,
for fiscal 1999 and 1998, 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.

                                  13
<PAGE>
ITEM 7.FINANCIAL STATEMENTS

                                 SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                                  INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                       Page


        Report of Independent Certified Public Accountants -
                 Infante, Lago & Company                                F-1

        Consolidated Balance Sheet
                 March 31, 1999                                         F-2-3

        Consolidated Statements of Operations
                 Years Ended March 31, 1999 and 1998                    F-4

        Consolidated Statements of Capital Deficiency
                 Years Ended March 31, 1999 and 1998                    F-5

        Consolidated Statements of Cash Flows
                 Years Ended March 31, 1999 and 1998                    F-6-7

        Notes to Consolidated Financial Statements
                 March 31, 1999 and 1998                                F-8-21

                                      14
<PAGE>
                                        REPORT OF INDEPENDENT AUDITORS



To the Stockholders and Directors
SK Technologies Corporation and its Subsidiaries

We have audited the accompanying consolidated balance sheet of SK
Technologies Corporation and its Subsidiaries (the "Company") as of
March 31, 1999, and the related consolidated statements of
operations, stockholders' deficiency and cash flows for the year
then ended.  These consolidated financial statements are the
responsibility of the Company's management.  Our responsibility is
to express an opinion on the consolidated financial statements
based on our audit.  The consolidated financial statements of SK
Technologies Corporation and its Subsidiaries as of March 31, 1998,
were audited by other auditors whose report dated May 15, 1998,
expressed an unqualified opinion on those statements.

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

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of SK Technologies Corporation and its
Subsidiaries at March 31, 1999, and the consolidated results of
their operations and their cash flows for the year then ended, in
conformity with generally accepted accounting principles.

Infante, Lago & Company

June 25, 1999

                               F-1
<PAGE>
                                 SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                                          CONSOLIDATED BALANCE SHEET
                                                MARCH 31, 1999

                                                    ASSETS



Current Assets:
  Cash                                               $   29,188
  Trade accounts receivable, net of
    allowance for doubtful accounts
    of approximately $30,000                              6,065
  Inventories                                            25,400
  Current portion of installment
    accounts receivable                                  20,000
                                                     ----------
     Total Current Assets                                80,653

Property and Equipment, Net                              63,161

Other Assets:
  Software development costs, net
    of accumulated amortization
    of $759,123                                         303,697
  Other, net                                             20,224
                                                     ----------
    Total Other Assets                                  323,921
                                                     ----------
                                                     $  467,735
                                                     ==========


                                        (Continued on following page.)

                                                      F-2
<PAGE>
                                 SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                                      CONSOLIDATED BALANCE SHEET (CONT'D)
                                                MARCH 31, 1999


                                      LIABILITIES AND CAPITAL DEFICIENCY


Current Liabilities:
  Accounts payable                                   $   44,577
  Accrued expenses                                      102,254
  Due to shareholders/officers/directors              1,920,963
  Current portion of capital lease obligations            7,100
  Current portion of notes payable to shareholder        12,000
  Loans payable shareholders/directors                4,723,500
  Deferred income                                        32,361
                                                     ----------
    Total Current Liabilities                         6,842,755

Notes payable to shareholder, less current portion      388,000

Deferred gross profit on installment sale                16,045

Capital lease obligations, less current portion           3,640

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                               (18,906,548)
                                                     ----------
     Capital Deficiency                              (6,782,705)
                                                     ----------
                                                     $  467,735
                                                     ==========


                                            See accompanying notes.

                                                     F-3
<PAGE>
                   SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                        YEARS ENDED MARCH 31, 1999 AND 1998


                                                1999               1998

Revenues:
  Equipment, software sales and
    support                                 $   806,759        $   854,258

Cost of Revenues:
  Cost of equipment sold                        134,354            129,882
  Amortization of software
    development costs                           206,657            251,608
  Research and development expense              102,409            114,106
                                            -----------        -----------
                                                443,420            495,596
                                            -----------        -----------
                                                363,339            358,662

Selling, General and Administrative
Expenses:
  Compensation and payroll taxes                957,357          1,078,447
  Other selling, general and
    administrative expenses                     392,521            445,854
                                            -----------        -----------
                                              1,349,878          1,524,301
                                            -----------        -----------
Operating loss                                 (986,539)        (1,165,639)

Other (Expenses) Income:
  Gross profit on installment sale               40,111             84,235
  Interest expense                             (486,614)          (393,669)
  Other, net                                    199,077             (2,660)
                                            -----------        -----------
    Total Other Expenses                       (247,426)          (312,094)
                                            -----------        -----------
Net loss                                    $(1,233,965)       $(1,477,733)
                                            ===========        ===========
Basic Loss Per Common Share                 $      (.19)       $      (.23)
                                            ===========        ===========
Diluted Loss Per Common Share               $      (.19)       $      (.23)
                                            ===========        ===========
Weighted Average Number of
  Common Shares Outstanding                   6,357,828          6,336,724
                                            ===========        ===========

                           See accompanying notes.

                                    F-4
<PAGE>
                  SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CAPITAL DEFICIENCY
                      YEARS ENDED MARCH 31, 1999 AND 1998


                  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, 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

Net Loss                      -               -                  -         -
                       ________            ____          _________    ______
Balance at
 March 31, 1999         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, 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)

Net Loss                          -        (1,233,965)       (1,233,965)
                         __________       ____________       ___________
Balance at
 March 31, 1999          12,117,031      $(18,906,548)      $(6,782,705)
                         ==========       ============      ============








                                                  See accompanying notes.

                                                            F-5
<PAGE>
                     SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                           YEARS ENDED MARCH 31, 1999 AND 1998

                                                    1999           1998

Cash Flows From Operating Activities:
  Net loss                                      $(1,233,965)   $(1,477,733)
  Adjustments to reconcile net loss to
    net cash used in operating activities:
      Depreciation                                   29,659         34,892
      Amortization                                  206,657        251,608
      Disposal of fixed assets                          288         41,702
  Changes in operating assets and liabilities:
      Trade accounts receivable                      73,771         13,650
      Inventories                                    (5,449)          (364)
      Installment accounts receivable                50,000        (70,000)
      Accounts payable                              (42,344)        39,430
      Accrued expenses                              (17,106)         9,873
      Due to shareholders/directors                 435,272        329,083
      Deferred income                               (89,761)       (19,880)
      Deferred gross profit on installment sale     (40,112)        56,157
                                                   ---------      ---------
        Net cash used in operating activities      (633,090)      (791,582)

Cash Flows From Investing Activities:
  Purchases of property and equipment                (3,368)       (39,260)
  Additions to software development costs          (134,919)      (144,418)
  Net decrease in other assets                        2,768          2,214
                                                   ---------      ---------
    Net cash used in investing activities          (135,519)      (181,464)

Cash Flows from Financing Activities:
  Proceeds from loans from shareholders/directors   782,000        923,500
  Principal payments on capital lease obligations   (23,101)       (14,872)
                                                    --------       --------
      Net cash provided by financing activities     758,899        908,628
                                                    -------        --------

      Decrease in cash                               (9,710)       (64,418)

Cash at beginning of year                            38,898        103,316
                                                    --------       --------

Cash at end of year                              $   29,188      $  38,898
                                                    ========       ========

Supplemental disclosure of cash flow information:
  Cash paid for interest                         $   43,069      $  36,933
                                                    ========       ========

                                                 (Continued on following page.)

                                                                F-6
<PAGE>
                                  SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENT OF CASH FLOWS (CONT'D)
                                      YEARS ENDED MARCH 31, 1999 AND 1998


Supplemental Schedule of Non-Cash Investing and Financing
Activities

     During fiscal 1999 and 1998, the Company entered into
capitalized lease obligations amounting to $7,940 and $17,310,
respectively.

                                           See accompanying notes.

                                                        F-7
<PAGE>
                                  SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
                                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                            MARCH 31, 1999 AND 1998

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.

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 exist.  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.

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.

                                  F-8
<PAGE>
             SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       MARCH 31, 1999 AND 1998

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
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.

                              F-9
<PAGE>
          SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    MARCH 31, 1999 AND 1998

     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 $32,361 from support contracts to
be recognized ratably over the terms of the contracts.

     Pursuant to a 1994 agreement between the Company and an
unrelated party, a prepayment of $91,683 was included in deferred
income.  The Company pursued a settlement regarding the 1994
agreement through arbitration.  On October 21, 1998 a settlement of
$104,804 ($125,000 less legal fees and expenses of $20,196) was
paid to the Company and recorded as other income.  According to the
settlement, the deferred income of $91,683, from the unrelated
party, was reclassified as other income.  As a result of this
settlement, a total of $196,487 is included in other income for the
year ended March 31, 1999, as reflected on the Statement of
Operations.

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

                              F-10
<PAGE>
            SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       MARCH 31, 1999 AND 1998

options and warrants or conversion of convertible securities have
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 Agreement provides that the Company will
receive a minimum of $175,000 of which $55,000 was received upon
signing the Agreement and an additional $100,000 was received
through March 31, 1999.  The Agreement provided that the Company

                              F-11
<PAGE>

             SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          MARCH 31. 1999 AND 1998

would receive 24 monthly payments of, the greater of $5,000 or 10%
of gross sales of the Buyer of any 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 $40,111 and
$84,235 during fiscal 1999 and 1998, respectively, as reflected on
the Statement of Operations.  At March 31, 1999 the Balance Sheet
reflects installment accounts receivable of $20,000 and deferred
gross profit of $16,045 from this sale.

NOTE 3 -        PROPERTY AND EQUIPMENT

     At March 31, 1999, property and equipment consists of the
following:

                                                           Useful
                                                        Life (years)
Furniture and equipment           $252,719                  5-10
Leasehold improvements               3,668                     5
                                 ----------
                                   256,387
Less accumulated depreciation
       and amortization           (193,226)
                                 ----------
                                  $ 63,161
                                 ==========

     During fiscal 1999, the Company entered into capitalized lease
obligations amounting to $7,940.  Included in furniture and
equipment at March 31, 1999 is $28,183 under capital leases, which
is net of accumulated amortization of $19,374.

     During fiscal 1998 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, which are net of
accumulated depreciation, are no longer in use by the Company and
accordingly losses of $7,375 on disposal of fixed assets are
included in other expenses for fiscal 1998.

     The Company leases 7,029 square feet of office space from an
unrelated entity for $9,597 per month through January 2000,
pursuant to a lease which expires January 31, 2002.  This amount
includes rent of $5,758 per month which will increase 4.5% annually
for the next two years and additional charges for the Company's
allocated share of expenses for 1999.  The expense allocation is
adjusted annually.  Rental expenses were $108,448 and $110,847 in
fiscal 1999 and 1998, respectively.

                              F-12
<PAGE>
              SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MARCH 31, 1999 AND 1998

     Future minimum lease payments under noncancellable operating
leases at March 31, 1999  are as follows:

                Fiscal Year               Minimum Payment

                  2000                       $ 115,682
                  2001                       $ 118,815
                  2002                       $ 108,946
                                             ---------
                                             $ 343,443
                                             =========

NOTE 4 -        SOFTWARE DEVELOPMENT COSTS

     The Company released version 3.3.20 of its retail product,
during the second quarter of fiscal 1999, and expects to release a
new version of its retail product during the second quarter of
fiscal 2000.

     The Company capitalized approximately $135,000 and $160,000 of
software development costs during fiscal 1999 and 1998,
respectively.

     Amortization of software development costs was approximately
$207,000 and $252,000 during fiscal 1999 and 1998, respectively.

NOTE 5 -        NOTES PAYABLE TO SHAREHOLDER

     At March 31, 1999 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 paying
$1,000 principal each month, effective April 1999.  Repayment of
the remaining loan will begin in November 2003 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, 1999 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.  Interest expense of $40,000 was incurred on this
note in each fiscal 1999 and 1998.  None of the interest was
converted to stock.

                             F-13
<PAGE>
             SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        MARCH 31, 1999 AND 1998

NOTE 6 -        CAPITALIZED LEASE OBLIGATIONS

     Certain equipment is leased under capital lease agreements
expiring through fiscal 2001 and are included in furniture and
equipment.  Future minimum commitments by year under noncancellable
capital leases at March 31, 1999 are as follows:

                                          Year Ended
                                           March 31            Amount

                                             2000            $ 10,403
                                             2001               4,402
                                                               ------
                Total minimum lease payments                   14,805

                Less:             Amount representing
                  interest (12%) and deferred
                  maintenance charges                          (4,065)
                                                               ------
                Present value of net minimum
                  lease payments                               10,740
                Less:             current portion               7,100
                                                               ------
                Long-term portion of capital
                  lease obligations                          $  3,640
                                                               ======

NOTE 7 -        CAPITAL DEFICIENCY

     At March 31, 1999 there were 490,073 private warrants
outstanding, which were issued pursuant to a private offering in
1993.  Such warrants are convertible into 490,073 shares of Common
Stock at a conversion price of $1.00 per share and were extended to
expire in March 2000.  In June 1999, these warrants were further
extended for two years, to expire in March 2002.

Common Stock

     The number of shares of Common Stock reserved for future
issuance at March 31, 1999 and 1998 is summarized as follows:
                                       1999             1998

Common Stock Purchase Warrants        490,073          490,073
Stock Options                       1,475,000        1,643,669
Convertible Preferred Stock           454,399          454,399
                                    ---------        ---------
                                    2,419,472        2,588,141
                                    =========        =========

                                 F-14
<PAGE>
            SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MARCH 31, 1999 AND 1998

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, 1999.

     Two shareholder/directors of the Company and their related
entities have provided short term loans to the Company totalling
$4,723,500, through March 31, 1999, of which $3,941,500 was
received from March 1995 through March 31, 1998, and $782,000 was
received during fiscal 1999.  These loans accrue interest at 10%
per annum, $1,127,456 through March 31, 1999 and are due on demand.
During the period April 1, through May 31, 1999 additional short
term loans of $136,000 were provided to the Company.  In December
1996, the Company collateralized these loans with the StoreKare
software and documentation.  Short term loans to the Company
through April 30, 1999, totalling $4,789,500, will be converted to
Common and Preferred Stock and these two shareholder/directors of
the Company and their related entities have agreed to forgive all
interest accrued on these loans (See Note 13).

     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 and is included in
accounts payable due to shareholders/officers/directors at March
31, 1999.

     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 the Finder's agreement between the Company
and CHG the Company accrued finders fees of $493,000 through
December 1996 which is included in accounts payable due to
shareholders/officers/directors at March 31, 1999.

NOTE 9 -        INCOME TAXES

     At March 31, 1999 the Company has net operating loss
carryforwards of approximately $18 million that can be used to
offset future taxable income, that expire in the years 2004 through
2013.  In fiscal 1995, the Company had ownership changes as defined

                              F-15
<PAGE>
          SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     MARCH 31, 1999 AND 1998

under Internal Revenue Code Section 382 (Section 382).  As such,
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, 1999 are as follows:

                Software development costs              $   322,000
                Net operating losses                      6,210,900
                Research and development costs              305,000
                                                        -----------
                                                          6,837,900
                Valuation allowance                      (6,837,900)
                                                        -----------
                                                        $         -
                                                        ===========

     The net change in the valuation allowance during 1999 was
$82,839.

     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, 1999 and
1998 is as follows:
                                             1999                1998

     Tax at U.S. statutory rates          $(464,341)        $  (264,270)
     Unrecognized benefit of net
        operating losses                    464,341             264,270
                                           ---------        -----------
                                          $       -         $         -
                                          =========         ===========


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
at not less than 100 percent of the fair market value of the

                             F-16
<PAGE>
          SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     MARCH 31, 1999 AND 1998

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.

     As of March 31, 1999 there were 1,600 options outstanding
pursuant to the 1990 Option Plan which 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, 1999, 894,000 options granted pursuant to this plan
are ISOs and 125,000 options granted pursuant to this plan are
NSOs.

     During fiscal 1999 and 1998 options for 50,000 and 36,000
shares of Common Stock were granted to employees and during fiscal
1998 options for 25,000 shares of Common Stock were granted to
officers and directors of the Company.  Such options are
exercisable at $.32 and expire through May 2003, five years from
the date of grant.  As of March 31, 1999, there are options for

                             F-17
<PAGE>
        SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  MARCH 31, 1999 AND 1998

1,019,000 shares of Common Stock outstanding of which 904,905 are
exercisable.

Other Stock Options

     As of March 31, 1999, other stock options of 25,000 were
outstanding.  Such options expire through 2002.  As of March 31,
1999, 25,000 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
1999; risk-free rate of return of 5.00%; dividend yield of 0.000%;
volatility factor of the expected market price of the Company's
common stock of 1.774 and a weighted-average expected life of the
options of two to five 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
<PAGE>
           SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      MARCH 31, 1999 AND 1998

Information regarding stock options for the years ended March 31,
1999 and March 31, 1998 is summarized as follows:
                                                             Weighted Average
                                     Number of                Exercise Price
                                      Shares                   Per Share

Outstanding at March 31, 1997        1,343,019                    $ .63
Exercised                                    -                        -
Expired                               (160,000)                   $ .26
Forfeited                                    -                        -
Cancelled                              (42,500)                   $ .01
Granted                                 61,000                    $ .02
                                     ----------
Outstanding at March 31, 1998        1,201,519                    $ .45
Exercised                                    -                        -
Expired                               (168,669)                   $ .16
Forfeited                                    -                    $   -
Cancelled                              (37,250)                   $ .01
Granted                                 50,000                    $ .02
                                     ----------
Outstanding at March 31, 1999        1,045,600                    $ .37
                                     ==========
Exercisable at March 31, 1999          931,505                    $ .33
                                     ==========
Reserved for future option
  grants at March 31, 1999             429,400
                                    ==========


     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 1999 and 1998 pro forma information
follows:

                                      1999              1998

       Net Loss                   $(1,261,305)      $(1,509,867)
                                  ============      ============
       Loss per common share      $      (.20)      $      (.24)
                                  ============      ============

     The 1999 and 1998 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
<PAGE>
         SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    MARCH 31, 1999 AND 1998

     The exercise price of options outstanding at March 31, 1999
ranged between $.32 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 1999, 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, 1999 are as follows:


                                        Carrying
                                         Amount            Fair Value

Cash and cash                           $   29,188         $   29,188
 equivalents

Loans payable to shareholders/           5,123,500          5,123,500
 directors/related parties

                                       F-20
<PAGE>
          SK TECHNOLOGIES CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     MARCH 31, 1999 AND 1998

NOTE 13 -   SUBSEQUENT EVENTS

     On June 15, 1999, the Board of Directors designated 3,000
shares of Series D, 8% cumulative, $1,000 Preferred Stock with the
rights, preferences, privileges and restrictions set forth in a
Certificate of Designation to be filed with the State of Delaware.
These shares of Preferred Stock will be available for conversion of
certain short term debt, accrued fees and bonuses and future
funding to the Company.

     In June 1999 two shareholder/directors of the Company and
their related entities agreed to convert short term loans through
April 30, 1999 totalling $4,789,500 to Common and Preferred Stock
as follows:

                $3,997,000 will be converted at .$60 per share into
                6,661,667 shares of Common Stock and,

                $792,500 will be converted into Series D, 8% cumulative,
                Preferred Stock upon filing a Certificate of Designation
                with the State of Delaware.

     Interest in the amount of $1,127,456 has been accrued through
March 31, 1999 on these loans and additional interest of $107,333
has been accrued from April 1 through June 21, 1999 on these loans.
These two shareholder/directors of the Company and their related
entities have agreed to forgive the interest in the amount of
$1,234,789 accrued through June 21, 1999 on these loans (see Note
8).

     On June 22, 1999, one shareholder/director of the Company
committed to provide funding to the Company in the amount of
$405,000, based on the Company's projected cash deficiencies for
the remainder of fiscal 2000, for shares of the Company's Common
Stock at $.125 per share.  If actual cash deficiencies exceed the
projected amount, this shareholder/director agreed to fund any
additional cash deficiencies through March 31, 2000, with the terms
of the additional funding to be determined at such time.

                              F-21
<PAGE>
ITEM 8.         CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                ACCOUNTING AND FINANCIAL DISCLOSURE

     Pursuant to a written consent dated March 4, 1999, the Board
of Directors of the Company approved the engagement of Infante,
Lago & Company as its independent auditors for the fiscal year
ending March 31, 1999 to replace the firm of Ernst & Young LLP ("E
& Y"), who were dismissed as auditors of the Company effective
immediately.

     The reports of E & Y on the Company's financial statements for
the past two fiscal years did not contain an adverse opinion or a
disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope or accounting principles.

     In connection with the audits of the Company's financial
statements for each of the two fiscal years ended March 31, 1998,
and in the subsequent interim period, there were no disagreements
with E & Y on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope and procedures
which, if not resolved to the satisfaction of E & Y would have
caused E & Y to make reference to the matter in their report.


                                 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, 1999.  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            58      President/Chief Executive
                                       Officer/Director

Melvin T. Goldberger           79      Treasurer/Director

Roger N. Oesterling            56      Executive Vice President

Douglas A. Beard               67      Executive Vice President

Susan L. Fedderman             46      Executive Vice President/
                                       Secretary

                                  16
<PAGE>
Gary S. Spirer                 54      Director

David H. Peipers               42      Director

C. Shelton James               59      Director

Michael P. Siewruk             42      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

                              17
<PAGE>
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.  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.

     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 and Cornerhouse
Limited Partnership, which make long term investments in the
securities of both public and private companies, since 1989.  He is
a founder and Chairman of 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 DRS Inc. since 1999, Concurrent Computer Corporation
since September 1994 and CSPI since December 1994.  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.

                                18
<PAGE>
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,
other than one Form 4 which will be filed shortly to report an
event which occurred in December 1998.  This Form 4 will report
that 1,312,421 shares of the Company's Common Stock which were
beneficially owned by a director of the Company, were distributed
to several individuals and entities, with 681,856 shares remaining
with the director of the Company.

                                  19
<PAGE>
ITEM 10.                        EXECUTIVE COMPENSATION:

     The following tables set forth executive compensation for the
last three fiscal years, stock awards and stock option values for
the fiscal 1999.
                                Annual Compensation

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

Calvin Shoemaker     1997     75,000     13,047         0
President/Chief      1998     75,000     13,245         0
Executive Officer    1999     75,000     12,636         0

All executive
officers as a        1997    209,626     36,242         0
group (four          1998    262,500     39,734         0
persons)             1999    273,115     39,258         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             0             0        0          0
Executive Officer           0             0        0          0

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



  (1)             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.

                                    20
<PAGE>
<TABLE>
                                       Option/SAR Grants in Fiscal 1999

<CAPTION>
                       Individual Grants

 (a)                             (b)                   (c)                (d)              (e)
                              Number of
                              Securities           % of Total
                              Underlying           Options/SARs         Exercise
                              Options/             Granted to           or Base
                              SARs                 Employees in         Price           Expiration
Name                          Granted(#)(1)        Fiscal Year          ($/SH)          Date
<S>                           <C>                  <C>                  <C>             <C>
Calvin Shoemaker
President/Chief
Executive Officer             0                    0



  (1)             No options were granted to executive officers in fiscal
                  1999.
</TABLE>




<TABLE>
                                Aggregated Option/SAR Exercises in Fiscal 1999
                                     and March 31, 1999 Option/SAR Values


<CAPTION>
 (a)                             (b)                   (c)             (d)                     (e)
                                                                     Number of
                                                                     Securities             Value of
                                                                     Underlying             Unexercised
                                                                     Unexercised            In-the-Money
                                                                     Options/SARs at        Options/SARs at
                                                                     March 31, 1999 (#)     March 31, 1999 ($)

                              Shares Acquired      Value             Exercisable/           Exercisable/
Name                          on Exercise (#)      Realized          Unexercisable          Unexercisable
<S>                           <C>                  <C>               <C>                    <C>
Calvin Shoemaker
President/
Chief Executive
Officer                       0                    0                 400,000/0              0/0
</TABLE>

                                                   21
<PAGE>
ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT:

     The following table sets forth, as of June 21, 1999, 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)(8)(9)          678,845           0.10%
888 Seventh Avenue
New York, NY 10106

Cornerhouse Ltd. Ptshp.(3)(8)(9)    1,156,116           0.170%
David Peipers, G.P.
888 Seventh Avenue
New York, NY 10106

Winsome Ltd. Ptshp(3)(8)(9)           603,909           0.089%
David Peipers, G.P.
888 Seventh Avenue
New York, NY 10106

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

                                           22
<PAGE>
Fundamental Active
  Investors Ltd II(6)(8)            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)             3,995,698           0.587%

____________________________

(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 2,255,536 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 447,140 shares of Common Stock at an exercise
        price of $1.00 per share are held by certain of these
        executive officers and directors.

                                        23
<PAGE>
(8)     Does not include 6,661,667 shares of Common Stock to be issued
        upon the conversion of short term loans totalling $3,997,000.

(9)     Does not include the Series D Preferred Stock to be issued
        upon conversion of $792,500 of short term loans and upon
        filing a Certificate of Designation with the State of
        Delaware.


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, 1999.

     Two shareholder/directors of the Company and their related
entities have provided short term loans to the Company totalling
$4,723,500, through March 31, 1999, of which $3,941,500 was
received from March 1995 through March 31, 1998, and $782,000 was
received during fiscal 1999.  These loans accrue interest at 10%
per annum, $1,127,456 through March 31, 1999 and are due on demand.
During the period April 1, through May 31, 1999 additional short
term loans of $136,000 were provided to the Company.  In December
1996, the Company collateralized these loans with the StoreKare
software and documentation.  Short term loans to the Company
through April 30, 1999, totalling $4,789,500, will be converted to
Common and Preferred Stock and these two shareholder/directors of
the Company and their related entities have agreed to forgive all
interest accrued on these loans (See Note 13).

     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 and is included in
accounts payable due to shareholders/officers/directors at March
31, 1999.

     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 the Finder's agreement between the Company
and CHG the Company accrued finders fees of $493,000 through
December 1996 which is included in accounts payable due to
shareholders/officers/directors at March 31, 1999.

                                    24
<PAGE>
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

                                             25
<PAGE>
                              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.

                                               26
<PAGE>
                 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.

                 27.          Financial Data Schedule for the Year Ended March
                              31, 1999


        (b)      Reports on Form 8-K

                 On March 4, 1999 the Company filed a report on Form 8-K
                 with the Securities and Exchange Commission and reported
                 a change in the Company's independent auditors under Item
                 4.

                                            27
<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, 1999               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, 1999
Calvin S. Shoemaker           Executive Officer/
                              Director

/s/ Melvin T. Goldberger      Treasurer/Director/      June 29, 1999
Melvin T. Goldberger          Principal Accounting
                              Officer

/s/ C. Shelton James          Director                 June 29, 1999
C. Shelton James

/s/ David H. Peipers          Director                 June 29, 1999
David H. Peipers

/s/ Michael Siewruk           Director                 June 29, 1999
Michael Siewruk

Gary Spirer                   Director

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