SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                                  FORM 10-KS B
                            Annual Report Pursuant to
                       the Securities Exchange Act of 1934

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

                       For the fiscal year ended 12-31-95
                          Commission file number 012139

                          LEESBURG LAND & MINING, INC.
                          ----------------------------
             (Exact name of registrant as specified in its charter)

              Colorado                                   82-0379959
      ------------------------                       ------------------
      (State of incorporation)                        (I.R.S. Employer
                                                     Identification No.)

               c/o 10200 W. 44th Ave., #400, Wheat Ridge, CO 80033
               ---------------------------------------------------
               (Address of principal executive offices) (Zip Code)


            Registrant's telephone number, including area code: None
                                                                ----

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

                            Title of each class: None
                                                 -----

                 Name of each exchange on which registered: N/A
                                                            ----

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

                    Title of each class: Common No Par Value

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2)  has  been  subject  to the  filing
requirements for at least the past 90 days.

                               Yes          No   X
                                   -----       -----

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

State issuer's revenues for its most recent fiscal year. $0

Transitional Small Business Disclosure Format:

                             Yes            No   X
                                 -----         -----

<PAGE>


Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant as of December 31, 1995: $0

Number of outstanding  shares of the  registrant's no par value common stock, as
of December 31, 1995: 52,476,317*.



*Includes  shares  authorized  by the Board in  settlement  of accounts  but not
issued at the transfer agent as of December 31, 1995.


<PAGE>

                                     PART 1

Item 1.  Business

     Leesburg Land & Mining, Inc. (the Company), was organized under the laws of
     the State of Colorado on June 21, 1983.  The Company is in the  development
     stage as defined in Financial Standards Board Statement No. 7.

     In 1983, the Company sold 30,000,000 shares of no par value common stock in
     an S-18 public  offering.  The offering  price for each share was $.10. The
     Company received $2,550,000, net of offering costs, from the sale of common
     stock in the public offering.  In 1985 the shareholders  authorized and the
     board implemented a one for forty share reverse split of the common shares.

     From June 21,  1983  (Inception)  to  December  31,  1984,  the Company was
     engaged in the  exploitation  of a gold placer  claim  located near Salmon,
     Idaho.  As of December  31,  1984,  the  Company's  only  mining  claim was
     abandoned.  Pursuant  to a change in control of the  company in April 1985,
     the Company  purchased an interest in a coal company.  The Company sold its
     interest  in the coal  company in November  1985.  In  December  1985,  the
     Company entered into a contract with a non-affiliated  partnership to drill
     and  complete a  geothermal  well,  construct  a power  plant and assist in
     obtaining needed financing on a fixed-price  basis. The geothermal well was
     plugged and  abandoned  in 1986 when the  underground  resource  was deemed
     inadequate.  The  Partnership  failed to make payments to the Company under
     the contract.  The Company has never derived significant  revenues from any
     of its attempted operations.

     In 1987,  the Company filed for a Chapter 11  bankruptcy,  but  voluntarily
     withdrew the filing in 1988.  Since 1988,  the Company has been selling its
     claims,   property  and  equipment.  In  addition,  the  Company  has  been
     eliminating  its debt and seeking a private company with which to merge. No
     such company has been identified or found.

     No  significant  business  activity was conducted by the Company during the
     fiscal year. As a result, no income was realized by the Company in its last
     fiscal year.

     The Company was inactive and presently does not participate in any industry
     segment.  The Company had no material  revenues,  or  operating  profits or
     identifiable assets attributable to its industry segment.

Item 2.  Property

     The  Company  does not have any  formal  offices at year end.  Records  are
     maintained and mail received at 10200 W. 44th Ave.,  #400,  Wheat Ridge, CO
     80033.  The company owns no  property,  but has three (3) pieces of surplus
     and mining equipment of a value of less than $1,000.



<PAGE>
         
Item 3.   Legal Proceedings

     The Company is a party to no pending legal proceedings, nor is its property
     subject  to such  proceedings,  at year  end  1995,  except a  judgment  by
     Halliburton for $26,000 which was settled in January of 1996 for $14,000.

Item 4.   Submission of Matters to a Vote of Security Holders

     No matters were submitted  during the fiscal year covered by this report to
     a vote of security  holders of the  Company,  through the  solicitation  of
     proxies or otherwise.

                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

     As of the date of this report,  management knows of no trading or quotation
     of the Company's common stock. The range of high and low bid quotations for
     each fiscal  quarter  since the last  report,  as reported by the  National
     Quotation Bureau Incorporated, was as follows:

                    1995                       High          Low
              --------------                   ----          ---

              First quarter                      *             *
              Second quarter                     *             *
              Third quarter                      *             *
              Fourth quarter                     *             *

                    1994                       High          Low
              --------------                   ----          ---

              First quarter                      *             *
              Second quarter                     *             *
              Third quarter                      *             *
              Fourth quarter                     *             *

----------
     * No quotations reported

     The above quotations reflect inter-dealer  prices,  without retail mark-up,
     mark-down,   or  commission  and  may  not  necessarily   represent  actual
     transactions.

     As of December  31, 1995 there were 1,059 record  holders of the  Company's
     common Stock.



<PAGE>

     The Company has not declared or paid any cash dividends on its common stock
     and does not anticipate paying dividends for the foreseeable future.

Item 6.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations
         ---------------------------------------------

         Financial Condition and Changes in Financial Condition
         ------------------------------------------------------

1995 Compared to 1994

     No operations  were  conducted and no revenues were generated in the fiscal
     year and the company  received no income in 1995 as compared with $2,883 in
     miscellaneous  income in 1994.  The Company at year end had no capital,  no
     cash, and a few pieces of miscellaneous  mining  equipment.  The Company at
     year end was totally illiquid and needed cash infusions from  shareholders,
     or loans from others to provide capital.

1994 Compared to 1993

     No operations  were  conducted and no revenues were generated in the fiscal
     year although the company received $2,883 in  miscellaneous  income in 1994
     as compared  with $6,834 in  miscellaneous  income in 1993.  The Company at
     year end had no capital, no cash, and a few pieces of miscellaneous  mining
     equipment.  The  Company at year end was  totally  illiquid  and would have
     needed cash infusions from  shareholders to provide capital,  or loans from
     any sources.

         Results of Operations
         ---------------------

1995 Compared to 1994

     During the fiscal year ended December 31, 1995, the Company incurred $5,415
     in general and  administrative  expenses,  $1,100 in interest expense,  and
     $18,200 for  services  contributed  by officers.  This  compares to 1994 in
     which the Company incurred $28,072 in general and administrative  expenses,
     $14,680 in  interest  expenses,  and $10,000 for  services  contributed  by
     officers.  At present the Company  has no  business  income or  operations.
     Accordingly,   the  reported  financial   information  herein  may  not  be
     indicative of future operating  results.  Total costs and expenses for 1995
     were  $24,715 as  compared  to  $52,752 in 1994.  The net loss for 1995 was
     ($24,715)  and for 1994 the net loss  was  ($49,869).  In 1995 the  Company
     recognized an extraordinary  item in reduction of payables of $38,626 which
     adjusted its net income to $13,911.


1994 Compared to 1993

     During the fiscal  year ended  December  31,  1994,  the  Company  incurred
     $28,072 general and administrative  expenses,  $14,680 in interest expense,
     and $10,000  for  services  contributed  by  officers.  In 1993 the Company
     incurred  $13,685  in  General  and  Administrative  expenses,  $59,283  in
     interest  expense,  and  $30,000 for  services  rendered  by  officers.  At
     present, the Company has no business income or operations. Accordingly, the
     reported  financial  information  herein  may not be  indicative  of future
     operating results.



<PAGE>

Item 7.    Financial Statements and Supplementary Data
           -------------------------------------------

           Please refer to pages F-1 through F-12.

Item 8.    Changes in and Disagreements on Accounting and Financial Disclosure
           -------------------------------------------------------------------

     In  connection  with audits of two most recent fiscal years and any interim
     period  preceding  resignation,  no  disagreements  exist  with any  former
     accountant on any matter of accounting  principles or practices,  financial
     statement disclosure,  or auditing scope of procedure,  which disagreements
     if not resolved to the  satisfaction  of the former  accountant  would have
     caused him to make  reference in connection  with his report to the subject
     matter of the disagreement(s).

     The principal  accountant's  report on the financial  statements for any of
     the past two years  contained no adverse opinion or a disclaimer of opinion
     nor was qualified as to uncertainty,  audit scope, or accounting principles
     except for the "going concern" qualification.


                                    PART III

Item 9.  Directors and Executive Officers of the
         Registrant and Compliance with Section 16(a)
         --------------------------------------------

     The  directors  and  executive  officers of the Company as of December  31,
     1995, are as follows:**

    Name                      Age                  Position
    ----                      ---                  --------

Robert Beaton                  48                President, Director
James Poulos                   69                Vice President, Director
Michael Schranz                53                Secretary, Treasurer, Director

     The term of office  of each  director  and  executive  officer  ends at, or
     immediately  after, the next annual meeting of shareholders of the Company.
     Except as otherwise  indicated,  no  organization  by which any director or
     officer has been previously employed is an affiliate,  parent or subsidiary
     of the Company.

     Robert Beaton,  age 48,  received his BA in Business from the University of
     Alabama in 1970.  Mr.  Beaton  has acted as  President  and a  director  of
     Leesburg since 1985. He has acted as an independent  consultant for mergers
     and acquisitions by public companies, for his own account since 1988.


<PAGE>

     James Poulos,  age 69, acted as a mining  Engineer for his career with only
     informal on the job  training.  He has acted as an officer and  director of
     the Company since 1985. He is otherwise retired.

     Michael Schranz, age 53, obtained his B.S. in Civil Engineering from Purdue
     University  in 1965 and  received  his MBA at the  University  of Denver in
     1975. He is a Certified Public  Accountant in Colorado.  He has been a Vice
     President and Director of  Registrant  since 1988.  Mr.  Schranz has been a
     Vice  President  and  Director of One Capital  Corp.  from 1982-96 and Vice
     President and Director of Overthrust  Resources,  Ltd. from 1980-96. He has
     been Managing Director of Polaris Coal Co., from 1988-96.

     Section  16(a) of the  Securities  Exchange  Act of 1934,  as amended  (the
     "Exchange Act"), requires the Company's officers and directors, and persons
     who own  more  than  10% of a  registered  class  of the  Company's  equity
     securities, to file reports of ownership and changes in ownership of equity
     securities of the Company with the Securities  and Exchange  Commission and
     NASDAQ. Officers,  directors and greater-than 10% shareholders are required
     by the Securities and Exchange Commission regulation to furnish the Company
     with copies of all Section 16(a) filings.

     1. The following people did not file any reports under Section 16(a) during
     the most recent fiscal year or prior years:

         a.       Robert Beaton            President and Director
         b.       James Poulos             Secretary and Director
         c.       Michael Schranz          Vice President and Director


     2. For each person, listed by subparagraph letter above:


Number of late                Number of                  Known failures
reports                       transactions not           to file forms
---------------               reported on a              ----------------
                              timely basis
                              -----------------
a.   1991 to 1995(6)          1 (1995)                   i) Annual Form
                                                         5(x5)(1991-1995)
                                                         ii)Form 4 (1995)

b.   1991 to 1995(6)          1 (1995)                   i) Annual Form
                                                         5(x5)(1991-1995)
                                                         ii)Form 4 (1995)

c.   1991 to 1995(8)          2 (1995)                   i) Annual Form
                                                         5(x5)(1991-1995)
                                                         ii)Forms 4 (1995), 3



<PAGE>

     The Company  officers and Directors  have  represented in writing that they
     filed all known reports due under Section 16(a) for 1994 and 1995.

Item 10.  Executive Compensation

     The Company  accrued a total of $18,300 in  compensation  to the  executive
     officers as a group for services  rendered to the Company in all capacities
     during  the  1995  fiscal  year.   Robert  Beaton,   who  had  accrued  the
     compensation, chose to contribute the entire amount as of December 31, 1995
     to  capital.  No one  executive  officer  received,  or has accrued for his
     benefit,  in excess of $60,000 for the year. No cash bonuses were or are to
     be paid to such persons.

     The Company does not have any employee incentive stock option plans.

     There are no plans pursuant to which cash or non-cash compensation was paid
     or  distributed  during the last fiscal year,  or is proposed to be paid or
     distributed in the future, to the executive  officers of the Company except
     that certain accruals for officer's services were settled with stock issued
     as  more  particularly  set  forth  in  "Certain  Transactions".  No  other
     compensation  not described  above was paid or distributed  during the last
     fiscal  year  to the  executive  officers  of  the  Company.  There  are no
     compensatory plans or arrangements, with respect to any executive office of
     the Company,  which result or will result from the resignation,  retirement
     or any other termination of such  individual's  employment with the Company
     or from a change in control of the Company or a change in the  individual's
     responsibilities following a change in control.




<PAGE>
<TABLE>
<CAPTION>

                                    SUMMARY COMPENSATION TABLE OF EXECUTIVES

                                        Annual Compensation                                             Awards

==========================================================================================================================
Name and            Year           Salary             Bonus          Other Annual           Restricted          Securities
Principal                          ($)                ($)            Compensation           Stock               Underlying
Position                                                             ($)                    Award(s)            Options/
                                                                                            ($)                 SARs (#)
--------------------------------------------------------------------------------------------------------------------------
<S>                 <C>            <C>                <C>            <C>                    <C>                 <C>
Robert              1993           0                  0              0                      0                   0
Beaton,
President
                  --------------------------------------------------------------------------------------------------------
                    1994           9,200              0              0                      0                   0
                                   ***
                  --------------------------------------------------------------------------------------------------------
                    1995           1,800              0              0                      0                   0
                                   ***
--------------------------------------------------------------------------------------------------------------------------

                  --------------------------------------------------------------------------------------------------------
James               1993           0                  0              0                      0                   0
Poulos,
Secretary
                  --------------------------------------------------------------------------------------------------------
                    1994           3,000              0              0                      0                   0
                                   ***
                  --------------------------------------------------------------------------------------------------------
                    1995           0                  0              0                      0                   0
--------------------------------------------------------------------------------------------------------------------------

                  --------------------------------------------------------------------------------------------------------
Michael             1993           0                  0              0                      0                   0
Schranz,
Vice
President
                  --------------------------------------------------------------------------------------------------------
                    1994           0**                0              0                      0                   0
                  --------------------------------------------------------------------------------------------------------
                  --------------------------------------------------------------------------------------------------------
                    1995           100**              0              0                      0                   0
==========================================================================================================================
</TABLE>

* Designates unpaid accruals for management services.

**  Restricted  common stock  shares  totalling  47,600,000  were issued for the
unpaid accruals for services and forgiveness of debt. (See "certain Relationship
and Related  Transactions")  The shares had no market  value and a negative  net
tangible  book  value at the time of the  award.  In 1995  2,500,000  restricted
common shares were issued for services  rendered by Michael Schranz in 1995. The
shares had no market value and a negative net tangible book value at the time of
the issuance.

     Option/SAR Grants Table (None)

     Aggregated  Option/SAR  Exercises in Last Fiscal Year an FY-End  Option/SAR
     value (None)

     Long Term Incentive Plans - Awards in Last Fiscal Year (None)




<PAGE>

                                    DIRECTOR COMPENSATION FOR LAST FISCAL YEAR

(Except for  compensation of Officers who are also Directors which  Compensation
is listed in Summary Compensation Table of Executives)
<TABLE>
<CAPTION>


                                    Cash Compensation                                   Security Grants
===================================================================================================================================
Name                               Annual               Meeting           Consulting               Number           Number of
                                   Retainer             Fees              Fees/Other               of               Securities
                                   Fees ($)             ($)               Fees ($)                 Shares           Underlying
                                                                                                   (#)              Options/SARs(#)
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                <C>                  <C>               <C>                      <C>              <C>
A. Director                        0                    0                 0                        0                0
Robert Beaton
-----------------------------------------------------------------------------------------------------------------------------------
B. Director                        0                    0                 0                        0                0
James Poulos
-----------------------------------------------------------------------------------------------------------------------------------
C. Director                        0                    0                 0                        0                0
Michael Schranz
===================================================================================================================================
</TABLE>

Item 11.  Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth  information,  as of December 31, 1995, with
     respect to the  beneficial  ownership of the  Company's no par value common
     stock by each  person  known by the Company to be the  beneficial  owner of
     more than five percent of the outstanding common stock.
<TABLE>
<CAPTION>

   Stock           Names and Address                                     Beneficial          Percent
Title of Class     of Beneficial Owner                                    Ownership          of Class
--------------     -------------------                                    ---------          --------
<S>                <C>                                                    <C>                 <C>  
Common             American International                                 1,185,700           2.2%*
                   Systems, Inc.                                        (see note 1)
                   12002 W. 14th Avenue                                 (see note 2)
                   Golden, CO  80401
                   (Note 1:  Robert  Beaton  owns  44% of the
                   shares  of  American   International
                   Systems, Inc.)

Common             Robert Beaton                                           28,500,000         54.3%*
                   12002 W. 14th Avenue
                   Golden, CO  80401

Common             James Poulos                                            19,000,000         36.2%
                   4065 Easley Rd.
                   Golden, CO  80403
                   (Note 2:  James Poulos owns 15.95% of American
                   International Systems, Inc. which if combined
                   with his personal holding, would result in
                   38.4% ownership)

Common             Michael Schranz, V.P. & Dir.                               244,254          .4%     
                   Polaris Resources
                   410 17th Street, Ste. 1940
                   Denver, CO 80202

Common             Capital One, Inc. of which Mr. Schranz is an             2,500,000         4.8%
                   officer, director and shareholder


* combined 56.5%

</TABLE>



<PAGE>

         Security Ownership of Certain Beneficial Owners and
         Management (Continued)
         ----------------------------------------------------------------------

     The following table sets forth  information,  as of December 31, 1995, with
     respect to the  beneficial  ownership of the  Company's no par value common
     stock by the directors and officers of the Company,  both  individually and
     as a group.

<TABLE>
<CAPTION>


    Stock              Names and Address                                   Beneficial            Percent
Title of Class         of Beneficial Owner                                 Ownership            of Class
--------------         -------------------                                 ---------            --------

<S>                  <C>                                                  <C>                   <C>   
Common               
                     American International                               1,185,700              2.2%*
                     Systems, Inc.
                     12002 W. 14th Avenue
                     Golden, CO  80401
                     (Note  1:  Robert  Beaton  owns  44% of the
                     shares  of  American   International
                     Systems, Inc.)

Common               Robert Beaton, Pres & Dir.                           28,500,000            54.3%*
                     12002 W. 14th Avenue
                     Golden, CO  80401

Common               James Poulos, Secy. & Dir.                           19,000,000            36.2%
                     4065 Easley Rd.
                     Golden, CO  80403
                     (Note 2:  James Poulos owns 15.95% of American
                     International Systems, Inc. which if combined
                     with his personal holding, would result in
                     38.4% ownership)

Common               Michael Schranz, V.P. & Dir.                           244,254               .4%
                     Polaris Resources
                     410 17th Street, Ste. 1940
                     Denver, CO  80202

Common               Capital One, Inc. of which Mr. Schranz is an         2,500,000              4.8%
                     officer, director and shareholder
    
* combined 56.5%

                     Officers and Directors as a group                                          97.9%
</TABLE>


Item 12.   Certain Relationships and Related Transactions
           ----------------------------------------------

     The Company  agreed to issue and  authorized  issuance of shares to certain
     shareholders  as  compensation  and for  forgiveness  of certain claims for
     services  rendered to Robert M. Beaton & James F. Poulos for wages  accrued
     from 1987 to 1994;  The company  agreed to issue to Robert M. Beaton:  28.5
     million  shares  for $750 value and  waiver of all other  amounts;  and the
     company  agreed to issue to James F.  Poulos:  19  million  shares for $500
     value and waiver of all other amounts. In 1995 the Company issued 2,500,000
     restricted  common shares to the nominee of Michael  Schranz,  Capital One,
     Inc. for services rendered by Mr. Schranz valued at $100. The shares had no
     market value and negative net tangible book value at date of issue.




<PAGE>



                                     PART IV

Item 13.     Exhibits and Reports on Form 8-K

             The following documents are filed as part of this report:

             1.       Reports on Form 8-K: None

             2.       Exhibits:


                                      INDEX
                                                        Form 10-K
Regulation                                              Consecutive
S-K Number           Exhibit                            Page Number
----------           -------                            -----------

3.1          Articles of Incorporation          *Incorporated by reference
                                                to Registration Statement
                                                #2-87742-D

3.2          Bylaws                             *Incorporated by reference
                                                to Registration Statement
                                                #2-87742-D

27.1         Financial Data Schedule            14-25
                                                Form 10-K





<PAGE>


                                   SIGNATURES

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

                                            LEESBURG LAND & MINING, INC.
                                            -----------------------------------
                                            (Registrant)

Date:   10-31-96                             /S/  ROBERT BEATON
        --------                            -----------------------------------
                                            President, Chief Executive Officer


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

                                            LEESBURG LAND & MINING, INC.
                                            (Registrant)

Date:   10-31-96                            /S/  ROBERT BEATON
        --------                            ----------------------------------
                                                 Director

                                           /S/  MICHAEL SCHRANZ
                                           -----------------------------------
                                                Director
 
                                          /S/  JAMES POULOS
                                          ------------------------------------
                                               Director




<PAGE>


                             LEESBURG LAND & MINING

                              FINANCIAL STATEMENTS

                           DECEMBER 31, 1995 AND 1994


<PAGE>

                                    CONTENTS


                                                                   Page
                                                                   ----

         Independent auditors' report                               1

         Financial statements:

           Balance sheets                                           2

           Statements of operations                                 3

           Statements of stockholders' equity                       4

           Statements of cash flows                             5 - 6

         Notes to financial statements                         7 - 12


<PAGE>


HOLBEN, BOAK, COOPER & CO.
-------------------------------------------------------------------------------
Certified Public Accountants                 1720 S. Bellaire Street, Suite 500
Professional Corporation                     Denver, Colorado  80222
                                             (303) 759-2727 Fax (303) 759-2728




                          INDEPENDENT AUDITORS' REPORT


Board of Directors
Leesburg Land & Mining, Inc.
Golden, Colorado

We have audited the accompanying  balance sheets of Leesburg Land & Mining, Inc.
(a development  stage company) as of December 31, 1995 and 1994, and the related
statements of operations, stockholders' equity and cash flows for the years then
ended.  These  financial  statements  are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Leesburg Land & Mining, Inc. (a
development  stage company) as of December 31, 1995 and 1994, and the results of
its  operations  and cash flows for the years then  ended,  in  conformity  with
generally accepted accounting principles.

As described in Note 1 to the financial statements,  the accompanying  financial
statements have been prepared assuming that the Company will continue as a going
concern.  As  shown  in the  financial  statements,  the  Company  has  incurred
cumulative  net losses of  $4,130,781  since  inception.  At December  31, 1995,
liabilities  exceeded  assets by  $26,176  and the  Company  had no cash.  These
factors raise  substantial  doubt about the  Company's  ability to continue as a
going  concern.  The financial  statements do not include any  adjustments  that
might result from the outcome of the above uncertainty.




                           HOLBEN, BOAK, COOPER & CO.


August 23, 1996
Denver, Colorado

<PAGE>



                       LEESBURG LAND AND MINING CO., INC.
                          (A Development Stage Company)
                                 BALANCE SHEETS
                           DECEMBER 31, 1995 AND 1994




<PAGE>

                       LEESBURG LAND AND MINING CO., INC.
                          (A Development Stage Company)
                                 BALANCE SHEETS
                           DECEMBER 31, 1995 AND 1994
                                
                                                       1995            1994
                                                   -----------      -----------
ASSETS

PROPERTY AND EQUIPMENT
     Vehicle                                       $    20,818      $    20,818
     Less:  accumulated depreciation                   (20,818)         (20,818)
                                                   -----------      -----------

     TOTAL PROPERTY AND EQUIPMENT                            -                -
                                                   -----------      -----------

TOTAL ASSETS                                       $         -      $         -
                                                   ===========      ===========


LIABILTIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
     Accounts payable (Note 2)                     $    26,176      $    39,517
     Interest payable (Note 2)                               -           24,634
                                                   -----------      -----------
     TOTAL CURRENT LIABILITIES                          26,176           64,151

STOCKHOLDERS' EQUITY (DEFICIT):
     Preferred stock, 1,000,000 shares of
       no par value authorized, none issued
     Common stock, no par value;
        authorized, 100,000,000 shares;
           issued and outstanding, 52,476,317
           shares in 1995 and 49,976,317 shares
           in 1994                                   4,104,605        4,080,541

     Accumulated (deficit) during the
        development stage                           (4,130,781)      (4,144,692)
                                                   -----------      -----------

     TOTAL STOCKHOLDERS' EQUITY (DEFICIT)              (26,176)         (64,151)
                                                   -----------      -----------

TOTAL LIABILITIES AND STOCKHOLDERS'
     EQUITY (DEFICIT)                              $         -      $         -
                                                   ===========      =========== 
                                                                              
 
See notes to financial statements                                         Page 2

<PAGE>


                       LEESBURG LAND AND MINING CO., INC.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
       AND FROM JUNE 21, 1983 (INCEPTION) TO DECEMBER 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
                                                      Cumulative
                                                        During
                                                   Development Stage
                                                      (Unaudited)               1995                    1994
                                                   ------------------       -----------             -----------
<S>                                                <C>                      <C>                       <C>  
REVENUE:
     Interest income                                $    92,753             $      --                $     --
     Geo contract                                        90,000                    --                      --
     Equipment rental income                             13,500                    --                      --
     Miscellaneous income                                14,014                    --                     2,883
                                                    -----------             -----------             -----------
        TOTAL REVENUES                                  210,267                    --                     2,883

EXPENSES:
     Exploration costs                                  867,048                    --                      --
     General & administrative                         1,208,890                   5,415                  28,072
     Interest expense                                   425,767                   1,100                  14,680
     Depreciation expense                               790,967                    --                      --
     Abandonment of claims and leases                   626,637                    --                      --
     Loss - sale of mining equipment                    287,173                    --                      --
     Loss - sale of Polaris Coal Co.                    228,000                    --                      --
     Write down of mining equipment                     127,664                    --                      --
     Bad debts                                          196,985                    --                      --
     Services contributed by officers                    78,200                  18,200                  10,000
                                                    -----------             -----------             -----------

        TOTAL COSTS & EXPENSES                        4,837,331                  24,715                  52,752
                                                    -----------             -----------             -----------

        NET INCOME (LOSS) BEFORE
               EXTRAORDINARY ITEMS                   (4,627,064)                (24,715)                (49,869)

EXTRAORDINARY ITEM,
     Reduction of payables ( Note 2)                    496,283                  38,626                    --
                                                    -----------             -----------             -----------

        NET INCOME (LOSS)                           $(4,130,781)            $    13,911             $   (49,869)
                                                    ===========             ===========             ===========

NET INCOME (LOSS) PER SHARE:
     Income (loss) before
          extraordinary item                        $      (.81)            $      --               $      (.02)
     Extraordinary item                                    0.09                    --                      --
                                                    -----------             -----------             -----------

        NET INCOME (LOSS)                           $      (.72)            $      --               %      (.02)
                                                    ===========             ===========             ===========

WEIGHTED AVERAGE NUMBER
      OF SHARES OUTSTANDING                           5,683,297              49,983,166               2,606,454
                                                    ===========             ===========             ===========
         

See notes to financial statements                                                                        Page 3
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                                     LEESBURG LAND AND MINING CO., INC
                                       (A Development Stage Company)
                                STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
                                                 (See Note 4)

                                                                                       (Deficit)
                                                                                      Accumulated
                                                         Common Stock                 During the
                                                ------------------------------        Development
                                                   Shares             Amount              Stage             Total
                                                -------------     ------------        ------------       ------------

<S>                                             <C>             <C>                 <C>                  <C>        
Balances, December 31, 1993                       2,476,317       $ 3,820,378         $ (4,094,823)        $ (274,445)
     Management  services
       contributed by officers/shareholders
                                                         -            10,000                     -             10,000

     Involuntary conversion of
        shareholders' debt
                                                         -           142,012                     -            142,012

     Debt forgiven by shareholders
                                                         -           106,901                     -            106,901

     Stock issued shareholders
       in exchange for debt at
       $ .00003 per share                        47,500,000            1,250                     -              1,250

     Net (Loss)
                                                          -                -               (49,869)           (49,869)
                                                -----------       ----------           -----------          ---------
Balances, December 31, 1994                      49,976,317        4,080,541            (4,144,692)           (64,151)

     Management services
       contributed by officers/shareholders
                                                          -           18,200                     -             18,200

     Operating expenses paid
       by officer/shareholder
                                                          -            5,764                     -              5,764

     Stock issued to shareholder in
       exchange for services at
       $ .00004 per share
                                                  2,500,000              100                     -               100

     Net Income
                                                          -                -                13,911            13,911
                                                -----------       ----------            ----------        ----------
Balances, December 31, 1995                      52,476,317      $ 4,104,605          $ (4,130,781)       $  (26,176)
                                               ============      ===========          ============        ==========
                                                                                                           
See notes to financial statements                                                                             Page 4
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                              LEESBURG LAND AND MINING CO., INC.
                                                (A Development Stage Company)
                                                  STATEMENTS OF CASH FLOWS
                                       FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
                         AND FROM JUNE 21, 1983 (INCEPTION) TO DECEMBER 31, 1995 (Unaudited)

                                                                    Cumulative
                                                                      Since
                                                                    Inception
                                                                   (Unaudited)         1995            1994
                                                                  ------------      ----------      ----------
<S>                                                                <C>                 <C>             <C>   
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                                             $(4,130,781)        13,911        (49,869)
     Items not requiring cash:
        Depreciation                                                   790,967           --             --
        Contributed services                                            78,200         18,200         10,000
        (Gain) loss on disposal of mining claims
           and equipment                                             1,040,147           --           (2,883)
        Other                                                           (5,443)         5,864           --
        Contingency  recorded as note payable                           62,386           --             --
        Loss on investment in Polaris Coal Company                     228,000           --             --
        Additional payables transfered to equity                       187,777           --          187,777
        (Increase) decrease in accounts receivable                        --             --           17,300
        Increase  (decrease) in accounts payable                        26,176        (37,975)      (167,367)
                                                                   -----------    -----------    -----------
           Cash (used) by operating activities                      (1,722,571)          --           (5,042)
                                                                   -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of mining claims                                         (72,301)          --             --
     Purchase of vehicles                                             (103,614)          --             --
     Purchase of mining equipment                                   (1,319,676)          --             --
     Purchase of other equipment                                        (9,996)          --             --
     Purchase of Polaris Coal Company                                   (6,500)          --             --
     Proceeds - sale of mining equipment                               247,910           --            2,883
                                                                   -----------    -----------    -----------
           Cash provided (used) by investing activities             (1,264,177)          --            2,883
                                                                   -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Note payable payments                                            (110,130)          --             --
     Proceeds from  sale of common stock and
       warrants, net of registration costs                           3,111,194           --             --
     Purchase of treasury stock                                        (14,316)          --             --
                                                                   -----------    -----------    -----------
           Cash provided by financing activities                     2,986,748           --             --
                                                                   -----------    -----------    -----------

Increase (decrease) in cash & cash equivalents                            --             --           (2,159)

Cash & cash equivalents - beginning of year                               --             --            2,159
                                                                   -----------    -----------    -----------

Cash & cash equivalents - end of year                              $      --      $      --      $      --
                                                                   ===========    ===========    ===========

See notes to financial statements                                                                     Page 5


</TABLE>

<PAGE>
 
                       LEESBURG LAND AND MINING CO., INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
                                   (Continued)


Non-Cash Activities
-------------------

Capital transactions
--------------------

During 1995, the Company issued of 2,500,000  shares of common stock for payment
of services of $100 to a shareholder (see Note 4).

During 1994, officers  contributed $108,151 to the Company, for amounts due them
for past services, $1,250 of which was exchanged for 47,500,000 shares of common
stock.  Also during 1994,  the Company  unilaterally  eliminated  principal  and
interest payable of $142,012 and transferred the amount to equity (see Note 4).

Mining claims
-------------

In 1983, the Company  acquired  claims valued at  approximately  $2,000,000 from
certain  stockholders in exchange for debt and common stock. In 1984, the claims
were returned and the debt  terminated.  The common stock  (525,000  shares) was
retained by the stockholders.

Polaris Resources, Inc.
-----------------------

In 1985,  the Company  acquired all of the  outstanding  common stock of Polaris
Coal  Company  ("Polaris")  in exchange  for 750,000  shares of its common stock
(valued at  $293,500),  assumption  of  $1,200,000 of Polaris debt and $6,500 in
cash. Later in 1985, the Company sold the stock of Polaris back to the seller in
exchange for  cancellation  of the $1,200,000 debt and forgiveness of $53,000 in
interest. The Company's common stock was retained by the original seller and the
Company realized a loss of $228,000 on the sale.



See Notes to financial statements                                         Page 6

<PAGE>

                       LEESBURG LAND AND MINING CO., INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1995 AND 1994
                                   (CONTINUED)

Note 1  -  Operations and Summary of Significant Accounting Principles

             Leesburg Land & Mining,  Inc.  (the  "Company" or  "Leesburg")  was
             incorporated  on June 21, 1983.  From June 21, 1983  (Inception) to
             December 31, 1984, the Company was engaged in the  development of a
             gold placer claim  located near Salmon,  Idaho.  As of December 31,
             1984, the Company's only mining claim was abandoned.  Pursuant to a
             change  in  control  of the  Company  in April  1985,  the  Company
             purchased  an interest  in a coal  company.  The  Company  sold its
             interest in the coal company in November  1985.  In December  1985,
             the  Company   entered  into  a  contract  with  a   non-affiliated
             partnership to complete a geothermal well,  construct a power plant
             and assist in obtaining  needed  financing on a fixed-price  basis.
             The  geothermal  well was  plugged and  abandoned  in 1986 when the
             underground resource was deemed inadequate.  The Partnership failed
             to make payments to the Company under the contract. The Company has
             never  derived  significant  revenues  from  any of  its  attempted
             operations.

             In 1987,  the  Company  filed  for a  Chapter  11  bankruptcy,  but
             voluntarily  withdrew the filing in 1988.  Since 1988,  the Company
             has been selling its claims,  property and equipment.  In addition,
             the  Company  has been  eliminating  its  debt  (Notes 2 and 3) and
             seeking a private  company with which to merge. No such company has
             been identified or found.

             The accompanying  financial  statements have been prepared assuming
             that the Company will  continue as a going  concern.  However,  the
             Company has  incurred  cumulative  net losses of  $4,130,781  since
             inception.  At December 31, 1995,  liabilities  exceeded  assets by
             $26,176.  In addition,  the Company has recently eliminated amounts
             due  to   creditors   based  on  the  tolling  of  the  statute  of
             limitations.  As  described  in  Notes  2  and  3,  the  statue  of
             limitations  does  not  preclude   creditors  from  threatening  or
             bringing  litigation,  which  would be costly  for the  Company  to
             defend.  In view of these  matters,  the  future of the  Company is
             dependent upon management's ability to find a company with which to
             merge and a favorable  final outcome  regarding the  elimination of
             debts.

             Property and equipment
             ----------------------

             Property  and  equipment  are stated at cost and  depreciated  on a
             straight  line basis over the  estimated  useful lives of the asset
             (10 years for mining  equipment,  4-7 years for  vehicles  and 5-10
             years for  furniture  and  fixtures).  Maintenance  and repairs are
             expensed as incurred. When assets are sold or retired, the cost and
             related  accumulated  depreciation is removed from the accounts and
             the  resulting  gain or loss is included as income.  As of December
             31,  1993 all of the mining  equipment  had been sold and the costs
             and accumulated depreciation had been written off against the sales
             price.  The  remaining  asset on the balance  sheet at December 31,
             1995 and 1994 has been fully depreciated.

                                                                          Page 7
<PAGE>


                       LEESBURG LAND AND MINING CO., INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1995 AND 1994
                                   (CONTINUED)

Note 1  -  Operations and Summary of Significant Accounting Principles
           (Continued)

             Statement of cash flows
             -----------------------

             For  statement  of  cash  flows  purposes,  the  Company  considers
             short-term  investments with original maturities of three months or
             less to be cash equivalents.

             Earnings per common share
             -------------------------

             Net  income or (loss)  per  common  share is based on the  weighted
             average  number of shares of common  stock  outstanding  during the
             periods presented. The cumulative weighted average number of shares
             outstanding do not include  shares issued to a Belgian  company and
             then later rescinded and canceled by the Company (Note 4).

             Use of estimates
             ----------------

             The   preparation  of  financial   statements  in  conformity  with
             generally accepted  accounting  principles  requires  management to
             make estimates and assumptions that affect certain reported amounts
             and  disclosures.  Accordingly,  actual  results  could differ from
             those estimates.  Significant estimates have been made with regards
             to estimates of contributed services.

Note 2 -     Accounts Payable

             In 1985,  the Company  contracted  to drill a  geothermal  well and
             construct a power plant in central  Nevada.  In 1986, the Company's
             consulting  engineer determined that the well was unsuccessful and,
             as a result of the  Partnership's  failure to pay the Company,  the
             Company  did not have cash to pay its own  creditors,  most of whom
             had supplied  services and supplies  connected  with the well.  The
             payables amounted to approximately  $277,000.  In 1987, the Company
             filed  to  reorganize  under  Chapter  11 of the  Bankruptcy  Code,
             listing  approximately  $330,000 as payable to creditors.  In 1988,
             the Company  voluntarily  withdrew the bankruptcy  filing,  without
             having yet repaid the  creditors.  The only  creditor to reduce its
             receivable to a note and judgment was  Halliburton  Energy Services
             ("Halliburton").  The Company made  several  payments on this debt,
             but  interest  continued  to accrue  through  1993  after  which an
             agreement on settlement was reached.

             At December 31, 1993, on the advice of legal  counsel,  the Company
             eliminated a  substantial  amount of accounts  payable and reported
             $457,657 as an extraordinary gain. The Company, based on the advice
             of its legal counsel, determined that the claims of these creditors
             were outside the time  limitations of the statutes of the States of
             Colorado  and Nevada for causes of action most likely to be pled by
             such  creditors.  The statute  expired for these claims in December
             1993.  As a result,  management  and its attorney  believe that the
             Company  would most likely have a defense that would be  reasonably
             based upon fact and law and that the probability of these creditors
             successfully  overcoming such a defense is substantially remote. It
             is not impossible  that a creditor could seek a jurisdiction  other
             that  Colorado  or Nevada in which to commence  collection  and the
             Company would then be forced to defend or compromise  such claim at
             some expense.

                                                                          Page 8
<PAGE>

                       LEESBURG LAND AND MINING CO., INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1995 AND 1994
                                   (CONTINUED)

Note 2 -     Accounts Payable(continued)

             Legal  counsel to the  Company  has opined  that the chance of such
             successful  litigation  by  a  creditor  is  substantially  remote,
             although  such an  outcome  cannot be  absolutely  determined  with
             certainty at this time.

             In late 1994, the Company reopened negotiations with Halliburton, a
             creditor.  The Company and  Halliburton  agreed to a settlement  of
             approximately  $14,000 in early  1995.  Since that  settlement  was
             substantially less than the amount plus interest then recorded as a
             liability,  the Company  ceased to accrue  interest.  In 1995,  the
             Company  recognized  $38,626,  the  amount  of  debt  forgiven,  as
             extraordinary income. In January 1996, the Company settled its debt
             to Halliburton by paying $14,000.

Note 3  -    Notes Payable

             In 1986, the Company sold 128,000 shares of its common stock to Rio
             Delta Land Company ("Rio Delta").  The Company planned to work in a
             venture with Rio Delta to develop a mining  property.  However,  in
             1987,  after expending  approximately  $70,000 on the project,  the
             Company terminated the venture with Rio Delta and agreed to pay Rio
             Delta approximately $60,000 plus interest in exchange for return of
             the common stock issued to Rio Delta.  The Company  never  received
             its stock from Rio Delta but nonetheless maintained the debt on its
             books  despite  the fact that  legally  there may be no valid claim
             against  the  Company.  The  Company  has  unsuccessfully  tried to
             contact Rio Delta and its  controlling  shareholder  to resolve the
             matter.  Interest  was  accrued at 12% per annum from 1987  through
             December  31,  1994 and  amounted  to  approximately  approximately
             $80,000.

             As of December  31, 1994,  the Company,  based on the advice of its
             legal counsel,  determined  that any claim by Rio Delta,  if valid,
             lies outside the time limitations of the statutes of the limitation
             of Colorado  and Nevada.  The Company  believes  that it would most
             likely have a defense that would be reasonably  based upon fact and
             law  and  that  the  probability  of  this  creditor   successfully
             overcoming such a defense is substantially  remote.  The statute of
             limitations  is six  years on the debt due to Rio  Delta,  and that
             limitation  expired  in  December,  1994.  As a result of the above
             determination,  on December  31,  1994,  the Company  wrote off the
             principal,  plus accrued  interest and  estimated  legal  expenses,
             totaling  $142,012,  to  additional  paid-in  capital.  The 128,000
             shares of common stock sold to Rio Delta  currently  remain  issued
             and outstanding.

             It is not  impossible  that this creditor could seek a jurisdiction
             other than Colorado or Nevada in which to commence  collection  and
             the Company would then be forced to defend or compromise such claim
             at some  expense.  Legal  Counsel to the  Company  has opined  that
             chance  of  such   successful   litigation   by  this  creditor  is
             substantially remote, although such an outcome cannot be absolutely
             determined with certainty at this time.

                                                                          Page 9

<PAGE>

                       LEESBURG LAND AND MINING CO., INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1995 AND 1994
                                   (CONTINUED)

Note 4 -   Stockholders' Equity

             The Company amended its Articles of  Incorporation to authorize the
             issuance of 1,000,000  shares of preferred stock with no par value.
             The  preferred  stock  may be  issued  from  time to time with such
             designation,  rights,  preferences  and limitations as the Board of
             Directors may determine by resolution.  As of December 31, 1995, no
             shares of preferred stock have been issued.

             The Company has been in the  development  stage since its inception
             in 1983 and the  stockholders'  equity  transactions from inception
             through December 31, 1993 are summarized in the schedule below. The
             transactions  from  inception  through  December 31, 1995 have been
             audited by other auditors. The transactions from January 1, 1986 to
             December 31, 1992 have not been audited.

             [GRAPHIC OMITTED]

                                                                         Page 10

<PAGE>

                       LEESBURG LAND AND MINING CO., INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1995 AND 1994
                                   (CONTINUED)

Note 4 -   Stockholders' Equity (continued)

             In 1989, the Company sold 2,500,000  shares of the Company's common
             stock to a Belgian company, N.V.  Handels-Kreditkantoor/Comtoir  de
             Credit s.a.  ("HKCC") in exchange for 7,500,000 fine art prints. In
             addition,  the Company issued  650,000 shares to Asher  Investments
             Limited  ("Asher")  as  a  finder's  fee.  As  part  of  the  sales
             agreement,  HKCC agreed to loan the Company  $300,000.  The Company
             valued the combined transaction at $2,520,000.  However, HKCC never
             delivered  the prints or made the loan. As a result,  in 1990,  the
             Company  negotiated the recission of the stock issuance.  Since the
             transaction was never fully  executed,  it has not been included in
             the schedule  above or in  calculation  of weighted  average shares
             outstanding  for determining  earnings (loss) per share.  The stock
             transfer agent canceled the outstanding shares in 1994.

             The Company's officers  contributed  management  services valued at
             $18,200 and  $10,000  during  1995 and 1994,  respectively.  During
             1995, the Board of Directors  approved issuing  2,500,000 shares of
             common  for $100 of  services  to One  Capital.  During  1994,  The
             President waived $62,618 owed to him for past services  rendered in
             exchange for  28,500,000  shares of common stock for which $750 was
             deemed  consideration.  During  1994,  the  Vice  President  waived
             $45,532  owed to him for past  services  rendered in  exchange  for
             19,000,000  shares  of  common  stock  for  which  $500 was  deemed
             consideration.  These  transactions were authorized by the Board of
             Directors and the amounts were credited to stockholders' equity.

             Also during 1994, the Company unilaterally transferred the debt and
             accrued interest owed to Rio Delta, a major shareholder,  to equity
             (see Note 3). The principal and interest  totaled  $142,012 and was
             transferred  after the time period for the  statute of  limitations
             expired.

             During 1995, the Company's President and Shareholder paid operating
             expenses and creditors $5,764 and contributed  those amounts to the
             Company.  During 1996,  the  President  has also paid  expenses and
             creditors of the Company.

Note 5  -    Income Taxes

             At December 31, 1995,  the Company has a net  operating  loss (NOL)
             carry-forward   for  tax  purposes  of   approximately   $3,620,000
             (expiring in the years 1998 to 2010). In addition,  the Company has
             a tax credit  carry-forward of approximately  $20,000  (expiring in
             the years 1999 to 2000).


                                                                         Page 11

<PAGE>

                       LEESBURG LAND AND MINING CO., INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 1995 AND 1994
                                   (CONTINUED)


Note 5  -    Income Taxes (continued)

             Deferred tax assets (liabilities) at December 31, 1995 and 1994 are
             as follows:

                                                          1995          1994
             Deferred tax assets due to:
                Payables                               $   10,182    $    9,922
                Receivables                                     -             -
                Net operating loss carry-forward        1,407,844     1,405,925
                                                       ----------    ----------
                                                        1,418,026     1,415,847
             Valuation allowance for deferred
                tax assets                             (1,418,026)   (1,415,847)
                                                       ----------    ----------

                   Net deferred tax asset              $        -    $        -
                                                       =========     =========

             Deferred income taxes are recorded to reflect the tax  consequences
             on future years of differences  between the tax basis of assets and
             liabilities and their financial reporting amounts at each year end.
             Deferred  income  tax  assets  are  recorded  to  reflect  the  tax
             consequences on future years of income tax carry-forward  benefits,
             reduced by benefit  amounts  not  expected  to be  realized  by the
             Company.

             There were no income tax  expenses or benefits  for the years ended
             December 31, 1995 and 1994.

Note 6 -     Related Party Transactions

             The Company  utilizes  office space  provided free by the President
             and  shareholder.  The  Company  provides  an  automobile  for  the
             President's use. In prior years, the Company paid for the vehicle's
             maintenance and operating costs.  The President  currently pays for
             all of the vehicle's  maintenance and operating costs. In addition,
             the officers have  contributed  management  services to the Company
             without  compensation  (Note 4). In 1994,  the  Company's  officers
             contributed past amounts owed to them in exchange for a substantial
             number of shares of the Company's common stock (Note 4).



                                                                         Page 12