<PAGE>


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10 - KSB

[ X ]    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934
         For the fiscal year ended December 31, 1998

[   ]    TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

         Commission file number:   33-38214-D


                             RELIANCE RESOURCES INC.
             (Exact name of registrant as specified in its charter)

          COLORADO                                                95-4734398
(State or Other Jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

                 1621 ALTIVO WAY, LOS ANGELES, CALIFORNIA 90026
                    (Address of principal executive offices)

                                 (818) 980-0929
                (Issuer's telephone number, including area code)

          Securities registered under Section 12(g) of the Exchange Act
                                      None
          -------------------------------------------------------------
                               Title of each 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 twelve 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 ___

Transitional Small Business Disclosure Format (Check one):  Yes ____  No  X

Check if disclosure of delinquent filers in response 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 or any amendment to
this Form 10-KSB. _____

        State the issuers revenues for its most recent fiscal year. None
                                                                    ----

   State the aggregate market value of the voting stock held by nonaffiliates
                               of the registrant.

              There is no market for the registrant's voting stock

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

Date: December 31, 1998       Common Stock, par value $0.001 per share.  
                              Shares outstanding 2,000,000



<PAGE>


                             RELIANCE RESOURCES INC.

                                  FORM 10--KSB

                                DECEMBER 31, 1997


                                      INDEX

                                                                            PAGE
PART 1

   Item 1   Description of Business                                          3
   Item 2   Description of Property                                          8
   Item 3   Legal Proceedings                                                8
   Item 4   Submission of Matters to a Vote of Security Holders              8

PART II

   Item 5   Market for Common Equity and Related Stockholder Matters         9
   Item 6   Plan of Operation                                                9
   Item 7   Financial Statements                                             9
   Item 8   Changes in and Disagreements with Accountants on Accounting      9
              and Financial Disclosures

PART III

   Item 9   Directors, Executive Officers, Promoters and Control Persons,
              Compliance with Section 16(a) of the Exchange Act              9
   Item 10  Executive Compensation                                           10
   Item 11  Security Ownership of Certain Beneficial Owners
              and Management                                                 10
   Item 12  Certain Relationships and Related Transactions.                  10

PART IV

   Item 13  Exhibits and Reports on Form 8-K                                 11


                                       2

<PAGE>


                                     PART I


ITEM 1:  DESCRIPTION OF BUSINESS

(a) and (b) Business Development and Business of Issuer


GENERAL

         Reliance Resources Inc., formerly known as Pursuit Venture Corporation
(the "Company") is a Colorado corporation organized on March 20, 1997. The
Company is the successor corporation to Pursuit Venture Corporation, a Delaware
corporation, by virtue of a Plan of Merger entered into on August 21, 1998.

         Like its predecessor, the Company's business purpose is to acquire a
business opportunity which Management believes offers potential long-term
growth. The Company will seek to acquire majority interests in an existing
business or purchase assets which it will use to establish a business.

         The Company does not intend to become involved in any business which
would require it to register as a securities broker-dealer under the Securities
Exchange Act of 1934, as an investment advisor under the Investment Advisor's
Act of 1940; or as an investment company under the Investment Company Act of
1940. Except as set forth herein under BUSINESS - Forms of Combination,
Management's discretion is otherwise unrestricted and it may participate in any
business which may, in the opinion of Management, meet the business objectives
discussed herein.

         Management believes that business opportunities will become available
to the Company due primarily to its status as a publicly-held company, and its
flexibility in structuring and participating in business opportunities. The
Company has no agreement or understanding to acquire or participate in any
business opportunity, nor does it currently have any opportunity under
investigation. Decisions as to which business opportunity to pursue will be made
by Management of the Company, which will in all probability act without the
consent, vote, or approval of the Company's stockholders.

         The Company's offices are located at 1621 Altivo Way, Los Angeles,
California 90026. Its telephone number is (818) 980-0929 and telecopier number
is (818) 980-8746.


BUSINESS PLAN

         The Company is a "shell" corporation which proposes to engage in the
active search for a business combination or merger opportunity which, in the
opinion of Management, will enhance stockholder value.

         Management believes that business opportunities will become available
to the Company due primarily to its status as a publicly-held company, and its
flexibility in structuring and participating in business opportunities. The
proposed corporate structure of the Company has not been the subject of a
feasibility study or market research nor is Management aware of statistical data
which would support the perceived benefits of a merger or acquisition
transaction for target company stockholders. Therefore, there can be no
assurance that a market exists for such a corporate vehicle. At present, there
are no plans, agreements, understandings, or commitments to acquire or
participate in any business opportunity nor has the Company solicited, received
or considered any proposals regarding a possible combination or merger. Further,
there can be no assurance that the Company will be successful in locating a
suitable entity for a merger or that the Company will be able to consummate a
combination. 

                                       3

<PAGE>

FORMS OF COMBINATION

         The manner in which the Company participates in a business opportunity
is predicated on the nature of the opportunity, the respective needs and desires
of the Company and the promoters of the combination, and the relative
negotiating strength of the Company and such promoters. It is likely that a
combination will take the form of a merger, consolidation, asset acquisition or
some other form of combination. The "target" entities may include private
companies, partnerships, or sole proprietorships.

         In transacting a combination, a significant amount of additional shares
of the Company's Common Stock may be issued. The Company is authorized to issue
50,000,000 shares of Common Stock of which 2,000,000 shares are issued and
outstanding. In the event that a substantial number of shares are issued
pursuant to a transaction, present Management and current stockholders may not
have control of a majority of the voting shares of the Company. Further, as part
of such a transaction, all or a majority of the Company's Management may be
requested to relinquish their positions and new directors and officers may be
appointed without a vote by stockholders. Moreover, no assurance can be given as
to the experience or qualifications of such persons either in the operation of
the activities of the Company or in the operation of the business, asset or
property being combined.

         The Company does not propose to restrict its search for combination
opportunities to any particular industry, and may, therefore, engage in
essentially any business. Management contemplates that the Company will seek to
merge with or acquire a target company with either assets or earnings, or both.
The Company has not established a specific level of earnings or assets below
which it would not consider a merger or acquisition with a target company.

         The Company intends to obtain, if possible, audited financial
statements for the entity which it acquires. It is expected that audited
financials will help Management to understand the financial position of the
company it acquires and will also help the Company in complying with the
financial reporting requirements of the Securities Exchange Act of 1934, if the
acquisition would fall within the ambit of such law.

         It is anticipated that business opportunities will become available to
the Company from various sources, including its Officers and Directors,
professional advisors such as attorneys and accountants, securities
broker-dealers, venture capitalists, members of the financial community, and
others who may present unsolicited proposals. The Company has no plans,
understandings, agreements, or commitments with any individuals other than its
Officers and Directors to act as finders of opportunities for the Company.


PLAN OF ACQUISITION

         The Officers and Directors of the Company will undertake the analysis
of business opportunities. Management will have unrestricted flexibility in
seeking, analyzing and participating in business opportunities. In its efforts,
Management intends to follow a systematic approach to identify its most suitable
acquisition candidates.

         Management intends to concentrate on identifying any number of
preliminary prospects which may be brought to its attention through present
associations or unsolicited. Management will then apply certain broad criteria
to the preliminary prospects. Essentially, this will entail a determination by
Management whether or not the prospects are in an industry which appears
promising and whether or not the prospects themselves have potential within
their own industries.

                                       4

<PAGE>

         During this initial screening process, Management will ask and receive
answers to questions framed to provide appropriate threshold information,
depending upon the nature of the prospect's business. Such evaluation is not
expected to be an in-depth analysis of the target company's operations, although
it will encompass a look at most, if not all, of the same areas to be examined
once if and when a target company is selected for an in-depth review. For
example, at this stage, Management may look at a prospect's unaudited balance
sheet. However, when a prospect is selected for an in-depth review, Management
will review the prospect's audited financial statements. Nevertheless,
Management anticipates this evaluation will entail a broad overview of the
business of the target company and should allow a significant percentage of
preliminary prospects to be eliminated from further consideration.

         Management will conduct an in depth analysis of five major areas of
concern with respect to the target company as follows:

         1. MANAGERIAL AND FINANCIAL STABILITY. Management will review audited
financial statements of the target company and will also research the background
of each director and member of management of the target company in order to
discern whether the stability of the target company is such that further
negotiations are warranted.

         2. INDUSTRY STATUS. Management will research the potential of the
target company's industry. The concern here is whether the industry is in a
growth, stagnant or declining stage.

         3. PRODUCTION OF PRODUCT. If the target company is a manufacturer,
Management will review whether it has the necessary resources or access to the
necessary resources and supplies to produce a quality product in a timely
manner.

         4. ACCEPTANCE AND POTENTIAL OF PRODUCT. Management will review the
acceptance of the target company's product in the market place. Management will
also determine whether or not there is potential for the product to be workable
and to fulfill its intended purpose.

         5. DEVELOPMENT OF TARGET COMPANY. Management will review the target
company's state of development (examples: start-up stage, established company,
etc.).

         The foregoing is an outline of the areas of concern which most often
arise and merit careful scrutiny by Management. Because of the possible
varieties of target companies which may come to the attention of Management,
additional factors will most likely be considered in any given analysis. Also,
the procedures used in such a review are expected to vary depending upon the
target company being analyzed. Management may select a target company for
further negotiations even though the target may not receive a favorable
evaluation in one or more of the five primary areas of concern.

         Management expects to enter into further negotiations with various
target company managements following successful conclusion of the initial
financial and evaluation studies. Negotiations with target company management
will be expected to focus on the percentage of the Company which target company
stockholders would acquire in exchange for their shareholdings in the target
company. Depending upon, among other things, the target company's assets and
liabilities.

         The Company's stockholders will, in all likelihood, hold a lesser
percentage ownership interest in the Company following any merger or
acquisition. The percentage ownership may be subject to significant reduction in
the event the Company acquires a target company with substantial assets. Any
merger or acquisition effected by the Company can be expected to have a
significant dilutive effect on the percentage of shares held by the Company's
stockholders.

                                       5

<PAGE>

         Management does not intend to force an active participation in the
affairs of the acquired company. However, Management will evaluate any
opportunity offered for such participation if such participation was a necessary
ingredient of a merger. It is not the intention of Management to seek such
participation. Management will in all likelihood be requested to relinquish any
voting control it may exercise prior to a merger to the present management of
the business which is acquired.

         Current Management would clearly not control the surviving company
following such a dilution and will not be in a position to demand an active
participation and therefore would not participate unless invited to do so.

         The final stage of any merger or acquisition to be effected by the
Company will require the Company to retain the services of counsel and a
qualified accounting firm in order to properly effect the merger or acquisition.
The Company may be expected to incur significant legal fees and accounting costs
during the final stages of a merger or acquisition. Management intends to retain
legal and accounting services only on an as-needed basis in the latter stages of
a proposed merger or acquisition.

         The interests of Management is to increase stockholder value. If
successful all the stockholders, including Management, will benefit.
Management's objective is to issue restricted shares of the Company to acquire a
private company which is a going concern. If Management is requested to sell a
portion of its shares, give away a portion of its shares or cancel a portion of
its shares to obtain such a merger, then Management will face a conflict of
interest. Presently, Management has no plan on how to deal with this conflict
and believes no general plan can be formulated at this time; this may adversely
affect the Company's ability to successfully conclude a subsequent merger or
acquisition. Conflict resolutions will otherwise be handled on a case-by-case
basis. If the conflict cannot be resolved, litigation could therefore occur,
which would likely damage the Company's prospects.

         There are no corporate policies, board resolutions or bylaws which deal
with conflicts of interest with respect to the sale of shares of the company's
shares by Management and none are anticipated to be placed into effect.

         Management cannot commit at this time as to whether a stockholder will
have the right to vote to complete a merger/acquisition as the nature of the
transaction, and the needs of the candidate will dictate the legal requirements
of the transaction.

         In connection with the acquisition of a private business, the Company
may not obtain an independent appraisal of the value of the acquired business.
Such omission by the Company could result in overvaluation or other related
errors which then could adversely effect the price paid by the Company for the
private business. It is probable that an existing stockholder's future share
values would be adversely effected by factors including but not limited to
excess dilution, reduced dividends, if any, and a lack of market for shares.

         Should a stockholder wish to challenge the Company in Court to reverse
a merger or otherwise assert damages against the Company's Management for
neglect of fiduciary duties in the construction of a merger or acquisition, the
legal remedy available to that stockholder under state corporate law will most
likely be prohibitively expensive and time consuming.

         The Company has in effect no bylaws understandings, agreements or
resolutions which prevent related party transactions. Such bylaws or resolutions
could be changed by Management initiative. No such changes are presently being
considered.

                                       6

<PAGE>

         There are no present plans, proposals, or arrangements to sell or issue
additional shares of the Company prior to an acquisition or a merger.

Competition
-----------

         The Company will remain an insignificant participant among the firms
which engage in mergers with and acquisitions of privately-held entities. There
are many established venture capital and financial concerns which have
significantly greater financial and personnel resources and technical expertise
than the Company. In view of the Company's lack of working capital resources and
limited management availability, the Company will continue to be at a
significant competitive disadvantage compared to its competitors.

Regulation and Taxation
-----------------------

         The Company could be subject to regulation under the Investment Company
Act of 1940 in the event the Company obtains and continues to hold a minority
interest in a number of entities. However, Management intends to seek at most
one or two mergers or acquisitions and Management's plan of operation is based
on the Company obtaining a controlling interest in any merger or acquisition
target company and, accordingly, the Company may be required to discontinue any
prospective merger or acquisition of any company in which a controlling interest
will not be obtained.

         The Company could also be required to register under the Investment
Company Act of 1940 in the event the Company comes within the definition of an
Investment Company contained in that Act due to its assets consisting
principally of shareholdings held in a number of subsidiaries. Management
intends to seek at most one or two mergers or acquisitions, which transactions
will result in the Company holding only majority interest in subsidiaries.

         Any securities which the Company acquires in exchange for its Common
Stock will be "restricted securities" within the meaning of the Securities Act
of 1933 (the "1933 Act"). If the Company elected to resell such securities, such
sale could not proceed unless a Registration Statement had been declared
effective by the Securities and Exchange Commission or an exemption from
registration was available. Section 4(2) of the 1933 Act, which exempts sales of
securities not involving a public offering, would in all likelihood be available
since it is likely that any such sale would be a block sale to a private
investor to raise additional capital. Although Management's plan of operation
does not contemplate resale of securities acquired, in the event such a sale
were necessary, the Company would be required to comply with the provisions of
the 1933 Act.

         As a condition to a merger or acquisition, it is possible that the
target company's management may request registration of the Company's Common
Stock to be received by target company stockholders. In such event, the Company
could incur significant registration costs. Management intends to require the
target company to bear most, if not all, of the cost of any such registration.
Alternatively, the Company may issue "restricted securities" to a prospective
target company, which securities may be subsequently registered for sale or sold
in accordance with Rule 144 of the Securities Act of 1933.

         The Company intends to structure a merger or acquisition in such a
manner as to minimize federal and state tax consequences to the Company and any
target company.

         In the course of a merger or acquisition the Company may undertake, a
substantial amount of attention will be focused upon federal and state tax
consequences to both the Company and the target company. Presently, under the
provisions of federal and various state tax laws, a qualified reorganization
between business entities will generally result in tax-free treatment to the
parties of the reorganization. This generally requires the company to acquire at
least 80% of the combined voting power of the acquired company plus at least 80%
of the total number of shares of all other classes of stock in exchange for the
voting stock of the acquiring company.

                                       7

<PAGE>

         While the Company expects to structure any merger or acquisition in a
manner which will minimize federal and state tax consequences to both the
Company and the target company, there is no assurance that such a business
combination will meet the statutory requirements of a re-organization or that
the parties will obtain the intended tax-free treatment upon a transfer of stock
or assets. A non-qualifying reorganization could result in the imposition of
both federal and state taxes which may have a substantial adverse effect on the
Company. Further, there is no assurance that federal and state tax laws may not
be amended in the foreseeable future to preclude the Company, as well as others,
from availing itself of the tax-free treatment presently afforded business
entities engaged in mergers and acquisitions.

         As of the date hereof no arrangements for merger or acquisition have
been made.


EMPLOYEES

         The Company is a development stage operation and currently has no
employees other than its sole director and officer. The need for employees and
their availability will be addressed as circumstances warrant.


PROPERTY

         The Company utilizes the offices of its sole Officer and Director, Mr.
Patrick C. Brooks, on a month-to-month basis. With effect from July 1, 1998, the
Company pays Mr. Brooks a fee of $500 per month for this usage which includes
the use of telephone, telecopier, computers, office fixtures and fittings, and
secretarial services. Management does not foresee the need for separate offices
until business circumstances dictate otherwise.


ITEM 2:  DESCRIPTION OF PROPERTY

None


ITEM 3:  LEGAL PROCEEDINGS

None


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

Report on Form 8K dated August 31, 1998 effectuating a change of corporate
domicile from Delaware to Colorado.

Report of From 8 K dated September 8, 1998 amending corporate name from Pursuit
Venyure Corporation to Reliance Resources Inc.

                                       8

<PAGE>


                                     PART II


ITEM 5:  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Not applicable - the Company's stock is not traded publicly and no dividends
have been paid.


ITEM 6:  PLAN OF OPERATION

         During 1998, the Company continued its efforts to identify business
opportunities consistent with its objectives. However, the Company's ability to
operate is significantly limited and adversely impacted by the absence of
operating funds. Against this background, the Company has been unsuccessful in
identifying established and profitable operating companies which desire a public
listing through a `reverse-merger".

         Additionally, within its sphere of operations, the Company competes
with a variety of sources such as investment bankers and venture capitalists
which are capitalized and possess significantly greater management resources.
Therefore the Company's ability to achieve its stated objectives at the current
time are, at best, tenuous. However, Management continues to use all available
resources in its endeavours to successfully complete a business combination.


ITEM 7:    FINANCIAL STATEMENTS

           See Audited Financial Statements as attached herewith.


ITEM 8:    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
           FINANCIAL DISCLOSURE

           None.


                                    PART III


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


                                   MANAGEMENT

         The following sets forth information concerning the Directors and
Officers of the Company:

          NAME                                       POSITIONS

    Patrick C. Brooks              Director, President, Chief Financial  Officer
                                                   and Secretary

         The following sets forth certain biographical information pertaining to
the Directors and Officers of the Company:

                                       9

<PAGE>

PATRICK C. BROOKS

         Mr. Brooks was appointed sole officer and director of the Company in
August 1997.

         Since August 1997, Mr. Brooks has served as a director and officer of
Fountain Colony Ventures, Inc. a publicly-held shell corporation. Since November
1997, Mr. Brooks has served as a director and officer of Laurel Dental Plan,
Inc., a privately held dental HMO licensed to conduct business in the State of
California. Additionally, he serves as an officer and director of several
privately-held businesses.

         Since 1988 Mr. Brooks has served as President of Home Indemnity
Incorporated, a company he founded. Formerly, he served as Chairman and
President of Bio-Dental Technologies Corporation, a publicly-held company traded
on the NASDAQ Stock Exchange. Additionally, he served as joint principal and
owner of Thunderbird Securities Corporation and Meridian Securities, Inc., both
companies being securities-broker dealers licensed by the Securities and
Exchange Commission and the N.A.S.D.

         From 1987 to 1990, Mr. Brooks was the promoter and sponsor of three
publicly-held Business Investment Companies. In the fifteen years prior to 1987
he served in the casualty insurance industry in successively advancing
underwriting positions with major European and American insurance companies.


ITEM 10:  EXECUTIVE COMPENSATION

         No compensation was paid to the Company's officer and director during
year 1998.


ITEM 11:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information regarding ownership of the
Company's Common Stock by each person known by the Company to be the beneficial
owner of more than 5% of the outstanding Common Stock, by each director and by
each executive officer of the Company. All shares are held beneficially and of
record, and each recorded stockholder has sole voting, investment and
dispositive power.
<TABLE>
<CAPTION>


                                                      SHARES
              NAME                                  BENEFICIALLY     PERCENTAGE OF
                                                       OWNED          SHARES OWNED
                                                       -----          ------------
<S>                                                   <C>                  <C> 
      Patrick C. Brooks (1)                           230,000              11.5

      Directors and Officers as a Group               230,000              11.5

      (1) Director and/or Officer of the Company
</TABLE>


ITEM 12:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         On June 18, 1998, the Company issued 1,500,000 shares of its Common
Stock, par value $.001, to its sole director and officer and director in
consideration for satisfying Company liabilities of $20,000 incurred with the
management of the Company since 1993. This transaction was not conducted in
arm's length transaction. Mr. Brooks has since disposed of these shares.

                                       10

<PAGE>

                                     PART IV


ITEM 13:  EXHIBITS AND REPORTS ON FORM 8-K

Reports on Form 8-K dated August 31, 1998 and September 8, 1998 incorporated
herein by reference.



                                       11

<PAGE>



                                   SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereto
duly authorized.


                                          RELIANCE RESOURCES INC.



                                          /s/ Patrick C. Brooks
                                          -------------------------------
                                          Patrick C. Brooks
                                          Director, President and Secretary


Date:    March 31, 1999



                                       12



<PAGE>

                            RELIANCE RESOURCES INC.

                     (formerly Pursuit Venture Corporation)
                         (A Development Stage Company)

                              FINANCIAL STATEMENTS


                           DECEMBER 31, 1998 AND 1997



<PAGE>


                             RELIANCE RESOURCES INC.
                     (formerly Pursuit Venture Corporation)
                          (A Development Stage Company)

                              FINANCIAL STATEMENTS

                           DECEMBER 31, 1998 AND 1997




Financial Statements
    Independent Auditor's Report............................................1

    Balance Sheets --
        Assets, Liabilities and Stockholders' Equity........................2

    Statements of Operations................................................3

    Statement of Stockholders' Equity.......................................4

    Statements of Cash Flows................................................6

Notes to Financial Statements...............................................7



<PAGE>


                             HENRY SCHIFFER, C.P.A.
                           A PROFESSIONAL CORPORATION
                         315 S. Beverly Drive, Suite 302
                         Beverly Hills, California 90212
                     Tel. (310) 286 6830 Fax. (310) 286 6840






                          INDEPENDENT AUDITOR'S REPORT

To The Board of Directors and Stockholders
Reliance Resources Inc.
1621 Altivo Way
Los Angeles, CA 90026

I have audited the accompanying balance sheets of Reliance Resources Inc.,
formerly Pursuit Venture Corporation, at December 31, 1998 and 1997 and the
related statements of income, stockholders' equity and cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.

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

In my opinion, the financial statements referred to above present fairly, in all
material aspects, the financial position of Reliance Resources Inc., at December
31, 1998 and 1997 and the results of its operations, stockholders' equity and
cash flows for the years then ended, in conformity with generally accepted
accounting principles.




Henry Schiffer
Certified Public Accountant
March 31, 1999

                                       1

<PAGE>


                             RELIANCE RESOURCES INC.

                     (formerly Pursuit Venture Corporation)
                          (A Development Stage Company)

                                 BALANCE SHEETS



                                     ASSETS

                                                   December 31,     December 31,
Current Assets:                                        1998             1997
---------------                                        ----             ----

Cash and equivalents                                        0                0
                                                    ----------       ----------

Total Assets                                                0                0
                                                    ==========       ==========


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current Liabilities:
--------------------

Accounts payable and accrued expenses                   4,500           20,000
                                                    ----------       ----------

Stockholders' Equity:
---------------------

Preferred stock -- 10,000,000 shares 
    authorized; issued and outstanding 
    none @ $0.01 par value 
Common stock -- 50,000,000 shares authorized;
     issued and outstanding 2,000,000 shares at
     December 31, 1998 and 500,000 shares at
     December 31, 1997 @ $.001 par value
     (Notes 1,2 and 3)                                  2,000              500
Paid in capital (Note 2)                               53,230           34,730
Deficit accumulated during the
    development stage                                 (59,730)         (55,230)
                                                    ----------       ----------

    Total Stockholders' (Deficit)                      (4,500)         (20,000)
                                                    ----------       ----------

     Total Liabilities and Stockholders' Equity             0                0
                                                    ==========       ==========

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                       2

<PAGE>

                             RELIANCE RESOURCES INC.
                     (formerly Pursuit Venture Corporation)
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                 Years Ended         
                                                 December 31,    (December 7, 1990
                                             -----------------           to
                                             1998         1997    December 31, 1998
                                             ----         ----    -----------------
<S>                                      <C>           <C>           <C>

Revenue:                                          0             0             0

Operating Expenses:

Expenses incurred in connection 
   with securities registration                   0             0        12,087
Officer and director fees                         0           230           230
Amortization of organization costs                0             0         5,000
Rent                                          3,000             0         3,000
Professional fees                                 0             0         5,028
Travel expenses                                   0             0         1,324
Transfer agent fees                               0             0         1,449
Accounting fees                               1,500         7,000        21,500
Other expenses                                    0             0        10,112
                                         -----------   -----------   -----------
  Total operating expenses                    4,500         7,230        59,730
                                         -----------   -----------   -----------
Net (loss)                                   (4,500)       (7,230)      (59,730)
                                         ===========   ===========   ===========
Weighted number of shares outstanding     2,000,000     2,000,000     2,000,000
                                         ===========   ===========   ===========

Net (loss) per share                        nil             nil           nil
                                            ===             ===           ===

</TABLE>






   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                       3

<PAGE>



                            RELIANCE RESOURCES INC.
                     (formerly Pursuit Venture Corporation)
                          (A Development Stage Company)
                  STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
     FOR THE PERIOD FROM INCEPTION (DECEMBER 7, 1990) TO DECEMBER 31, 1998

<TABLE>
<CAPTION>

                                  Common Shares                           Deficit            Total
                              -----------------------    Paid In    Accumulated During  Stockholders'
                              Shares           Amount    Capital     Development Stage     Equity
                              ------           ------    -------     -----------------     ------
<S>                           <C>           <C>         <C>              <C>              <C>
December 7, 1990 
  Issuance of 270,000 
  units (consisting of 
  one share of common 
  stock and one warrant)
  for $0.0185185 cash 
  per unit                      270,000          270        4,730                0            5,000

Net loss                              0            0            0          (12,368)         (12,368)
                              ----------   ----------   ----------       ----------       ----------
Balance, December 31, 
  1990                          270,000          270        4,730          (12,368)          (7,368)

Net loss, year ended 
  December 31, 1991                   0            0            0           (5,877)          (5,877)
                              ----------   ----------   ----------       ----------       ----------
Balance, December 31, 
  1991                          270,000          270        4,730          (18,245)         (13,245)

Net loss, year ended 
  December 31, 1992                   0            0            0           (9,391)          (9,391)
                              ----------   ----------   ----------       ----------       ----------
Balance, December 31,
  1992                          270,000          270        4,730          (27,636)         (22,636)

Paid in Capital (note 2)              0            0       30,000                0           30,000

Net loss, year ended 
  December 31, 1993                   0            0            0           (5,846)          (5,846)
                              ----------   ----------   ----------       ----------       ----------
Balance, December 31, 
  1993                          270,000          270       34,730          (33,482)           1,518

Net loss, year ended 
  December 31, 1994                   0            0            0           (6,600)          (6,600)
                              ----------   ----------   ----------       ----------       ----------
Balance, December 31, 
  1994                          270,000          270       34,730          (40,082)          (5,082)
</TABLE>



   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                       4

<PAGE>
                             RELIANCE RESOURCES INC.
                     (formerly Pursuit Venture Corporation)
                          (A Development Stage Company)
             STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) (CONTINUED)
      FOR THE PERIOD FROM INCEPTION (DECEMBER 7,1990) TO DECEMBER 31, 1998

<TABLE>
<CAPTION>

                                  Common Shares                           Deficit            Total
                              -----------------------    Paid In    Accumulated During  Stockholders'
                              Shares           Amount    Capital     Development Stage     Equity
                              ------           ------    -------     -----------------     ------
<S>                           <C>           <C>         <C>              <C>              <C>
Balance, December 31, 
  1994                          270,000          270       34,730          (40,082)          (5,082)

Net loss, year ended 
  December 31, 1995                   0            0            0           (4,418)          (4,418)
                              ----------   ----------   ----------       ----------       ----------
Balance, December 31, 
  1995                          270,000          270       34,730          (44,500)          (9,500)

Net loss, year ended 
  December 31, 1996                   0            0            0           (3,500)          (3,500)
                              ----------   ----------   ----------       ----------       ----------
Balance, December 31,
  1996                          270,000          270       34,730          (48,000)         (13,000)

Stock issued for officer
   and director fees            230,000          230            0                0              230

Net loss, year ended 
  December 31, 1997                   0            0            0           (7,230)          (7,230)
                              ----------   ----------   ----------       ----------       ----------
Balance, December 31, 
  1997                          500,000          500       34,730          (55,230)         (20,000)

Shares issued to officer for
  cancellation of debt
  (Note 3)                    1,500,000        1,500       18,500                0           20,000

Net loss, year ended 
  December 31, 1998                   0            0            0           (4,500)          (4,500)
                              ----------   ----------   ----------       ----------       ----------
Balance, December 31, 
  1998                        2,000,000        2,000       53,230          (59,730)          (4,500)
                              ==========   ==========   ==========       ==========       ==========

</TABLE>

   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                       5

<PAGE>


                             RELIANCE RESOURCES INC.
                     (formerly Pursuit Venture Corporation)
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                         Years Ended            Period from Inception
                                                         December 31,           (December 7, 1990) to
                                                   1998               1997         December 31, 1998
                                                   ----               ----         -----------------
<S>                                                <C>           <C>                   <C>
CASH FLOWS FROM OPERATING
     ACTIVITIES

Net (loss)                                            (4,500)      (1,000)               (59,730)

Adjustments to reconcile net (loss) to net
  cash (used) by operating activities

  Amortization of organization expenses                    0             0                 5,000
  Increase (decrease) in accounts payable
     and accrued expenses                            (15,500)       1,000                  4,500
                                                   ----------   ----------             ----------

NET CASH (USED) BY
  OPERATING ACTIVITIES                               (20,000)           0                (50,230)
                                                   ----------   ----------             ----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Organization costs                                       0            0                 (5,000)
                                                   ----------   ----------             ----------

CASH PROVIDED FROM
  INVESTING ACTIVITIES                                     0            0                 (5,000)
                                                   ----------   ----------             ----------

CASH FLOWS FROM
  FINANCING ACTIVITIES
  Issuance of common stock                                 0            0                  5,000
  Common stock issued for services                         0            0                    230
  Common stock issued for cancellation
     of accrued expenses (Note 3)                     20,000            0                 20,000
  Paid in capital from shareholders (Note 2)               0            0                 30,000
  Borrowings of long-term debt,
     related party (Note 2)                                0            0                      0
                                                   ----------   ----------             ----------

NET CASH PROVIDED FROM
  FINANCING ACTIVITIES                                20,000            0                 55,230

NET INCREASE (DECREASE) IN CASH                            0            0                      0

CASH BALANCE, BEGINNING OF PERIOD                          0            0                      0
                                                   ----------   ----------             ----------
CASH BALANCE, END OF PERIOD                                0            0                      0
                                                   ==========   ==========             ==========


</TABLE>


   THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                       6

<PAGE>


                             RELIANCE RESOURCES INC.
                     (FORMERLY PURSUIT VENTURE CORPORATION)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS

Note 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ------------------------------------------

         This summary of significant accounting policies of Reliance Resources
         Inc., is presented to assist in understanding the Company's financial
         statements. The financial statements and notes are representations of
         the Company's management, which is responsible for their integrity and
         objectivity. These accounting policies conform to generally accepted
         accounting principles and have been consistently applied in the
         preparation of the financial statements.

         (a) Organization and Business Activities:

             The Company was incorporated on December 7, 1990 under the laws of
             the State of Delaware as Pursuit Ventures Corporation. Under a Plan
             and Agreement of Merger, effective August 21, 1998 the Company
             merged with a Colorado Corporation. The Colorado Corporation was
             incorporated on March 20, 1997 under the name Remington Assets
             Limited and effective August 19, 1998 changed its name to Pursuit
             Ventures Corporation. Effective with the terms of the Agreement of
             Merger Pursuit Ventures Corporation, Colorado, became the surviving
             Company.

             The Company filed for a name change with the Colorado Secretary of
             State to Reliance Resources Inc., which became effective September
             8, 1998.

             The Company's principal purpose is to seek out business
             opportunities, including acquisitions, that the Board of Directors,
             in its discretion, believes to be a potential for long term growth.

             Upon incorporation, the Company issued 270,000 shares of its common
             stock and 270,000 warrants to Fountain Colony Holding Corporation
             (formerly known as Argyle Funding, Incorporated) hereinafter
             "Fountain" as its sole stockholder. Upon issuance of the shares,
             Fountain contributed $5,000 to the capital of the Company and
             advanced funds of $30,000 to the Company (see note 2). Fountain
             created the Company for the express purpose of distributing its
             "units" to the shareholders of Fountain in order to create a
             publicly-owned company to acquire a privately-held business which,
             in the opinion of management, has the potential for growth and
             profit. Each "unit" consists of one share of common stock, $0.001
             par value, and one warrant to purchase an additional share of
             common stock of the Company at an exercise price of $10 per share.

             The Company is currently in the development stage. The Company has
             not as yet commenced any operations or identified any potential
             acquisition opportunities. There is no assurance that the Company
             will be able to acquire a satisfactory business on terms favorable
             to the Company or profitably operate any business so acquired.

                                       7

<PAGE>


                             RELIANCE RESOURCES INC.
                     (FORMERLY PURSUIT VENTURE CORPORATION)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS



NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):
         ------------------------------------------

         (b) Organization costs:

             Organization costs consist of accounting and legal fees and are
             being amortized over a 60-month period.

         (c)  Fiscal Year:

             The Company operates on a calendar year basis.

         (d) Basis of Operation:

             The Company prepares its financial statements and federal income
             taxes on the accrual basis of accounting.

NOTE 2   NOTE DUE TO RELATED PARTY
         -------------------------

         The Company had an unsecured note payable to Fountain in the amount of
         $30,000. The note accrued interest at 10% per annum. In 1993 the
         shareholders of Fountain elected to cancel the note and all accrued
         interest and provide the funds to the Company as additional paid-in
         capital. The Company reversed all accrued interest payable to Fountain
         as an offset to expenses in 1993.

NOTE 3   CAPITAL STRUCTURE
         -----------------

         The Company's Articles of Incorporation authorized two classes of
         stock; preferred and common. Preferred stock authorized; 10,000,000
         shares at a par value of $01. There are no issued and outstanding
         preferred shares. The terms, conditions, preferences and provisions of
         the preferred stock have not, as of this date, been established, but
         rather will be established by the Company's Board of Directors.

         The Company has 50,000,000 shares of common stock authorized at a par
         value of $.001. There are 2,000,000 shares issued and outstanding.

         During 1997 the Company issued 230,000 shares of common stock to its
         sole officer and director for services provided to the Company his sole
         capacity as the Company's board member, President, Chief Financial
         Officer and Secretary.

         In June 1998 the Company issued 1,500,000 shares of common stock in
         exchange for the accrued fees due of $20,000 at December 31, 1997 to
         the sole officer and director of the Company. These fees have been
         reflected as paid-in capital to the Company.

                                       8

<PAGE>


                             RELIANCE RESOURCES INC.
                     (FORMERLY PURSUIT VENTURE CORPORATION)
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS


NOTE 4   INCOME TAXES
         ------------

         At December 31, 1998, the Company has a federal operating loss
         carryforward of $59,730 for financial accounting and federal income tax
         purposes. Utilization of the net operating loss in any taxable year
         during the carryforward period may be subject to an annual limitation
         due to the ownership change limitations imposed by the tax law.

         The net operating losses will expire at various dates commencing in the
         year 2005 through 2012.

         The deferred tax asset consists of the future benefit of net operating
         loss carryforwards. A valuation allowance limits the recognition of the
         benefit of deferred tax assets until realization is reasonable assured
         by future profitability.

         The following is a summary of deferred taxes:

                Deferred asset                  $ 9,000
                Valuation allowance              (9,000)
                                                --------
                                                      0
                                                ========

NOTE 5   OPTIONS & WARRANTS
         ------------------

         The Company has not adopted a stock option plan. There are no warrants
         issued or outstanding.

NOTE 6   COMMITMENTS
         -----------

         The Company has been provided minimal office space at a rate of $500
         per month on a month to month basis.

                                       9