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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 1997

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

         For the transition period from _____________ to ________________.

                          COMMISSION FILE NO.: 0-20312


                        VISTA INFORMATION SOLUTIONS, INC.
             (Exact name of registrant as specified in its charter)

                  DELAWARE                        41-1293754
        (State or other jurisdiction of        (I.R.S. Employer
        incorporation or organization)         Identification No.)

  5060 SHOREHAM PLACE, #300, SAN DIEGO, CA           92122
  (Address of principal executive offices)         (Zip code)

    Registrant's telephone number, including area code:  (619) 450-6100

      Securities registered pursuant to Section 12(b) of the Act: NONE

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

                          COMMON STOCK, $.001 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 such
filing requirements for the past 90 days.  YES   X    NO
                                               ------    -----

         Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not 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].

         Revenues for the period ended December 31, 1997 were approximately
$10,391,000.

         As of March 30, 1998 13,810,982 shares of Common Stock of the
Registrant were deemed outstanding (assuming conversion of 702,487 shares of
the Registrant's convertible voting preferred stock into 4,161,980 shares of
Common Stock) and the aggregate market value of the Registrant's voting stock
as of that date (based upon such assumed conversion into Common Stock and the
average of the closing bid and asked prices of the Common Stock as of that
date reported by the NASDAQ SmallCap Market), excluding outstanding shares
beneficially owned by directors and executive officers, was approximately
$25,960,648.

                       DOCUMENTS INCORPORATED BY REFERENCE

         None

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                                     PART I


ITEM 1.  GENERAL DEVELOPMENT OF BUSINESS.

         This section contains forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934 and Section 27A of the
Securities Act of 1933, which are subject to the "safe harbor" created by
that section. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates" and similar expressions or variations of
such words are intended to identify forward-looking statements, but are not
the exclusive means of identifying forward-looking statements in this Report.
Additionally, statements concerning future matters such as the features,
benefits and advantages of the Company's products, the development of new
products, enhancements or technologies, business and sales strategies,
competition and facilities needs and other statements regarding matters that
are not historical are forward-looking statements. Such statements are
subject to certain risks and uncertainties, including without limitation
those discussed in "Risk Factors" section of Item 6 of this Report. The
Company's actual future results could differ materially from those projected
in the forward-looking statements. The Company assumes no obligation to
update the forward-looking statements. Readers are urged to review and
consider carefully the various disclosures made by the Company in this
Report, which attempts to advise interested parties of the risks and factors
that may affect the Company's business, financial condition and results of
operations.

         VISTA Information Solutions, Inc. ("VISTA" or the "Company")
provides environmental risk information and address-based hazard and risk
classification information to bankers, engineers, insurance companies and
corporations throughout the United States. VISTA is comprised of two primary
product lines. The first, conducted principally in California, provides
address and name based environmental risk information about properties and
companies in the United States to bankers, engineers and corporations. The
second, conducted principally in Minnesota, provides information on
address-based hazard and classification information to property/casualty
underwriters.

         The Company, originally known as DataMap, Inc. ("DMI"), was founded
in 1975 to develop geographic-demographic analysis tools for business. From
inception until 1995, the Company focused on developing its geocoding
technologies (more fully explained below) and the related databases that
provide small area demographic information and address-based hazard and
classification information, and preparing geographically-based demographic
reports used for direct marketing and real estate site location. The Company
focused its initial selling efforts for its database services on the
insurance industry through a joint venture arrangement with the Insurance
Services Office, Inc. ("ISO"). In 1995, the Company expanded its product
offerings by acquiring, through a wholly owned subsidiary, VISTA
Environmental Information, Inc. ("VISTA Environmental"). The acquisition of
VISTA Environmental expanded the Company's existing product line to include
environmental risk information and significantly increased the marketing
capability within the Company. On May 23, 1995, the Company changed its name
from DataMap, Inc. to "VISTA Information Solutions, Inc."

         The Company was incorporated under the laws of the State of
Minnesota in 1975. On March 27, 1998 the Company was reincorporated in the
state of Delaware concurrent with a one-for-two reverse stock split, pursuant
to which each two outstanding shares of the Company's Common Stock were
converted into one share of Common Stock. In connection with the
reincorporation, the par value of the common and preferred was changed to
$0.01 per share. All references to common shares, (prices, conversion rates
and common stock equivalents) have been restated to retroactive reflect the
effect of the split.

         The Company's executive office is located at 5060 Shoreham Place,
#300, San Diego, CA 92122, phone number (619) 450-6100.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.

         The Company operates in a single industry segment: information
services including environmental risk information and address-based hazard
and classification information.

NARRATIVE DESCRIPTION OF THE BUSINESS.

         VISTA provides environmental risk information services and
address-based hazard and classification information services to bankers,
engineers, insurance companies and corporations throughout the United States.
VISTA is comprised of two primary lines. The first, conducted principally in
California, provides address and name based environmental risk information
about properties and companies in the United States to bankers, engineers and
corporations. The second, conducted principally in Minnesota, provides
information on address-based hazard and classification information to
property/casualty underwriters.

                                     -1-
<PAGE>

ENVIRONMENTAL RISK INFORMATION SERVICES

         The environmental risk information services portion of VISTA's business
was organized with the goal of meeting the needs of bankers, engineers,
corporations and others for environmental risk information relating to
properties and companies in the United States. VISTA gathers and collects
information from hundreds of federal, state, and local governmental agencies and
stores such information in proprietary databases. From this information, the
Company has developed a diverse family of services, each tailored for the unique
needs of specific customer markets.

         INDUSTRY FOCUS. The need for environmental risk information originated
with the enactment of the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (CERCLA) which imposes strict liability for the full cost
of cleanup of environmentally contaminated property regardless of responsibility
for the contamination or fault. The Superfund Amendments and Reauthorization Act
of 1986 (SARA) established an "Innocent Landowner" defense which eliminated
liability provided certain due diligence was performed before acquisition. One
step in the process of satisfying the Innocent Landowners Defense requires
routine, timely and complete searching of government records for notice of
environmental risk. As a result of this legislation and additional enactments of
state and federal environmental laws, banks, corporations, attorneys, insurance
companies and environmental engineering firms have been and are continuing to
seek efficient means to gather environmental information. The consulting
engineering market segment has been serving bankers, developers, corporations
and others by providing Phase I and Phase II site assessments and many other
types of remediation and compliance review services. During 1993, the industry
and its clientele adopted new standards, ASTM-E 1527 and E-1528, which, for the
first time, provided clear guidelines for environmental due diligence in
commercial real estate transactions. These guidelines require a search of
government environmental records to check the known risks associated with a
property. VISTA provides a set of software and services that meet the
requirements set out in the standards. VISTA also provides environmental
database reports to help this clientele conduct compliance audits, waste
disposal audits, benchmark reviews and marketing for strategic planning
programs.

         In addition to using environmental information to establish the
Innocent Landowners Defense, the economic impact of environmental problems on
properties and companies arises in a number of other contexts, all having
potentially adverse effects on a company's finances. For example, banks are
monitored by the FDIC as to impact of environmental risk on property values
and the subsequent effect this has on the value of collateral and on the
banks' financial stability. Also the federal securities laws require
disclosure regarding the material effects of compliance with federal, state
and local environmental laws and pending legal proceedings, and may require
discussion of the impact of such compliance.

         DEVELOPMENT OF THE ENVIRONMENTAL DATABASE. As a result of the
enactment of federal and state environmental laws and regulations during the
1970's and 1980's, various governmental agencies began collecting massive
quantities of information about environmental contamination and the
activities of businesses that could impact the environment. These
governmental agencies continue to collect, update and enhance information on
environmental issues. Each governmental agency, however, has different
information that it provides and various media formats for the information
collected. Furthermore, each governmental agency has its own database and
communication process and updates its information on different timelines
throughout the year. As a result of this lack of centralization of
environmental information, environmental engineers, financial institutions
and other companies did not have a cost-effective, timely way to gain access
to this extensive environmental risk information directly from the
governmental sources. The need for this information has greatly increased
since the 1970s and 1980s as a number of judicial, statutory, regulatory and
economic factors have encouraged participants in the real estate markets
(including owners, operators, lenders and insurers) to demand such
information to avoid potentially catastrophic environmental cleanup liability.

         In response to this need, VISTA has developed a national database
containing environmental information on approximately 3.5 million facilities
and properties by gathering information from more than 600 public sources. On
an annual basis, VISTA regularly processes approximately 60 million
environmental records from such sources, with more than 50,000 facilities or
properties added or deleted each month. VISTA has developed this database
using its proprietary geographic information systems capabilities, and has
also created on-line distribution channels.

                                     -2-
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         PRODUCT LINES. The Company has developed a diverse family of
services, each tailored for the unique needs of specific customer markets.
The following depicts the broad categories of current VISTA services
organized by general application.

          REAL ESTATE TRANSACTION SCREEN REPORTS ("RETSR"). RETSRs are
specifically designed to provide easy to understand, basic environmental
hazard data about a specific piece of property and its immediate surrounding
area. RETSRs come in a variety of formats, from a single page screen to a
more detailed data report containing a map depicting the property and risk
discovered. These reports give the client the ability to identify
environmental hazards from public records with a low price screening tool and
add more layers of detail (and higher prices) as the need is discovered. All
VISTA RETSRs conform to the "Government Records Search" element of the ASTM
standards.

         SITE ASSESSMENT REPORTS ("SAR"). SARs are designed specifically for
the environmental engineering market and are consistent with the ASTM-E 1527
standards. These reports provide a quick and accurate, low cost supplement to
the "Phase I" site assessment process which is the common standard in all
commercial real estate transactions. VISTA supports these clients with
additional information obtained from third parties including Sanborn
historical maps, topographical maps, aerial photos and chain of title records.

         COMPLIANCE REPORTS. In addition to map based reports, the RETSR and
SAR, VISTA offers a full line of compliance reports which provide extensive
information about operational compliance with all the major pieces of
environmental legislation including the Clean Air Act, as amended, Clean
Water Act, as amended, Resource Conservation and Recovery Act of 1976,
Occupational Safety and Health Act of 1970, Toxic Substances Control Act and
several others. Compliance reports can be prepared for a specific facility or
an entire company including all its facilities. Clients may order these
reports to audit their own facilities, for vendor audits or for acquisition
analysis and due diligence. Pricing is based on the number of facilities and
the level of detail the customer requests. During 1995, VISTA began offering
a new line of compliance reports which allow companies to compare their
environmental records with those of competitors, or other companies in the
same geographic area. The studies normally include comparisons of compliance
records, remediation requirements, Superfund responsibility, toxic release
reporting and waste minimization efforts. Major companies seeking ISO 14000
certification can use this product to establish a baseline from which to
measure future operational improvements. Others can use it for setting
internal goals and management incentives, or for demonstrating superior
performance to regulators, investors and other constituencies.

         VISTA INFONET-TM-. A new generation electronic commerce, utilizing
Internet technology and access has been deployed to service clients on the
Internet. This new service is commercially known as VISTA INFONET. Clients
who have established INFONET accounts are given special access to the VISTA
Internet Website where they are able to order certain VISTA reports and
receive an electronic file of the report via their Internet Email which can
be printed or archived.

         STARVIEW-TM-. The Company has developed an "off-the-shelf" family of
Windows based software modules known as STARVIEW. The various modules of
STARVIEW bring the power of VISTA risk information and VISTA reports to the
desktop of the customer. Currently VISTA licenses three modules in the
STARVIEW suite:

         1.   REAL ESTATE. The Real Estate module is used to prepare Site
              Assessment and Transaction Screen radius reports, which provide a
              concise review of known and potential environmental risk
              associated with a specific property and surrounding area. Standard
              Real Estate report templates conform to or exceed ASTM standards
              for government record searches. Reports using extended radii or
              user-specified search criteria can also be easily defined and
              prepared.

         2.   TSDF PERFORMANCE. The TSDF Performance Monitor module is a
              cost-effective way to screen and evaluate waste handler
              performance. The Performance Monitor contains more than 650
              complete TSDF audits. It allows users to benchmark performance
              between TSDFs, or monitor changes within individual facilities as
              new information is released. The Performance Monitor is also
              valuable in identifying what generators use specific TSDFs and
              evaluating potential `deep pocket" exposure.

         3.   SEARCH!. The SEARCH! module is an entirely new tool for
              environmental risk managers and provides immediate desktop access
              to the 3.5 million record VISTA database. Clients use the SEARCH!
              module for both risk management and business development, and have
              the ability to screen environmental risk associated with specific
              companies, properties, or geographic areas.

                                     -3-

<PAGE>

         CUSTOMER BASE. VISTA's customer base for environmental information
services include consulting engineers, financial institutions, law firms,
real estate finance companies, insurance companies and major corporations
nationwide. VISTA's services are sold directly to its customers and through
established resellers, including Reed Elsevier's Lexis-Nexis services and
Equifax Insurance & Special Services. VISTA's services have an exclusive
endorsement by the American Bankers Association and many state banking
associations.

         SALES AND MARKETING. VISTA markets its environmental information
services through direct sales and through value-added resellers and other
strategic relationships mentioned above. VISTA has approximately 17 direct
sales representatives in 8 cities. These sales representatives target the
banking, corporate and engineering markets and are supported through regional
sales centers in Philadelphia and San Diego. The sales force is supplemented
by the value-added resellers and other sales agents.

         COMPETITION. The Company believes that the principal competitive
factors in the environmental information services business are price,
accuracy and completeness of data, readability of reports and the speed and
ease of delivery. While the Company competes on the basis of each of these
factors, management believes that the Company's primary competitive strengths
in the environmental information services business are the accuracy and
completeness of its data, the readability of its reports and the speed and
ease of delivery particularly through STARVIEW and INFONET.

         VISTA is aware of only two other firms with national environmental
database services and numerous smaller local companies focused on a single
state or regional market. These national competitors are Environmental Data
Resources, Inc. ("EDR") and Environmental Risk Information & Imaging Services
("ERIIS"). In addition to the two national competitors, there are a number of
smaller regional and local competitors. These firms often originate out of an
environmental engineering background, focus on a city, state or small region
and have their strength in understanding the local available data sources.

GEOGRAPHIC INFORMATION SERVICES

         The Company's second line of business had its origin in 1975 and has
focused on the development of geographic-demographic data analysis tools for
businesses. Supporting this business line, the Company has developed a
proprietary service known as the Geographic Underwriting System-Registered
Trademark- ("GUS") which delivers address-based hazard and classification
information to property/casualty insurance underwriters. GUS provides
insurance underwriters and loss control groups of insurance companies with
on-line or batch access to a series of reports presenting specific
classification and hazard information about the property to be insured. The
Company's geo-demographic information databases, technological understanding
and techniques of geographic information processing provide the basis for its
current services. Additional insurance information layers can be added to the
Company's current GUS service offering due to the application's modular
design.

         The Company's GUS services are the subject of an exclusive
arrangement with ISO, a company providing services to approximately 1,400
participating property/casualty companies which collectively write
approximately 80 percent of all property and casualty insurance in the United
States. In October 1992, the Company and ISO entered into a 15-year mutually
exclusive contract with a five year extension option to offer a national
system to electronically provide geographically based information to insurers
(the "ISO Agreement"). The GUS project links the Company's geographic
information systems technology with ISO's insurance underwriting and other
insurance information. Under the provisions of the ISO Agreement, the Company
provides its GUS software and support and ISO provides contract
administration and marketing of the product to its customer base. Generally,
the Company and ISO share project revenues equally. Both companies also
equally share the incremental costs of GUS project development through the
term of the ISO Agreement, which include costs incurred to date in connection
with the development of the Public Protection Classification Layer (see " --
Product Lines", below).

         INDUSTRY FOCUS. In the geographic information service area, the
Company focuses primarily on the property/casualty insurance industry for
sales of its services through ISO. The Company believes that the
implementation of GUS service can improve a property/casualty insurer's
underwriting process by reducing the number of misclassifications due to
human error, reducing the amount of personnel time involved in the
underwriting process, and providing an objective measure which will support
the insurer in defending rate determinations before state insurance
commissioners and consumer groups. In addition, GUS services provide a total
package of risk information that the Company believes is not presently
available on-line or in an easily accessible electronic format.

                                     -4-

<PAGE>

         DESCRIPTION OF THE DATABASE. GUS contains two principal databases
that provide information to the Company's customers: (i) insurance hazard
data (the "Hazard Database") and (ii) road, street and postal database (the
"Roadbase"). The Hazard Database is structured geographically as well as by
the type of hazard (e.g. crime ratings, auto territories, windstorm, extended
coverage zones, public protection classifications, earthquake risk and fire
districts) and includes information for all 50 states and the District of
Columbia. The Roadbase contains two sources of "raw data," the
Dynamap/2000-Registered Trademark- street network database from Geographic
Data Technology (GDT) of Lebanon, NH,and the AMS II database of postal
delivery information produced and maintained by the United States Postal
Service ("USPS").

         Both of the GUS databases are updated periodically throughout the
calendar year based on the source of the raw data. For the Hazard Database,
fire protection data is updated on a monthly basis. Other "hazard types" are
updated annually. Most of the insurance-specific data is updated through a
process of collection, assessment, classification, normalization, formatting,
dataset archiving, and uploading activities for test and production systems.

         The Roadbase is updated quarterly. AMS II is generated and released
monthly by the US Postal Service. GDT updates and releases the
Dynamap/2000-Registered Trademark- database quarterly. The Company developed
a proprietary software system called ZIPR-Registered Trademark- that
integrates the Dynamap/2000 database and the USPS AMS II files, automatically
normalizing, matching, correcting, filling in, and inferring information. The
ZIPR-Registered Trademark- process links the raw databases and produces a
geographically complete master database capable of accurately locating
"postal compliant" addresses in the United States. The Roadbase that is
uploaded into GUS-Registered Trademark- is an extract of the master database
created and maintained within ZIPR-Registered Trademark-. With each update,
the Roadbase consists of the "most current" road names, street positions and
postal data all optimally structured for the address matching and query
process portion of a GUS-Registered Trademark- transaction.

         As additional opportunities are identified, the Company intends to
evaluate adding additional hazard database layers to GUS to complement the
existing Hazard Database and the Roadbase and thereby provide "one-stop
shopping" for insurance underwriting information. For example, the company
released a new "Earthquake Information Layer" in 1996 that provides
underwriters with important earthquake-related data.

         DESCRIPTION OF THE UNDERLYING TECHNOLOGY. Central to the development
of the information database is a process called geocoding. Geocoding is the
ability to accurately process a street address and convert this address to a
latitude and longitude coordinate pair. If it is not possible (because of
incomplete or inaccurate raw data from either Dynamap/2000 or the USPS) to
assign unique coordinates to an individual address, the Company's geocoding
process will assign latitude/longitude coordinates corresponding to its
street range, postal carrier route, zip code or city centroid. The Company
believes that the resulting geocode assignments offer the broadest coverage
available of any competitive geocoding technology. The Company has developed
proprietary software that performs this geocoding function ("Geocoder 2").

         GUS is intended to deliver location-specific risk information to
insurance underwriters via the proprietary electronic network operated by ISO
("ISOTEL") and may be accessed by either telecommunication or batch
processing. GUS information can also be accessed by subscribers of the
Equifax Insurance Services information network, which has a direct on-line
link to the ISOTEL network. Insurance company subscribers are connected
directly to GUS service through an office terminal utilizing ISOTEL. The
process to connect to ISO's network is easy and is used regularly by many ISO
participating companies. In batch mode, large numbers of property location
addresses are submitted for processing to ISO, and are performed during
off-peak hours by ISO as they generally require considerable computer time
and produce a large number of reports. The reports requested are written to
tape and returned to the insurance company. While batch processing generally
has a lower per-transaction cost, the application of batch processing is more
limited, often involving industry analyses or audit functions.

         The primary computer system for processing GUS service transactions
is capable of processing up to 15,000 transactions per hour. The primary
system located at ISO's data processing facility has a functionally
equivalent back-up system capable of assuming the transaction load for GUS
service within one hour of a failure of the primary system. VISTA maintains
the back-up system at its Minnesota location and is connected to the ISO
network with a dedicated communication line.

                                     -5-
<PAGE>

         As an alternative to receiving access to GUS through the ISO
electronic network, the Company has developed a "flat file version" of GUS to
market to insurance companies that have developed their own application
software. The flat file version of GUS, or ZIP+GUS, is a pre-processed
geographic file to which the Company appends all of the hazard layer ratings
and classifications found in the standard on-line GUS. Using standard
database look up software or the insurance company's own application
software, the user can submit addresses to the system and obtain GUS ratings
and classifications. ZIP+GUS converts GUS information into a database that
can be incorporated into the insurance company's internal MIS operations.
Development of the "flat file version" of GUS for a customer requires
customization to the customer's specific needs as each customer typically
requests different GUS layers for its system.

         PRODUCT LINES.  GUS currently provides the following information
layers to insurance companies:

         PUBLIC PROTECTION CLASSIFICATION LAYER (AVAILABLE IN ALL STATES, AND
THE DISTRICT OF COLUMBIA) ("PPC"). PPC reports provide the following
information to the insurance company: (i) ISO standard protection
classification; (ii) fire district name; (iii) name of and distance to
nearest fire station (measured in tenths of miles); (iv) water supply type;
and (v) revision dates for all data and confidence factors for measured
distances;

         AUTO LAYER (AVAILABLE IN ALL STATES, AND THE DISTRICT OF COLUMBIA).
GUS's Auto Layer provides the following information: (i) ISO territory
classifications; (ii) drive distances for up to two work addresses; and (iii)
revision dates for all data and confidence factors.

         WIND LAYER (AVAILABLE IN ALL STATES, AND THE DISTRICT OF COLUMBIA).
GUS's Wind Layer provides the following information: (i) ISO extended
coverage zone (residential and commercial); (ii) ISO extended territory code
(residential and commercial); (iii) wind pool eligibility; (iv) distance to
nearest large body of water and ocean or gulf; (v) five historical wind storm
events closest to the insured property, date of occurrence and measured wind
speed; and (vi) revision dates for all data and confidence factors for
measured distances.

         CRIME LAYER (AVAILABLE IN ALL STATES, AND THE DISTRICT OF COLUMBIA).
GUS's Crime Layer provides the following information: (i) composite crime
rating factor; (ii) arson rating; (iii) motor vehicle theft rating; (iv)
robbery rating; (v) aggravated assault rating; (vi) burglary rating; (vii)
personal crime index; (viii) property crime index; and (ix) revision dates
for all data.

         EARTHQUAKE LAYER. The GUS Earthquake Layer is particularly important
to the California market and provides the following information: (i) ISO and
California DOI earthquake zones; (ii) risk index (iii) soil type, landslide,
liquefaction, and ground failure risk; (iv) five closest faults with related
data; and (v) site seismity.

         PREMIUM TAX. During 1997 ISO and VISTA successfully developed and
marketed a new service in Kentucky, which provides information to insurers
about geographic areas where special state taxes would apply to policies
written in those areas. This information will assist insurers in accurately
reporting to the agencies due such taxes as well as helping them assess the
costs of doing business in those areas. ISO and VISTA are actively
considering incorporating this data as a layer in GUS and the development of
similar data in approximately 13 other states.

         MISCELLANEOUS LAYERS. The Company also provides an information layer
that identifies California property that is located in brush fire zones and
an information layer providing windpool data in 8 states.

         CUSTOMER BASE AND SALES AND MARKETING. GUS is currently being
marketed to the insurance industry exclusively through the ISO Agreement.
Under the terms of the ISO Agreement, a national sales force employed by ISO
is responsible for sales of the Company's GUS services to members of ISO. The
Company supports ISO's sales efforts by providing sales and technical
training presentations for ISO personnel, assisting ISO field sales
representatives in preparing proposals, participating in joint field sales
calls and sharing resources with ISO at industry trade shows and conferences.

         The Company estimates that the selling and implementation cycle for
GUS service to a typical insurance company takes approximately six to nine
months. Implementation of GUS requires an insurance company to make a
commitment to alter its current way of doing business. For example, a
majority of insurance companies do not currently collect work addresses on
auto policy applications therefore making it difficult to calculate drive
distances. The Company is aware of at least ten insurers who are in various
stages of evaluation of the GUS service which includes over $1,000,000 of
signed test agreements related to new underwriting requirements in the state
of Texas discussed below. This statement is forward looking and subject to
certain risks and uncertainties. No assurances can be made that these
contracts can be signed or that, if signed, they would generate the amount of
revenues discussed above.

                                     -6-

<PAGE>

         In 1997 the Texas Department of Insurance announced the decision to
replace its Key Rate Schedule risk classification system with ISO's PPC codes
no later than May 1, 1998. As a result of this decision, many insurers have
begun evaluating GUS as a means of obtaining PPC codes.

         COMPETITION. Given the exclusive nature of the ISO Agreement, the
Company believes that it does not have any direct competitors for sales
through ISO utilizing the GUS software. Certain of the GUS layers, or
subfiles, do have competitors, however, the Company does not believe that
there are any competitors that presently offer an on-line hazard and risk
data service comparable to that offered by GUS. No assurance can be given,
however, that competing services will not be developed in the future.

PRODUCT REVENUES AND SIGNIFICANT CUSTOMERS

         For the fiscal year ended December 31, 1997, environmental risk
information service revenues comprised 68 percent of total revenues, with the
balance comprised of geographic information services revenues. For the fiscal
year ended December 31, 1996, environmental risk information service revenues
comprised 88 percent of total revenues, with the balance comprised of
geographic information services revenues. The Company and ISO generally share
project revenues equally, net of any payments to third party information
providers. The Company's share of reveneus under this agreement were
approximately $2,700,000 and $890,000 for the years ended December 31, 1997
and 1996, respectively. In this regard, approximately $1,500,000 (or 14
percent) of the 1997 revenues are from one ISO customer.

RESEARCH AND DEVELOPMENT

         Research and development expenditures were approximately $919,000
and $821,000 for the years ended December 31, 1997 and 1996, respectively.
Research and development costs include database building and digitizing costs
and amounted to approximately $185,000 and $183,000 for the years ended
December 31, 1997 and 1996, respectively and the development of new operating
systems for the environmental system of approximately $734,000 and $638,000
respectively. To date, the Company's research and development activities
related to the development of GUS services and the development of new
services, have been conducted at its offices in Edina, Minnesota.

         The Company has expended approximately $7.9 million to date on
developing the GUS technology and related information layers. Since the
completion of the PPC layer, the Company has not, and does not expect to make
significant development expenditures for the existing risk information layers
in 1998 except for maintenance of the software and update to the existing
layers.

EMPLOYEES

         As of December 31, 1996, the Company had 130 full time employees
including 64 employees in operations, 33 employees in sales and marketing, 19
employees in research and development and 14 employees in finance an
administration. On December 31, 1997, the Company had increased its operating
size to 137 full time employees including 67 employees in operations, 35
employees in sales and marketing, 22 employees in research and development
and 13 employees in finance and administration.

         No Company employee is currently represented by labor unions and the
Company is not a party to any collective bargaining agreement. The Company
has never been subject to any form of work stoppage or strike and has not
experienced any labor difficulties. Management believes that its employee
relations are good.

PATENTS, COPYRIGHTS AND TRADEMARKS

         The Company's business is dependent upon its ability to gather,
manipulate and report publicly available data through the use of proprietary
techniques. Although management believes that the Company's business is not
significantly dependent upon patent protection, the Company has investigated
possible patent protection for several of the software techniques used in the
development of its geographic databases. To date, the Company has no patents
and has made no patent applications.

         The Company has registered trademarks of "DataMap-Registered
Trademark-," which registration term expires on August 13, 2001, and
"CAM-1+-Registered Trademark-," which registration term expires on April 30,
2001, and has registered the service mark "GUS-Registered Trademark-" which
registration term expires on August 11, 2002

                                     -7-

<PAGE>

         The unregistered trademarks and service marks which are used by the
Company are ZIPR-TM-, Geosurance-TM-, VISTAEXPRESS-TM-, VISTA Information
ExpressWay-TM-, VISTA INFONET-TM-, TSDMonitor-TM-, TSDF Performance
Monitor-TM-, QuickSite-TM-, STARVIEW-TM-, SEARCH!-TM- Business Trac-TM- and
Business Traks-TM-. In connection with the sale of assets to BITI in early
1996, the Company sold rights in the unregistered trademarks Census Traks
Plus-TM-, Census Traks Collect-TM- and MarketPro-TM-. As part of the asset
sale, the Company also granted BITI a non-exclusive license to use the
"DataMap-Registered Trademark-" name for one year from the date of purchase.

FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES.

         The Company's operations are conducted within the United States, and
no material portion of the Company's revenues is generated by export sales.

 ITEM 2.  DESCRIPTION OF PROPERTIES

         The Company's principal executive offices and environmental risk
information services operations are located at 5060 Shoreham Place, San
Diego, California. The Company leases approximately 18,500 square feet of
space at this facility pursuant to a lease expiring in December 2003. The
lease for this facility provides for rent of approximately $26,000 per month,
subject to increase on an annual basis not to exceed 5 percent per year. The
Company also pays a pro rata share of operating expenses associated with this
space.

         The Company also leases approximately 6,300 square feet of space at
4510 W. 77th Street, Edina, Minnesota for its geographic information services
operations pursuant to a lease executed June 1996 and expiring in April 2001.
The lease for this facility provides for rent of approximately $3,300 per
month, subject to increases in years three and five of $525 per month each.
The Company also pays a pro rata share of taxes associated with this space.

         The Company leases approximately 4,100 square feet of office space
located at 5 Sarnowski Drive, Glenville, New York, for a data center and
sales office for its environmental information business pursuant to a lease
executed January 1997 expiring in December 2001. The lease for this facility
provides for rent of approximately $3,900 per month, subject to increases in
years two through five of $120 per month each year.

         The Company also leases approximately 1,000 square feet of office
space located at 559 W. Uwchlan Avenue, Exton, Pennsylvania, as a sales
office for its environmental information business pursuant to a lease
expiring in February 1999. The lease for this space provides for rent of
approximately $1,300 per month .

         The Company also leases approximately 2,500 square feet of office
space located at 187 Route 81, Killingworth, CT for a technical center for
its environmental information business pursuant to a lease executed December
1997 expiring in January 1999

ITEM 3.   LEGAL PROCEEDINGS

None

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

         No matter was submitted to a vote of the security holders of the
Company during the quarter ended December 31, 1997.

                                     -8-

<PAGE>



                                    PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's Common Stock is currently traded on the NASDAQ
SmallCap Market under the symbol "VINF. The following table sets forth, for
each of the quarters indicated, the range of high and low bid quotations for
the Company's Common Stock. Quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions.

<TABLE>
<CAPTION>
           QUARTER ENDED                                                     HIGH             LOW
           -------------                                                     ----             ---
<S>                                                                        <C>              <C>
           FISCAL 1996
                    Quarter Ended March 1996                                $1.750           $0.750
                    Quarter Ended June 1996                                  4.500            1.250
                    Quarter Ended September 1996                             4.250            1.375
                    Quarter Ended December 1996                              2.000            1.375
           FISCAL 1997
                    Quarter Ended March 1997                                $1.876           $0.688
                    Quarter Ended June 1997                                  3.626            1.000
                    Quarter Ended September 1997                             6.876            3.250
                    Quarter Ended December 1997                             10.500            5.876
</TABLE>

         Share prices reported in the above table have been doubled from
their actual prices to reflect the reverse split discussed above.

         As of March 20, 1998, the Company's transfer agent reported
approximately 527 holders of record.

         The Company has never paid any cash dividends on its Common Stock.
The Company currently intends to retain any future earnings to fund the
development of its business and does not anticipate that it will pay cash
dividends on its Common Stock in the foreseeable future. Additionally,
agreements with various lenders restrict the Company's ability to pay cash
dividends.

                                     -9-
<PAGE>


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

         The following discussion and analysis provides information that the
Company's management believes is relevant to an assessment and understanding
of the Company's results of operations and financial condition. This
discussion should be read in conjunction with the financial statements and
footnotes, which appear elsewhere in this Report.

         This discussion and analysis contains forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934 and
Section 27A of the Securities Act of 1933, which are subject to the "safe
harbor" created by that section. Words such as "expects," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates" and similar expressions
or variations of such words are intended to identify forward-looking
statements, but are not the exclusive means of identifying forward-looking
statements in this Report. Additionally, statements concerning future matters
such as the features, benefits and advantages of the Company's products, the
development of new products, enhancements or technologies, business and sales
strategies, competition and facilities needs and other statements regarding
matters that are not historical are forward-looking statements. Such
statements are subject to certain risks and uncertainties, including without
limitation those discussed in "Risk Factors" section of Item 6 of this
Report. The Company's actual future results could differ materially from
those projected in the forward-looking statements. The Company assumes no
obligation to update the forward-looking statements. Readers are urged to
review and consider carefully the various disclosures made by the Company in
this Report, which attempts to advise interested parties of the risks and
factors that may affect the Company's business, financial condition and
results of operations.

         VISTA provides environmental risk information and address-based
hazard and classification information to bankers, engineers, insurance
companies and corporations throughout the United States. The Company,
originally known as DataMap, Inc. ("DMI"), was founded in 1975 to develop
geographic-demographic analysis tools for business ("GIS"). Supporting this
business line, the Company has developed a proprietary service known as the
Geographic Underwriting System ("GUS-Registered Trademark-") which delivers
address-based hazard and classification information to property/casualty
insurance underwriters. GUS provides insurance underwriters and loss control
groups of insurance companies with on-line or batch access to a series of
reports presenting specific classification and hazard information about the
property to be insured. The Company's geo-demographic information databases,
technological understanding and techniques of geographic information
processing provide the basis for its current services. Additional insurance
information layers can be added to the Company's current GUS service offering
due to the application's modular design.

         On February 28, 1995, DMI acquired all the outstanding common stock
of VISTA Environmental Information, Inc. ("VISTA Environmental") in exchange
for newly issued common and preferred shares of DMI. The acquisition of VISTA
Environmental expanded the Company's existing product line to include
environmental risk information and significantly increased the marketing
capability within the Company. VISTA Environmental provides address and name
based environmental risk information about properties and companies in the
United States to bankers, engineers and corporations. On May 23, 1995, the
Company changed its name from DataMap, Inc. to "VISTA Information Solutions,
Inc."

         In September 1997, the Company terminated its VISTAEXPRESS product
line, which was a proprietary on-line system originally acquired as a part of
the February 1995 acquisition of Vista Environmental Information, Inc.
Management assigned a value for the asset based on historical revenue growth
at the time of the acquisition. VISTAEXPRESS was terminated due to
management's decision to stop supporting the product after experiencing
increased maintenance costs and related technical difficulties in supporting
this version of the product line during the third quarter. As a result of
this event, the Company wrote off the remaining book value of approximately
$980,000 during the third quarter. Management does not expect any material
effects on the future operations and financial position of the Company as a
result of the termination of VISTAEXPRESS. This is due to the fact that, in
March 1997, the Company introduced to the public a replacement product, VISTA
Infonet, which is accessible through the internet and which essentially
substitutes VISTAEXPRESS. As a result of the immediate use of alternate
delivery methods, the Company experienced minimal disruption in the delivery
of its products to VISTAEXPRESS customers until those customers were
transitioned to VISTA Infonet. The Company also accelerated the release of
another replacement product, VISTA Extranet (released in November 1997), as
an additional alternative for customers who did not wish to use the VISTA
Infonet system. As a result of these factors, the Company does not expect any
significant loss of customers from the termination of VISTAEXPRESS.

RESULTS OF OPERATIONS

COMPARISON OF THE TWELVE MONTHS ENDED DECEMBER 31, 1997 TO THE TWELVE MONTHS
ENDED DECEMBER 31, 1996.

         REVENUE. Total revenues increased 24 percent from $8,387,000 for the
year ended December 31, 1996, to $10,391,000 for the year ended December 31,
1997. Revenues from environmental services decreased 5 percent from
$7,407,000 for the year ended December 31, 1996 to $7,065,000 for the year
ended December 31, 1997. GUS revenues increased 247 percent, totaling
$890,000 for the period ended December 31, 1996 compared with $3,326,000 for
the period ended December 31, 1997. Decreases in environmental revenue are
primarily due to recent selling strategies which place a lower emphasis on
resale products (which have lower gross margins), combined with a campaign to
convert existing transaction-based business to longer term contract
relationships through the STARVIEW desktop service. While this service tends
to reduce the revenue generated per transaction, the Company anticipates that
this effect will be mitigated if it is able to capture additional market
share as a result of contractual relationships. This statement is forward
looking and no assurances can be made, however, that sufficient contracts can
be signed to achieve the necessary increase in market share. The increase in
GUS revenue was the result of increased marketing efforts by ISO to sign
contracts with significant insurance underwriters and increasing market
acceptance for the GUS product line. The Company's revenues during 1997 were
not significantly affected by changes in prices compared to 1996.

                                      -10-
<PAGE>

         GROSS MARGIN. Gross margins increased 39 percent from approximately
$5,813,000 for the year ended December 31, 1996 to approximately $8,073,000
for the year ended December 31, 1997. Costs of revenues for GUS decreased 96
percent from approximately $257,000 for the year ended December 31, 1996 to
approximately $10,000 for the year ended December 31, 1997. This decrease was
primarily due to the completion of database layers in early 1997.Gross margin
as a percentage of revenue increased from 69 percent of revenue for the year
ended December 31, 1996 compared to 78 percent of revenue for the year ended
December 31, 1997. Costs of revenues for environmental services decreased
slightly from approximately $2,317,000 for the year ended December 31, 1996
to approximately $2,308,000 for the year ended December 31, 1997.

         OPERATING EXPENSES. Operating expenses increased 7 percent from
$11,411,000 for the year ended December 31, 1996, to $12,184,000 for the year
ended December 31, 1997. This increase is partially the result of an
impairment loss for a portion of the intangible asset "acquired technology
and environmental databases" recorded in connection with the acquisition of
Vista Environmental in 1995 related to the VistaEXPRESS system in September
1997 of approximately $980,000. Increased research and development costs
associated with the StarView system and Internet ordering system also
contributed to the increase in operating expense.

         INTEREST EXPENSE. Interest expense increased 61 percent from
$910,000 for the year ended December 31, 1996, to $1,466,000 for the year
ended December 31, 1997. The primary cause of the increase of interest
expense was the accelerated amortization of approximately $548,000 of the
value of warrants issued with the SIRROM Notes in 1996 and 1997 due to their
early retirements. Due to reduced debt levels at December 31, 1997, interest
expense is expected to be lower in 1998. This statement is forward-looking
and subject to risks and uncertainties including, but not limited to,
strategic initiatives which may require additional capital, and the Company's
ability to achieve and sustain positive cash flow from operations. No
assurances can be made regarding the Company's borrowing requirements in the
future nor the ability of the Company to obtain additional debt financing.

         INFLATION. The Company's management believes that inflation has not
had a material effect on the Company's results of operations or financial
condition.

LIQUIDITY AND CAPITAL RESOURCES

         As reflected in the cash flow statements for 1997, the Company's
operations for the year have not generated sufficient cash flows to meet the
on-going cash needs of the Company. However, the Company believes that
current cash flows being generated from operations, combined with the
borrowing capacity discussed below will be sufficient to fund operations in
1998. Factors impacting this forward looking information are the levels of
the Company's overall revenues and overhead expenses and changes in the
Company's accounts receivable turnover. If revenues are not maintained at
current levels, however, the Company may need to raise additional debt or
equity financing to meet its operating capital needs. In addition, the
Company may need to raise additional capital in the future to meet various
strategic growth and research and development initiatives. There can be no
assurance that the Company will be able to obtain any required additional
funding on satisfactory terms, if at all. If the additional funding is not
obtained, the Company will seek alternative sources of debt and/or equity
financing and, to the extent necessary, will reduce overhead expenditures.

         Net cash used in operating activities for the twelve months ended
December 31, 1997 was approximately $1,771,000 compared to $1,234,000 during
the twelve months ended December 31, 1996. This 43 percent increase was due
primarily to an increase in accounts receivable partially offset by a
decrease in the Company's net loss. Increases in GUS revenues as well as
slower collection performance on environmental revenues were the cause of the
increase in receivables. In addition, the Company reduced accounts payable
and other current liabilities by approximately $380,000 following the receipt
of proceeds from the sale of Series E and Series F Preferred Stock discussed
below.

         Net cash used in investing activities for the twelve months ended
December 31, 1997, was approximately $507,000 compared to $380,000 for the
twelve months ended December 31, 1996. The Company has invested substantially
in computers, software and other technological equipment over the last twelve
months to accommodate the requirements of newer operating systems and
software development tools. Additionally the Company used approximately
$60,000 of cash in a business acquisition.

         Net cash provided by financing activities was approximately
$2,565,000 as a result of net proceeds from the sale of Series E and Series F
Preferred Stock during the twelve months ended December 31, 1997, compared to
$1,650,000 during the twelve months ended December 31, 1996, which was
primarily the result of the SIRROM financing discussed below. Proceeds from
the exercise of options and warrants provided approximately $850,000 of cash
during 1997.

                                     -11-
<PAGE>

         On August 29, 1997, the Company issued 2,500 shares of Series E
Convertible Preferred Stock ("Series E") and 2,500 shares of Series F
Convertible Preferred Stock ("Series F"), both with a par value of $0.001 per
share, to Sirrom Capital Corporation d/b/a Tandem Capital ("Sirrom) at a
stated value and purchase price of $1,000.00 per share for an aggregate gross
purchase price of $5,000,000.00. Sirrom is entitled to receive quarterly
dividends of $30.00 per share which will increase by $5.00 per share for each
year after August 31, 2002. Shares of Series E are convertible into the
Company's Common Stock at an initial conversion price of $5.50 per share. If
the Company does not close a registered public offering of Common stock in
which, (i) the gross proceeds of the offering are at least $15,000,000.00 and
(ii) the offering price per share is greater than $8.00 (a "Qualified
Offering"), the conversion price shall be adjusted to $4.00 per share. Shares
of Series F shall be convertible into Common Stock on or after the earlier of
the closing of a Qualified Offering or July 1, 1998 at an initial conversion
price of (i) 75 percent of the offering price in a successfully closed
Qualified Offering or (ii) in the event the Qualified Offering is not closed
prior to July 1, 1998, 75 percent of the average closing bid price for the
Common Stock for the 20 consecutive trading days prior to June 30, 1998.
Series E stock may be redeemed, at the option of the Company, at any time,
provided the average closing bid price of the Company's Common Stock for the
20 consecutive trading days preceding the date of the redemption notice
exceeds 200 percent of the Series E conversion price. Series F stock may be
redeemed, at the option of the Company, at any time on or after June 30, 1998
provided the average closing bid price of the Company's Common Stock for the
20 consecutive trading days preceding the date of the redemption notice
exceeds 200 percent of the Series F conversion price. The Company used
approximately $2,800,000 of the proceeds from the sale of Series E and Series
F Preferred Stock to retire the 1996 and 1997 Secured Promissory Notes to
SIRROM Capital and approximately $1,060,000 to retire the remaining balance
of the Factoring Loan Agreement with Silicon Valley Bank.

         In 1995, the Company received $446,000 from the sales of 16 percent
convertible subordinated debentures. During 1996, eight debenture holders
elected to convert their principal and accrued interest into common stock.
These transactions converted approximately $187,000 of debt and accrued
interest into 138,000 shares of common stock. During 1997 the remaining
debenture holders converted approximately $325,000 of principal and accrued
interest into common stock.

          The Company assumed $898,928 of convertible subordinated debentures
in the acquisition of VISTA Environmental. The debentures were convertible
into Series C Preferred Stock ("Series C Preferred Stock") at a rate of
$16.72 per share. At December 31, 1995, the debentures, including accrued
interest, were convertible into approximately 74,000 shares of Series C
Preferred Stock and were due in January 1996. In January 1996, the Company
did not repay the debentures. As a result, under the terms of the debentures,
the repayment date was extended to January 1997 and the debenture holders
received, in aggregate, warrants for the purchase of 3,367 shares of Series C
Preferred Stock at $16.72 per share. In January 1997, the Company had the
option to either pay these debentures off or extend them for another year.
The Company chose to extend the debentures and issued warrants for the
purchase of 3,669 shares of Series C Preferred Stock at $16.72 per share. In
September 1997, holders of all outstanding debentures elected to convert
approximately $1,251,000 of principal and accrued interest into common stock,
which fully retired these debentures.

         In February 1996, the Company entered into an agreement with ISO for
a loan, not to exceed $500,000. Advances commenced during the first week of
February 1996 in increments of $25,000 to $50,000. The Company ultimately
borrowed $375,000, and repaid approximately $36,000. Under the agreement, the
balance bears interest at a rate of 1 percent per month on any outstanding
amounts, including accrued interest. Under a supplemental agreement, dated
March 6, 1997, repayment of the loan plus accrued interest will be taken out
of GUS revenue to the extent that it exceeds $135,000 per month. As of
December 31, 1997, the entire amount due under the ISO loan had been repaid
and the loan was retired.

         The Company had recorded a liability to ISO for reimbursement of
costs incurred by ISO for the development of the Public Protection
Classification (PPC) data layer of GUS in the amount of $487,500 which
represents the maximum amount VISTA could be responsible for under the terms
of the agreement with ISO. In November 1997, the Company negotiated a
settlement amount with ISO and subsequently paid the remaining liability in
December 1997.

         On April 30, 1996, the Company entered into an agreement with the
SIRROM Capital Corporation for a $2,500,000 loan in the form of a 13.5
percent, five year, interest only note with warrants to purchase 623,791
shares of Common Stock at an exercise price of $0.02 per share with
additional warrants to be issued for the purchase of 248,888, 301,509 and
374,646 on the anniversary date of the loan in years 3, 4 and 5 respectively.
The Company assigned a value to the warrants of $648,180 based on the fair
market value of the warrants at the date of grant. Accordingly, the note
payable had been discounted by this amount and bore an effective interest of
26 percent. This note was secured by the tangible and intangible assets of
the Company. As discussed above, proceeds from the sale of Series E and
Series F Preferred Stock were used to retire the Promissory Note. As a result
of the retirement, the Company amortized the remaining value ascribed to
warrants issued to SIRROM in connection with the Promissory Notes.


                                     -12-
<PAGE>

         In September 1996, the Company entered into a factoring agreement
with the Silicon Valley Bank. Transactions under the agreement were not
treated as a sale of receivables due to the existence of repurchase
obligations. The borrowings under this arrangement were collateralized by
certain assets of VISTA Environmental. The borrowing arrangement allowed the
Company to borrow up to 80 percent of eligible receivables up to a maximum of
$1,250,000. Proceeds from the loan bore interest at the rate of 1.5 percent
per month. There were additional administrative fees of 1 percent per month
charged by the lender based on the value of the receivables submitted for
borrowing. As discussed above, proceeds from the sale of Series E and Series
F Preferred Stock were used to retire the factoring agreement.

         During 1997, the Company issued $1,000,000 in Senior Subordinated
Promissory Notes. The notes were due 12 months from the date executed, bore
interest at 16 percent and had initial common stock warrant coverage of 100
percent, using an exercise price of 125 percent of the fair market value of
the common stock 21 business days prior to funding. As discussed above,
proceeds from the sale of Series E and Series F Preferred Stock were used to
pay the remaining $300,000 of unpaid principal to SIRROM Capital Corporation.
During 1997 principal and accrued interest of approximately $731,000 was
converted into approximately 421,000 shares of common stock, which fully
retired the obligations.

         The Company has accepted a proposal for a commercial credit facility
of $1,500,000 in place with Silicon Valley Bank. Borrowings under this
facility would bear interest at 0.5 percent above the Prime Lending Rate
published by Silicon Valley Bank. If the Company earns a positive net profit,
after taxes, for one quarter the interest rate would be adjusted to 0.25
percent above the Prime Lending Rate. Borrowings under this agreement are
secured by substantially all the assets of the Company.

RISK FACTORS

         IN ADDITION TO THE OTHER INFORMATION IN THIS REPORT, THE FOLLOWING
FACTORS (AS WELL AS OTHER FACTORS NOT LISTED) HAVE THE POTENTIAL TO
MATERIALLY AFFECT THE COMPANY'S FUTURE OPERATIONS.

         COMPETITION. The Company's environmental risk information service
operates in a highly competitive environment. The ability of competitors to
gain market share away from VISTA or to drive down prices for environmental
risk information may affect the profitability of the Company.

         TECHNOLOGICAL CHANGE. The Company is dependent upon advanced
software development tools to maintain and upgrade its various database and
reporting systems. As currently popular operating systems and software
development tools are changed or replaced, the Company must continually
evaluate the need to migrate its existing applications to these systems and
respond accordingly. The ability to respond to these changes may affect the
performance, compatibility, level of support and market acceptance the
Company is able to achieve for its services. Furthermore, the cost of
maintaining and upgrading technological software and hardware may affect the
profitability and working capital of the Company.

         DEPENDENCE ON ISO FOR GUS REVENUES. The Company's 15 year agreement
with ISO grants them the exclusive sales and marketing rights for GUS
services. Sales of the Company's GUS product line are dependent upon ISO's
ability to penetrate this industry segment.

         YEAR 2000 COMPLIANCE. Many currently installed computer systems and
software products are coded to accept only two digit entries in the date code
field. Beginning in the year 2000, these date codes fields will need to
accept four digit entries to distinguish 21st century dates from 20th century
dates. As a result, computer systems and/or software used by organizations
may need to be upgraded to comply with the "Y2K" requirements. There is
significant uncertainty in the software and information services industries
concerning the potential effects associated with such compliance. While the
Company believes that its systems are compatible with Y2K applications, there
can be no assurance that all Company systems will function properly in all
operating environments and on all platforms. The failure of a customer's
system could involve the Company in costly repair activities and affect
future revenues, both of which would have an adverse effect on the Company's
business, financial condition and results of operations. Moreover, other
software or systems used by the Company's customers may not be Y2K compliant,
which could cause system failures for those or other sources or interactions
between the various systems. As a result, the Company may be involved in
disputes with vendors to various customers concerning the responsibility for
any system failures. Additionally, any revenues associated with the number of
uses of the Company's information services could be adversely affected by
operating system failures affecting those potential customers and users. As a
result, the failure to comply with Y2K requirements by systems not designed
by the Company may also have a material adverse effect on the Company's
business, financial condition and results of operations. The Company is
currently developing and implementing a plan to identify and address
potential difficulties associated Y2K issues and does not expect to expend
any significant funds as a result of these issues.

                                     -13-
<PAGE>

NEW ACCOUNTING PRONOUNCEMENTS NOT YET ADOPTED

         In June 1997, the FASB issued FAS No. 130, "Reporting Comprehensive
Income." FAS 130 establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income includes all changes in equity during a period except those resulting
from investments by owners and distributions to owners. FAS 130 requires that
all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that
is displayed with the same prominence as other financial statements. In the
past, the Company has not generated transactions considered part of "other
comprehensive income."

         In June 1997, the FASB issued FAS No. 131, "Disclosures About
Segments of an Enterprise and Related Information." FAS 131 establishes
standards for reporting information about operating segments. It also
establishes standards for disclosures about products and services, geographic
areas, and major customers. Management is assessing the potential effect of
segment reporting, but has not determined if the Company will be required to
report industry segments. These new standards are effective for periods
beginning after December 15, 1997, and require comparative information for
earlier years to be restated. The implementation of these new standards will
not affect the Company's results of operations or financial position, but may
impact future financial statement disclosures.

         In October 1997, the Accounting Standards Executive Committee issued
Statement of Position (SOP) 97-2 "Software Revenue Recognition." SOP 97-2
provides guidance on applying generally accepted accounting principles in
recognizing revenue on software transactions. The SOP is effective for
transactions entered into in fiscal years beginning after December 15, 1997.
Management of the Company has not determined whether the adoption of SOP 97-2
will have a material effect on the Company's consolidated financial
statements.

ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The Company's Consolidated Financial Statements and Notes thereto,
and the Report of its Independent Accountants thereon, are included in this
Annual Report on Form 10-KSB on pages F-2 to F-26 and on page F-1 of this
Report, respectively.

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

         None.

                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT: COMPLIANCE WITH
         SECTION 16(A) OF THE EXCHANGE ACT

(A)  DIRECTORS OF THE REGISTRANT.

         The names of the Company's directors, their ages, the year in which
each first became a director and their principal occupations as of March 20,
1997 are set forth below.

<TABLE>
<CAPTION>

NAME                       AGE    PRINCIPAL OCCUPATION                                      DIRECTOR SINCE
<S>                       <C>    <C>                                                             <C>
Jay D. Seid                37     Managing Director of Bachow & Associates                        1995
                                  Chairman of the Board of Directors of the Company
Martin F. Kahn             47     President, Cadence Management                                   1995
Thomas R. Gay              52     President and Chief Executive Officer of the Company            1995
Patrick A. Rivelli         61     General Partner of Sunwestern Investment Fund III               1995
Richard J. Freeman         45     Vice President of Century Capital Management, Inc.              1996
Robert Boscamp             50     President and CEO, Axiom Power Solutions, Inc.                  1997
Earl Gallegos              40     Principal, Earl Gallegos Management                             1998
</TABLE>

                                     -14-
<PAGE>

         JAY D. SEID has served as Chairman of the Board of Directors of the
Company since October 1996 and as a director of the Company since 1995. Since
December 1992, Mr. Seid has served as Vice President of Bachow & Associates,
Inc., an Investment Company. From May 1988 to December 1992, Mr. Seid served
as President and General Counsel of Judicate, Inc., a publicly traded
provider of alternative dispute resolution services. Prior to 1988, Mr. Seid
was an attorney specializing in corporate law with Wolf, Block, Schorr and
Solis-Cohen in Philadelphia.

         MARTIN F. KAHN has been a director of the Company since the merger
with VISTA Environmental in February 1995. From February 1995 to October 1996
Mr. Kahn served as Chairman of the Board of Directors and from 1992 to
February 1995, Mr. Kahn served as Chairman of the Board of Directors of VISTA
Environmental. From 1989 to 1992, Mr. Kahn was Chairman of the Board of
Environmental Audit, Inc.. Prior to 1989, Mr. Kahn served as President of BRS
Information Services, a provider of on-line information to healthcare
professionals. Mr. Kahn also serves as Chairman of the Board of OneSource
Information Services, Inc., a developer and marketer of integrated business
information and software, and as Chairman of the Board of CDP Technologies,
Inc., a medical, scientific and technical information provider.

         THOMAS R. GAY has served as a director and as President and Chief
Executive Officer of the Company since the merger with VISTA Environmental in
February 1995. Mr. Gay was a co-founder of VISTA Environmental and served as
the President and CEO of VISTA Environmental from August 1991 to February
1995. From 1988 to August 1991, Mr. Gay served as President of National
Decisions Systems, a company involved in marketing information products,
databases and software, which he also co-founded.

         PATRICK A. RIVELLI has served as a director of the Company since the
merger with VISTA Environmental in February 1995. Mr. Rivelli is a founder of
Sunwestern Investment Fund III Limited Partnership and has been the General
Partner of Sunwestern L.P. since 1988.  Mr. Rivelli has also served as the
President and a director of Sunwestern Managers Inc., the management company
of Sunwestern Limited Fund, since October 1992.  Mr. Rivelli is also a
director of Maxserv Inc., an information services firm.

         RICHARD J. FREEMAN has served as a director of the Company since
October 1996.  Mr. Freeman is Vice President of Century Capital Management,
Inc..  For the past 18 years, Mr. Freeman has held various investment
management positions with Kemper Financial Services, First Chicago Corp.,
Metropolitan Life Insurance Company and the State of Michigan Insurance
Bureau and Treasury Department.

         ROBERT BOSCAMP has served as a director of the Company since October
1997. Since 1995, Mr. Boscamp has been the President and Chief Executive
Officer of Axiom Power Solutions, Inc., a marketer of energy related products
and a wholly-owned subsidiary of Arizona Public Service. From 1990 to 1995,
Mr. Boscamp founded and developed EcoGroup, a provider of information and
market consulting services to the utilities industry. EcoGroup was
subsequently acquired by Trans Union Corporation, an information services
leader. Prior to founding EcoGroup, Mr. Boscamp founded Enercom, a utility
consulting firm, which was subsequently acquired by Equifax, Inc. a leading
provider if information services.

         EARL GALLEGOS has served as a director of the Company since January
1998. Mr. Gallegos is the founder and principal of Earl Gallegos Management,
a consulting firm specializing in the development and implementation of data
processing systems and insurance operations. Prior to 1995, Mr. Gallegos held
various management positions, including Vice President of Operations, within
The Pacific Rim Assurance Company.

         Pursuant to the terms of the Company's Series B Preferred Stock, par
value $.001 per share ("Series B Preferred"), the holders of the Series B
Convertible Preferred are entitled to appoint and elect one director. Mr.
Seid has been appointed to the Board by the Series B Preferred shareholders.
Pursuant to the terms of the Company's Series C Convertible Preferred Stock,
par value $.001 per share, ("Series C Preferred"), the holders of the Series
C Preferred are entitled to appoint and elect two directors. Messrs. Kahn and
Rivelli have been elected to the Board by the Series C Preferred
shareholders. Pursuant to the terms of the Company's Series D Convertible
Preferred Stock, par value $.001 per share ("Series D Preferred"), the
holders of the Series D Preferred are entitled to vote the number of shares
of Common Stock into which the Series D Preferred are convertible, together
with the holders of the shares of Common Stock, voting separately as a class,
for the election of any directors of the Company other than Directors elected
by the holders of Series B Preferred or Series C Preferred.

                                     -15-
<PAGE>

(b)  EXECUTIVE OFFICERS OF THE REGISTRANT.

EXECUTIVE OFFICERS OF THE REGISTRANT

         The executive officers of the Company, their ages and the offices
held, as of March 25, 1997 are as follows:

<TABLE>
<CAPTION>
         Name                       Age     Current Position with Company
         ----                       ---     -----------------------------
         <S>                        <C>     <C>
         Thomas R. Gay              52      President, Chief Executive Officer and Director

         E. Stevens Hamilton        64      Chief Financial Officer, Secretary

         Howard Shuster             47      Vice President, Sales

         Arnold E. Jensen           50      Vice President and Manager, VISTA Information Center

         James Mauch                44      Vice President, Market Development

         Mark F. Catone             40      Vice President, Product Development
</TABLE>

         THOMAS R. GAY has been the President and Chief Executive Officer of
the Company since February 1995. Mr. Gay was a co-founder of VISTA
Environmental and served as the President and CEO of VISTA Environmental from
August 1991 to February 1995. From 1988 to August 1991 Mr. Gay served as
President of National Decision Systems, a company involved in marketing
information products, databases and software, which he also co-founded.

         E. STEVENS HAMILTON has been the Chief Financial Officer of the
Company since January 1996. From January 1995 to December 1995, Mr. Hamilton
provided consulting services to emerging high technology companies under the
sponsorship of the High Technology Resource Center of San Diego. From 1991 to
January 1995, Mr. Hamilton was the Chief Financial Officer of SECOR
International, Inc., an environmental engineering and information technology
consulting company. In addition to serving as the Company's Chief Financial
Officer, Mr. Hamilton continues to provide consulting services to emerging
businesses on a part-time basis.

         HOWARD SHUSTER has been the Vice President of Sales of the Company
since September 1996. Mr. Shuster previously served as Vice President of
Sales for IHS Engineering, Englewood CO. During his 19 year career with IHS
Mr. Shuster held numerous management positions including service as President
of Logicraft Nashua, NH, an IHS subsidiary.

         ARNOLD E. JENSEN has been Vice President and Manager, VISTA
Information Center since February 1995. From 1990 to February 1995, Mr.
Jensen was employed by VISTA Environmental as Vice President and Manager,
VISTA Information Center. Prior to 1990, Mr. Jensen was Vice President of
Irving Trust Company, serving as a manager in the areas of corporate finance
consulting, mergers and acquisitions, marketing research and customer service.

         JAMES MAUCH has been Vice President of Market Development since
February 1995 and, since January 1997, has been responsible for identifying
and developing new business markets for the Company. From February 1992 to
February 1995, Mr. Mauch was employed in various capacities by VISTA
Environmental relating to sales and market development, including Vice
President of Marketing. Prior to February 1992, Mr. Mauch was employed by
Environmental Audit, Inc. as Vice President of Sales and Marketing.

         MARK F. CATONE has been Vice President of Product Development since
November 1996.  Mr. Catone previously served as Vice President of Systems
Development and Product Marketing for National Decision Systems, a San
Diego-based division of Equifax, Inc., Atlanta, GA.  Mr. Catone began with
Equifax in June 1985.

                                      -16-
<PAGE>

(c) COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

         Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers, and persons who
beneficially own more than 10% of the Company's Common Stock, to file with
the Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of Common Stock and other
equity securities of the Company. Executive officers, directors and
greater-than-10% shareholders are required by SEC regulations to furnish the
Company with copies of all Section 16(a) reports they file. To the Company's
knowledge, based solely on review of the copies of such reports furnished to
the Company for the year ended December 31, 1997, the Company believes that
all required Section 16(a) reports were filed in a timely manner.

ITEM 10.  EXECUTIVE COMPENSATION

                   EXECUTIVE COMPENSATION AND OTHER BENEFITS

         The following table sets forth the cash and non-cash compensation
paid or earned (i) during the fiscal years ended December 31, 1997 and 1996
executive officer of the Company who had salary and bonuses which exceeded
$100,000 for the fiscal year ended December 31, 1997.

                          SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                            Annual Compensation
                                              ------------------------------------------------
                                                                                                    Long Term Compensation
                                                                                                            Awards
Name And Principal Position         Year      Salary ($)       Bonus ($)    Other ($)           Securities Underlying Options
---------------------------         ----      ----------       ---------    ---------           -----------------------------
<S>                                 <C>       <C>              <C>          <C>                 <C>
Thomas R. Gay(1)...............     1997        $195,000          --         $11,000(2)                  80,000
    Chief Executive Officer         1996         187,500          --          11,000(2)                    --
                                    1995         169,167          --           8,688(2)                  75,000
E. Stevens Hamilton                 1997         144,000          --             --                     150,000
                                    1996         138,000          --             --                        --
                                    1995(3)        --             --             --                        --
Howard Shuster                      1997         110,000        $10,000          --                        --
                                    1996          28,000          --             --                      50,000
                                    1995(3)        --             --             --                        --
</TABLE>

(1) Mr. Gay became Chief Executive Officer of the Company on February 28,
    1995, concurrent with the VISTA Merger.

(2) Includes an annual car allowance of $6,000 and country club membership
    dues of $5,000.

(3) The Company did not employ Mr. Hamilton and Mr. Shuster during 1995.

                                       -17-
<PAGE>


                AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
                            AND FY-END OPTION VALUES

<TABLE>
<CAPTION>
                                                                        Number of Securities          Value of
                                                                             Underlying             Unexercised
                                                                        Unexercised Options    In-the-Money Options
                                                                             at FY-End               at FY-End

                            Shares Acquired                                 Exercisable/           Exercisable/
         Name               on Exercise (#)      Value Realized ($)        Unexercisable           Unexercisable
         ----               ---------------      ------------------     -------------------   ---------------------
<S>                         <C>                  <C>                    <C>                    <C>
Thomas R. Gay                     ---                   ---                124,269/90,000        $284,654/232,500

E. Stevens Hamilton               ---                   ---                  0/150,000               0/225,000

Howard Shuster                    ---                   ---                16,667/33,333          89,667/179,333
</TABLE>

OPTION GRANTS AND OPTIONS OUTSTANDING

The following table sets forth information with respect to option grants and
fiscal year-end option values for the persons named in the Summary
Compensation Table.

                        OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                  Number of Securities   Percent of Total
                                   Underlying Options     Options Granted
                                       Granted(#)         to Employees in   Exercise or Base
Name                      Year                              Fiscal Year       Price ($/Sh)        Expiration Date
----
<S>                      <C>      <C>                    <C>                <C>                   <C>
Thomas R. Gay             1997            80,000                15%              $5.00               8/28/2007

E. Stevens Hamilton       1997           150,000                29%               4.33               8/28/2007

Howard Shuster            1997            50,000                10%               1.06                9/1/2006

</TABLE>

                                      -18-
<PAGE>

EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS

         GAY AGREEMENT. Concurrent with the closing of the VISTA Merger, the
Company entered into an employment agreement with Mr. Gay, as President and
Chief Executive Officer of the Company. The agreement between the Company and
Mr. Gay provides for (i) an initial base salary of $180,000 for the first
year of employment and a base salary of, $195,000 for the second year of
employment; (ii) a grant of incentive stock options to purchase 75,000 shares
of Common Stock with an exercise price equal to $2.82 per share (the fair
market value of one share of the Common Stock on the date of grant) which
options vest in two equal installments on the first and second anniversary of
the date of grant and remain exercisable for a period of ten years; (iii) a
bonus in the range from $60,000 to $100,000 based upon the achievement of
certain performance criteria to be established by the Board; (iv) an
automobile allowance of $500 per month; and (v) a country club membership
allowance of up to $5,000 per year. The initial term of this agreement
expired on February 28, 1997.

         The terms of the agreement between the Company and Mr. Gay also
provided that if Mr. Gay is terminated by the Company "other than for cause"
(as such phrase is defined in the agreement), then Mr. Gay would be entitled
to his base salary and benefits for the remainder of the term of the
agreement; provided, however, that such amount may not be less than an amount
equal to one half of the base salary paid to Mr. Gay in the prior calendar
year. In the event of a "change in control" of the Company (as defined in the
agreement), (i) all unvested options granted to Mr. Gay under the agreement
immediately vest and become fully exercisable; and (ii) the agreement
automatically terminates and Mr. Gay is entitled to receive all accrued
salary due and owing plus salary for a period of either one year or until the
existing term of the agreement expires, whichever is longer. The agreement
also prohibits disclosure of confidential information to anyone outside of
the Company both during and after employment and prohibits competition with
the Company and the solicitation of customers and employees of the Company
for two years after termination of employment.

         On February 28, 1997 a new agreement was completed which continued
the terms of the original agreement through December 31, 1997 with the
following additions: (i) a grant of incentive stock options to purchase
15,000 shares of Common Stock with an exercise price equal to $1.00 per share
and (ii) if Mr. Gay is terminated by the Company "other than for cause" (as
such phrase is defined in the agreement), then Mr. Gay would be entitled to
his base salary and benefits for six months following the termination.

         In September 1997 the Board of Directors extended Mr. Gay's
employment contract until December 31, 1998 with essentially the same terms
as the original contract except for an increase in salary to $210,000.

         CHANGE IN CONTROL ARRANGEMENTS. In addition to the terms of Mr.
Gay's employment agreement relating to changes in control of the Company, the
Company's 1995 Stock Incentive Plan (the "1995 Plan") provides that, unless
otherwise provided in an agreement evidencing an option granted under the
1995 Plan, in the event of a "change in control" of the Company (as defined
below), all outstanding options will become immediately exercisable in full
and will remain exercisable for the remainder of their terms. In addition, in
the event of such a change in control, the committee administering the 1995
Plan, in its sole discretion, may provide that some or all participants
holding outstanding options will receive for each share of Common Stock
subject to such options cash in an amount equal to the excess of the fair
market value of such shares immediately prior to the effective date of a
change in control over the exercise price per share of such options.

         For purposes of the 1995 Plan, a "change in control" of the Company
will be deemed to have occurred, among other things, upon (i) the sale or
other disposition of substantially all of the assets of the Company to a
person not controlled by the Company, (ii) the approval by the Company's
shareholders of a plan or proposal for the liquidation or dissolution of the
Company, (iii) a merger or consolidation to which the Company is a party if
the Company's shareholders immediately prior to the merger or consolidation
beneficially own, immediately after the merger or consolidation, securities
of the surviving corporation representing 50% or less of the combined voting
power of the surviving corporation's then outstanding securities ordinarily
having the right to vote at elections of directors, (iv) the Incumbent
Directors (defined as the directors in office as of the effective date of the
1995 Plan or any persons who subsequently become directors and whose election
or nomination was approved by at least a majority of Incumbent Directors)
cease for any reason to constitute at least a majority of the Board; or (v) a
change in control of the Company of a nature that would be required to be
reported pursuant to Section 13 or 15(d) of the Exchange Act.

DIRECTOR COMPENSATION

         DIRECTORS' FEES. The Company is obligated to pay each director who
is not an employee of the Company $200 for each Board meeting and committee
meeting attended and reimburses each director for out-of-pocket expenses when
attending Board meetings or otherwise engaging in Company business.

                                     -19-
<PAGE>

         AUTOMATIC OPTION GRANT. Pursuant to the 1995 Plan, each non-employee
director serving on the Board receives an automatic grant of options to
purchase 5,000 shares of Common Stock on January 1 each year the 1995 Plan is
in effect. If a non-employee director is elected or appointed to serve as a
director following such January 1 date, such non-employee director receives
an automatic grant of an option to purchase (i) 2,500 shares of Common Stock
if such non-employee director is elected or appointed after June 30 in any
year in which the 1995 Plan is in effect, or (ii) 5,000 shares of Common
Stock if such non-employee director is elected or appointed prior to July 1
in any year in which the 1995 Plan is in effect.

         The exercise price per share for such options is equal to the fair
market value of one share of Common Stock on the date the option is granted.
Options automatically granted to non-employee directors under the 1995 Plan
become exercisable six months following the date of grant and expire five
years from the date of grant. In the event a non-employee director's service
as a director of the Company is terminated by reason of death or Disability
(as defined in the 1995 Plan) all such outstanding options then held by the
non-employee director will become immediately exercisable in full and will
remain exercisable for a period of one year thereafter (but in no event after
the expiration of any such option). In the event that a non-employee
director's service as a director of the Company is terminated for any other
reason, all such options then held by the non-employee director will remain
exercisable for a period of three months thereafter to the extent exercisable
as of the date of termination (but in no event after the expiration of any
such option).

                                      -20-
<PAGE>

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

                    COMMON STOCK AND COMMON STOCK EQUIVALENTS


         The following table sets forth information regarding the beneficial
ownership of Common Stock and Common Stock Equivalents of the Company as of
March 30, 1998 (a) by each shareholder who is known by the Company to own
beneficially more than 5% of the outstanding Common Stock and Common Stock
Equivalents or the combined total voting power of all classes of capital
stock of the Company on a fully diluted, as converted basis, (b) by each
director, (c) by the Chief Executive Officer and the two other executive
officers who were paid over $100,000 during 1997 (the "Designated Executive
Officers"), and (d) by all executive officers and directors of the Company as
a group.

<TABLE>
<CAPTION>

                                                                NUMBER OF                PERCENT OF CLASS
                                                           SHARES BENEFICIALLY               OWNED(2)
NAME                                                            OWNED(1)
----------------------------------------------------- ------------------------------ --------------------------
<S>                                                   <C>                            <C>
Paul S. Bachow......................................           1,972,270(3)                    17.2%
         3 Bala Plaza East
         Suite 502
         Bala Cynwyd, PA 19004

Paul S. Bachow Co-Investment Fund, L.P..............           1,398,897(4)                    12.7%
         3 Bala Plaza East
         Suite 502
         Bala Cynwyd, PA 19004

Robert Boscamp......................................               7,500(5)                       *


Century Capital Partners, L.P.......................             594,075(6)                     5.9%
         Century Capital Management
         One Liberty Square
         Boston, MA 02109

First Century Partnership III.......................             817,970(7)                     7.9%
         One Palmer Square, Suite 425
         Princeton, NJ 08542

Richard J. Freeman..................................             594,075(8)                     5.9%
         Century Capital Management
         One Liberty Square
         Boston, MA 02109

Earl Gallegos.......................................               5,000(9)                       *
         4785 Nomad Drive
         Woodland Hills, CA  91364

Thomas R. Gay.......................................           1,222,936(10)                   11.7%
         5060 Shoreham Place
         Suite 300
         San Diego, CA 92122

</TABLE>

                                     -21-

<PAGE>

<TABLE>
<CAPTION>

                                                                NUMBER OF              PERCENT OF CLASS
                                                           SHARES BENEFICIALLY             OWNED(2)
NAME                                                            OWNED(1)
----------------------------------------------------- ------------------------------ --------------------------
<S>                                                   <C>                            <C>
E. Stevens Hamilton.................................           150,000(11)                     1.5%
         5060 Shoreham Place, #300
         San Diego, CA  92122

Hudson Trust........................................           545,466(12)                     5.4%
         c/o Pyrenees Management Co., Inc.
         Suite 445, The Office Center
         666 Plainsboro Road
         Plainsboro, NJ 08536

Martin F. Kahn......................................           115,893(13)                     1.2%
         Cadence Information Associates
         767 Fifth Avenue
         43rd Floor
         New York, NY 10153

Craig MacNab........................................         1,062,307(14)                    10.5%
         500 Church St., #200
         Nashville, TN 37219

Rho Management Partners L.P.........................           876,064(15)                     8.3%
         767 Fifth Avenue
         New York, NY 10153

Patrick A. Rivelli..................................           873,685(16)                     8.3%
         Three Forest Plaza, Suite 1300
         12221 Merit Dr.
         Dallas, TX 75251

Jay D. Seid.........................................         1,398,897(17)                    12.7%
         3 Bala Plaza East
         Suite 502
         Bala Cynwyd, PA 19004

Howard Shuster......................................            60,000(18)                       *
         5060 Shoreham Place, #300
         San Diego, CA  92122

SIRROM Capital Corporation..........................         1,062,307(19)                    10.5%
         500 Church St., #200
         Nashville, TN 37219

Sunwestern Managers, Inc............................           867,351(20)                     8.8%
         Three Forest Plaza
         Suite 1300
         12221 Merit Drive
         Dallas, TX 75251

</TABLE>

                                     -22-

<PAGE>

<TABLE>
<CAPTION>

                                                                NUMBER OF              PERCENT OF CLASS
                                                           SHARES BENEFICIALLY             OWNED(2)
NAME                                                            OWNED(1)
----------------------------------------------------- ------------------------------ --------------------------
<S>                                                   <C>                            <C>

All current directors and executive officers as a          3,908,720(8)(9)(10)(11)             32.8%
group (11 persons)..................................      (12)(13)(18)(20)(21)(22)

</TABLE>

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

*Less than l%.

(1)      Unless otherwise noted, all of the shares shown are held by individuals
         or entities possessing sole voting and investment power with respect to
         such shares. These numbers include shares deemed beneficially owned by
         virtue of the right of a person to acquire them within 60 days, whether
         by the exercise of options or warrants or the conversion of Preferred
         Stock into Common Stock.

(2)      The "Percent of Class Owned" is calculated by dividing the "Number of
         Shares Beneficially Owned" by the sum of (i) the total outstanding
         shares of Common Stock of the Company and (ii) shares of Common Stock
         that such person has the right to acquire within 60 days, whether by
         the exercise of options or warrants or the conversion of Preferred
         Stock into Common Stock.

(3)      Includes 1,398,897 shares of Common Stock beneficially owned by Paul S.
         Bachow Co-Investment Fund, L.P., 182,225 shares of Common Stock owned
         by Mr. Bachow, 332,324 shares of Common Stock Mr. Bachow has the right
         to acquire upon the conversion of Series B Preferred and 58,824 shares
         of Common Stock Mr. Bachow has the right to acquire upon the exercise
         of options.

(4)      Includes 726,976 shares of Common Stock the Paul S. Bachow
         Co-Investment Fund, L.P. has the right to acquire upon the conversion
         Series B Preferred, 495,551 shares of Common Stock the Paul S. Bachow
         Co-Investment Fund, L.P. has the right to acquire upon conversion of
         Series D Preferred, 22,693 the Paul S. Bachow Co-Investment Fund, L.P.
         has the right to acquire upon the exercise of warrants and 153,677
         shares of Common Stock the Paul S. Bachow Co-Investment Fund, L.P. has
         the right to acquire upon the exercise of options.

(5)      Includes 7,500 shares of Common Stock Mr. Boscamp has the right to
         acquire upon exercise of options.

(6)      Includes 104,655 shares of Common Stock owned by Century Capital
         Partners, L.P., 12,500 shares Century Capital Partners, L.P. has
         the right to acquire upon the exercise of options, 80,477 shares
         Century Capital Partners, L.P. has the right to acquire upon the
         exercise of warrants and 396,443 shares Century Capital Partners,
         L.P. has the right to acquire upon conversion of Series D Preferred.

(7)      Includes 97,458 shares of Common Stock owned by First Century
         Partnership III, 19,536 shares of Common Stock First Century
         Partnership III has the right to acquire upon exercise and conversion
         of warrants to purchase Series C Preferred and 700,976 shares of Common
         Stock First Century Partnership III has the right to acquire upon the
         conversion of Series C Preferred.

(8)      Includes 594,075 shares of Common Stock beneficially owned by
         Century Capital Partners, L.P.. Mr. Freeman disclaims beneficial
         ownership of such shares.  Mr. Freeman is a Vice President of
         Century Capital Partners, L.P. and has investment power with
         respect to the shares held.

(9)      Includes 5,000 shares of Common Stock which Mr. Gallegos has the
         right to acquire upon the exercise of options.

(10)     Includes 85,769 shares of Common Stock held by Mr. Gay's children, but
         as to which he disclaims any beneficial interest, 776,065 shares of
         Common Stock owned by Mr. Gay, 229,769 shares of Common Stock that Mr.
         Gay has the right to acquire upon the exercise of options and 131,333
         shares of Common Stock that Mr. Gay has the right to acquire upon the
         exercise of warrants.

                                     -23-

<PAGE>

(11)     Includes 150,000 shares of Common Stock Mr. Hamilton has the right
         to acquire upon exercise of options.

(12)     Includes 26,663 shares of Common Stock owned by Hudson Trust, 502,495
         shares of Common Stock that Hudson Trust has the right to acquire upon
         the conversion of Series C Preferred and 16,308 shares of Common Stock
         that Hudson Trust has the right to acquire upon the exercise of
         warrants.

(13)     Includes 436 shares of Common Stock held by Cadence Management, L.P.,
         of which Mr. Kahn serves as the sole general partner, and 115,457
         shares of Common Stock that Cadence Information Associates, LLC of
         which Mr. Kahn is a Managing Member has the right to acquire upon
         exercise of options.

(14)     Includes 1,062,307 shares of Common Stock beneficially owned by Sirrom
         Capital Corporation. Mr. MacNab disclaims beneficial ownership of such
         shares. Mr. MacNab is President of Tandem Capital, a wholly owned
         subsidiary of Sirrom Capital Corporation.

(15)     Includes 428,282 of Common Stock beneficially owned by Rho Management
         Trust I (formerly Gibraltar Trust) and 447,782 share of Common Stock
         beneficially owned by Rho Management Trust II (formerly U.S. Trust).
         Rho Management Partners L.P. exercises sole voting and investment
         control of shares owned by Rho Management Trust I and Rho Management
         Trust III.

(16)     Includes 6,334 shares of Common Stock held jointly by Mr. Rivelli and
         his wife. Also includes 867,351 shares of Common Stock beneficially
         owned by Sunwestern Managers, Inc.. Mr. Rivelli and James Silcock are
         the general partners of Sunwestern Investment Fund III, Sunwestern
         Cayman 1988 Partners and Mapleleaf Capital, Ltd., and are equal
         shareholders of Sunwestern Managers, Inc., the attorney in fact for
         Sunwestern Investment Fund III, Sunwestern Cayman 1988 Partners and
         Mapleleaf Capital, Ltd., having the power to vote and direct the voting
         of the shares held. Pursuant to Rule 13d-3 of the Securities Exchange
         Act of 1934, Mr. Rivelli and Mr. Silcock may be deemed to share
         beneficial ownership with respect to the shares held by for Sunwestern
         Investment Fund III, Sunwestern Cayman 1988 Partners and Mapleleaf
         Capital, Ltd.; however, Mr. Rivelli and Mr. Silcock disclaim beneficial
         ownership except to the extent of their pecuniary interest therein.

(17)     Includes 1,398,897 shares of Common Stock beneficially owned by the
         Paul S. Bachow Co-Investment Fund, L.P.; however, Mr. Seid disclaims
         beneficial ownership of such shares. Mr. Seid is a Managing Director of
         Bachow & Associates and has investment power with respect to the shares
         held by the Paul S. Bachow Co-Investment Fund, L.P.

(18)     Includes 60,000 shares of Common Stock Mr. Shuster has the right to
         acquire upon the exercise of options.

(19)     Includes 579,016 shares of Common Stock beneficially owned by SIRROM
         Capital Corporation, 28,791 shares of Common Stock SIRROM Capital
         Corporation has the right to acquire upon exercise of warrants and
         454,500 shares of Common Stock SIRROM Capital Corporation has the right
         to acquire upon conversion of Series E Preferred Stock.

(20)     Includes 294,741 shares of Common Stock beneficially owned by Mapleleaf
         Capital, Ltd., 297,554 shares of Common Stock beneficially owned by
         Sunwestern Cayman 1988 Partners and 275,056 shares of Common Stock
         beneficially owned by Sunwestern Investment Fund III.

(21)     Includes 92,296 shares of Common Stock owned by executive officers of
         the Company, 274,913 shares of Common Stock that executive officers
         have the right to acquire upon the exercise of options and 5,519 shares
         of Common Stock that executive officers have the right to acquire upon
         the exercise of warrants.

                                     -24-

<PAGE>

SERIES B PREFERRED

         The following table sets forth information regarding the beneficial
ownership of the Company's Series B Preferred as of March 30, 1998 (a) by
each shareholder who is known by the Company to own beneficially more than 5%
of the outstanding Series B Preferred, (b) by each director, (c) by the
Designated Executive Officers, and (d) by all executive officers and
directors of the Company as a group.

<TABLE>
<CAPTION>

                                                                NUMBER OF
                                                           SHARES BENEFICIALLY         PERCENT OF CLASS
NAME(1)                                                          OWNED(2)                   OWNED(3)
-----------------------------------------------------      -------------------         ----------------
<S>                                                        <C>                         <C>
Paul S. Bachow......................................            200,000(4)                   100%
         3 Bala Plaza East, Suite 502
         Bala Cynwyd, PA 19004

Paul S. Bachow Co-Investment Fund, L.P..............            137,256                     68.6%
         3 Bala Plaza East, Suite 502
         Bala Cynwyd, PA 19004

Jay D. Seid.........................................            137,256(5)                  68.6%
     3 Bala Plaza East, Suite 502
     Bala Cynwyd, PA  19004

All current directors and executive officers as a
group (9 persons)...................................            137,256(5)                  68.6%
</TABLE>

------------------------------------
*Less than l%.

(1)      Unless listed in this table, no director or Designated Executive
         Officer has any beneficial ownership of shares of Series B Preferred.

(2)      Unless otherwise noted, all of the shares shown are held by individuals
         or entities possessing sole voting and investment power with respect to
         such shares. These numbers include shares deemed beneficially owned by
         virtue of the right of a person to acquire them within 60 days, whether
         by the exercise of options or warrants.

(3)      The "Percent of Class Owned" is calculated by dividing the "Number of
         Shares Beneficially Owned" by the sum of (i) the total outstanding
         shares of Series B Preferred and (ii) shares of Series B Preferred that
         such person has the right to acquire within 60 days by the exercise of
         options or warrants.

(4)      Includes 137,256 shares of Series B Preferred beneficially owned by
         the Paul S. Bachow Co-Investment Fund, L.P..

(5)      Includes 137,256 shares of Series B Preferred beneficially owned by the
         Paul S. Bachow Co-Investment Fund, L.P.; however, Mr. Seid disclaims
         beneficial ownership of such shares. Mr. Seid is a Vice President of
         Bachow & Associates and has investment power with respect to the shares
         held by the Paul S. Bachow Co-Investment Fund, L.P..

SERIES C PREFERRED

         The following table sets forth information regarding the beneficial
ownership of the Company's Series C Preferred as of March 30, 1998 (a) by each
shareholder who is known by the Company to own beneficially more than 5% of the
outstanding Series C Preferred, (b) by each director, (c) by the Designated
Executive Officers, and (d) by all executive officers and directors of the
Company as a group.

                                  -25-

<PAGE>

<TABLE>
<CAPTION>

                                                                NUMBER OF
                                                           SHARES BENEFICIALLY         PERCENT OF CLASS
NAME(1)                                                          OWNED(2)                   OWNED(3)
-----------------------------------------------------      -------------------         ----------------
<S>                                                        <C>                         <C>
First Century Partnership III........................           136,036(4)                    33.9%
         One Palmer Square, Suite 425
         Princeton, NJ 08542

Hudson Trust ........................................           111,181(5)                    26.9%
         c/o Pyrenees Management Co., Inc.
         Suite 445, The Office Center
         666 Plainsboro Road
         Plainsboro, NJ 08536

Cox Enterprises, Inc., Pension Plan.................             30,740(6)                     7.7%
         1400 Lake Hearn Drive
         Atlanta, GA 30319

Rho Management Trust III (formerly U.S. Trust)......             90,133(7)                    22.4%
         c/o Rho Management Company
         767 Fifth Avenue
         New York, NY 10153

All current directors and executive
officers as a group (11 persons)....................                  0                          0%
</TABLE>

------------------------------------
*Less than 1%.

(1)      Unless listed in this table, no director or Designated Executive
         Officer has any beneficial ownership of shares of Series C Preferred.

(2)      Unless otherwise noted, all of the shares shown are held by individuals
         or entities possessing sole voting and investment power with respect to
         such shares. These numbers include shares deemed beneficially owned by
         virtue of the right of a person to acquire them within 60 days, whether
         by the exercise of option or warrants.

(3)      The "Percent of Class Owned" is calculated by dividing the "Number of
         Shares Beneficially Owned" by the sum of (i) the total outstanding
         shares of Series C Preferred and (ii) shares of Series C Preferred that
         such person has the right to acquire within 60 days by the exercise of
         options or warrants.

(4)      Includes 132,347 shares of Series C Preferred held of record by First
         Century Partnership III and 3,689 shares of Series C Preferred that
         First Century Partnership III has the right to acquire upon the
         exercise of warrants.

(5)      Includes 94,873 shares of Series C Preferred held of record by the
         Hudson Trust and 16,308 shares of Series C Preferred that Hudson Trust
         has the right to acquire upon the exercise of warrants.

(6)      Includes 29,907 shares of Series C Preferred held of record by Cox
         Enterprises, Inc., Pension Plan and 833 shares of Series C Preferred
         that Cox Enterprises, Inc., Pension Plan has the right to acquire upon
         the exercise of warrants.

(7)      Includes 84,543 shares of Series C Preferred held of record by Rho
         Management Trust III and 5,590 shares of Series C Preferred that Rho
         Management Trust III has the right to acquire upon the exercise of
         warrants.

                                     -26-

<PAGE>

SERIES D PREFERRED

         The following table sets forth information regarding the beneficial
ownership of the Company's Series D Preferred as of March 30, 1998 (a) by each
shareholder who is known by the Company to own beneficially more than 5% of the
outstanding Series D Preferred, (b) by each director, (c) by each Designated
Executive Officer, and (d) by all executive officers and directors of the
Company as a group.

<TABLE>
<CAPTION>

                                                        NUMBER OF
                                                   SHARES BENEFICIALLY      PERCENT OF CLASS
NAME(1)                                                  OWNED(2)               OWNED(3)
----------------------------------------------     -------------------      ----------------
<S>                                                <C>                      <C>
Paul S. Bachow................................           93,562(4)               50.0%
         3 Bala Plaza East, Suite 502
         Bala Cynwyd, PA 19004

Paul S. Bachow Co-Investment Fund, L.P........           64,210                  34.3%
         3 Bala Plaza East, Suite 502
         Bala Cynwyd, PA 19004

Century Capital Partners, L.P.................           74,850                  40.0%
         One Liberty Square
         Boston, MA 02109

Cox Enterprises, Inc., Pension Plan...........           18,712                  10.0%
         1400 Lake Hearn Drive
         Atlanta, GA 30319

Jay D. Seid...................................           64,210(5)               34.3%
     3 Bala Plaza East, Suite 502
     Bala Cynwyd, PA  19004

All current directors and executive officers
as a group (11 persons).......................           64,210(5)               34.3%
</TABLE>

------------------------------------
*Less than 1%.

(1)      Unless listed in this table, no director or Designated Executive
         Officer has any beneficial ownership of shares of Series D Preferred.

(2)      Unless otherwise noted, all of the shares shown are held by individuals
         or entities possessing sole voting and investment power with respect to
         such shares. These numbers include shares deemed beneficially owned by
         virtue of the right of a person to acquire them within 60 days, whether
         by the exercise of options or warrants.

(3)      The "Percent of Class Owned" is calculated by dividing the "Number of
         Shares Beneficially Owned" by the sum of (i) the total outstanding
         shares of Series D Preferred and (ii) shares of Series D Preferred that
         such person has the right to acquire within 60 days, whether by the
         exercise of options or warrants.

(4)      Includes 64,210 shares of Series D Preferred beneficially owned by the
         Paul S. Bachow Co-Investment Fund, L.P.

(5)      Includes 64,210 shares of Series D Preferred beneficially owned by the
         Paul S. Bachow Co-Investment Fund, L.P.. Mr. Seid is a Vice President
         of Bachow & Associates and has investment power with respect to the
         shares held by the Paul S. Bachow Co-Investment Fund, L.P.

                                 -27-

<PAGE>

         SERIES E PREFERRED

         The following table sets forth information regarding the beneficial
ownership of the Company's Series E Preferred as of March 30, 1998 (a) by
each shareholder who is known by the Company to own beneficially more than 5%
of the outstanding Series E Preferred, (b) by each director, (c) by the
Designated Executive Officers, and (d) by all executive officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
                                                           NUMBER OF
                                                       SHARES BENEFICIALLY      PERCENT OF CLASS
NAME(1)                                                      OWNED(2)               OWNED(3)
-------------------------------------------------     ----------------------    ----------------
<S>                                                   <C>                       <C>
Sirrom Capital Corporation                                    2,500                100.0%
500 Church Street, #200
Nashville, TN  37219

Craig MacNab                                                 2,500(4)              100.0%
500 Church Street, #200
Nashville, TN  37219

All current directors and executive officers                 2,500(4)              100.0%
as a group (11 persons)..........................
</TABLE>

------------------------------------
*Less than 1%.

(1)      Unless listed in this table, no director or Designated Executive
         Officer has any beneficial ownership of shares of Series E Preferred.

(2)      Unless otherwise noted, all of the shares shown are held by individuals
         or entities possessing sole voting and investment power with respect to
         such shares. These numbers include shares deemed beneficially owned by
         virtue of the right of a person to acquire them within 60 days, whether
         by the exercise of options or warrants.

(3)      The "Percent of Class Owned" is calculated by dividing the "Number of
         Shares Beneficially Owned" by the sum of (i) the total outstanding
         shares of Series E Preferred and (ii) shares of Series E Preferred that
         such person has the right to acquire within 60 days, whether by the
         exercise of options or warrants.

(4)      Includes 2,500 shares owned by Sirrom Capital Corporation ("Sirrom").
         Mr. MacNab is the President of Tandem Capital, a wholly-owned
         subsidiary of Sirrom. Mr. MacNab disclaims beneficial ownership of the
         shares owned by Sirrom.

                                  -28-

<PAGE>

SERIES F PREFERRED

         The following table sets forth information regarding the beneficial
ownership of the Company's Series F Preferred as of March 30, 1998 (a) by each
shareholder who is known by the Company to own beneficially more than 5% of the
outstanding Series F Preferred, (b) by each director, (c) by the Designated
Executive Officers, and (d) by all executive officers and directors of the
Company as a group.

<TABLE>
<CAPTION>
                                                           NUMBER OF
                                                       SHARES BENEFICIALLY      PERCENT OF CLASS
NAME(1)                                                      OWNED(2)               OWNED(3)
-------------------------------------------------     ----------------------    ----------------
<S>                                                   <C>                       <C>

Sirrom Capital Corporation                                    2,500                   100.0%
500 Church Street, #200
Nashville, TN  37219

Craig MacNab                                                  2,500(4)                100.0%
500 Church Street, #200
Nashville, TN  37219

All current directors and executive officers                  2,500(4)                100.0%
as a group (11 persons)........................
</TABLE>

------------------------------------
*Less than 1%.

(1)      Unless listed in this table, no director or Designated Executive
         Officer has any beneficial ownership of shares of Series F Preferred.

(2)      Unless otherwise noted, all of the shares shown are held by individuals
         or entities possessing sole voting and investment power with respect to
         such shares. These numbers include shares deemed beneficially owned by
         virtue of the right of a person to acquire them within 60 days, whether
         by the exercise of options or warrants.

(3)      The "Percent of Class Owned" is calculated by dividing the "Number of
         Shares Beneficially Owned" by the sum of (i) the total outstanding
         shares of Series F Preferred and (ii) shares of Series F Preferred that
         such person has the right to acquire within 60 days, whether by the
         exercise of options or warrants.

(4)      Includes 2,500 shares owned by Sirrom Capital Corporation ("Sirrom").
         Mr. MacNab is the President of Tandem Capital, a wholly-owned
         subsidiary of Sirrom. Mr. MacNab disclaims beneficial ownership of the
         shares owned by Sirrom.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In March and April 1997 the Company issued $700,000 of Senior
Subordinated Promissory Notes (the "1997 Senior Notes"), bearing interest at 16%
and due in March and April 1996. The 1997 Senior Notes were issued together with
warrants to purchase a number of shares of Common Stock equal to 100% of the
amount of the 1997 Senior Notes based upon an exercise price of 125% of the
fair-market value of the Common Stock twenty-one days prior to funding. Jay D
Seid, Chairman of the Board of Directors, Thomas R. Gay, Chief Executive Officer
and Director of the Company, Martin F. Kahn, Richard J. Freeman, and Robert J.
Moeller, directors of the Company, participated in this funding in the amounts
of $45,000, $50,000, $33,000, $100,000, and $5,000 respectively pursuant to the
1997 Senior Notes. The Senior Notes were all converted to Common Stock during
1997 pursuant to the beneficial conversion feature whereby the principal and
accrued interest were convertible into Common Stock at a price equal to 70
percent of the 21 day trailing average of the stock price.

         In October 1997 the Board of Directors of the Company approved the
extension of options to purchase 128,677 shares of Common Stock held by PSB
Co. Investment Fund and options to purchase 58,824 shares of Common Stock
held by Paul S. Bachow from December 31, 1997 to December 31, 1998.

                                  -29-

<PAGE>

                         PART IV

ITEM 13.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS

         (1)  FINANCIAL STATEMENTS OF REGISTRANT

         The following items are included in this Annual Report on Form 10-KSB
(page numbers refer to pages in this Annual Report on Form 10-KSB):
<TABLE>
<CAPTION>

         CONSOLIDATED FINANCIAL STATEMENTS                                                    PAGE
         ---------------------------------                                                    ----
          <S>                                                                          <C>
          Index to Consolidated Financial Statements.................................           31
          Report of Independent Accountants..........................................          F-1
          Consolidated Balance Sheets................................................   F-2 to F-3
          Consolidated Statements of Operations......................................          F-4
          Consolidated Statements of Changes in Stockholders' Equity.................          F-5
          Consolidated Statements of Cash Flows .....................................   F-6 to F-7
          Notes to Consolidated Financial Statements.................................  F-8 to F-26
</TABLE>

          (2)  FINANCIAL STATEMENT SCHEDULES

         Financial statement schedules are omitted because of the absence of the
conditions under which they are required or because the information required is
included in the financial statements or notes thereto.

         (3)  EXHIBITS.

         The exhibits to this Annual Report on Form 10-KSB are listed in the
Exhibit Index on pages E-1 to E-6 of this Report.

         A copy of any of the exhibits listed or referred to above will be
furnished at a reasonable cost to any person who was a shareholder of the
Company as of December 31, 1997, upon receipt from any such person of a written
request for any such exhibit. Such request should be sent to VISTA Information
Solutions, Inc., 5060 Shoreham Place, #300, San Diego, CA 92122 (Attn: Chief
Financial Officer).

(b)  REPORTS ON FORM 8-K.

         None

(c)  EXHIBITS.

         The response to this portion of Item 14 is included as a separate
section of this Annual Report on Form 10-KSB.


                             -30-

<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

                                                                          Page

<S>                                                                 <C>
Independent Accountant's Report                                            F-1


Consolidated Balance Sheets                                         F-2 to F-3


Consolidated Statements of Operations                                      F-4


Consolidated Statements of Changes in Stockholders' Equity                 F-5


Consolidated Statements of Cash Flows                               F-6 to F-7


Notes to Consolidated Financial Statements                         F-8 to F-26
</TABLE>

                                     -31-

<PAGE>

                       INDEPENDENT ACCOUNTANT'S REPORT


To the Board of Directors
VISTA Information Solutions, Inc.
San Diego, California

         We have audited the accompanying consolidated balance sheets of VISTA
Information Solutions, Inc. and subsidiary as of December 31, 1997 and 1996, and
the related consolidated statements of operations, changes in 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 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 accounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects the financial position of VISTA
Information Solutions, Inc. and subsidiary as of December 31, 1997 and 1996 and
the results of their operations and their cash flows for the years then ended,
in conformity with generally accepted accounting principles.




San Diego, California
March 24, 1998

                                     F-1

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>

ASSETS (Note 4)                                                                        1997               1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                 <C>
Current Assets
  Cash                                                                          $      341,781      $       56,277
  Trade accounts receivable, less allowance for doubtful
    accounts of $191,500 and $284,000, respectively                                  2,589,466           1,211,933
  Prepaid expenses                                                                     272,030             326,994
                                                                                -----------------------------------
Total current assets                                                                 3,203,277           1,595,204
                                                                                -----------------------------------

Equipment, furniture and purchased software, at cost (Note 7)
  Equipment and furniture                                                            3,767,826           2,906,056
  Purchased software                                                                   439,884             264,575
                                                                                -----------------------------------
                                                                                     4,207,710           3,170,631
  Less accumulated depreciation and amortization                                    (2,810,435)         (2,160,506)
                                                                                -----------------------------------
Net equipment, furniture and purchased software                                      1,397,275           1,010,125
                                                                                -----------------------------------

Acquired technology and environmental databases and other
  intangible assets, less accumulated amortization of $11,728,609
  and $7,330,904, respectively (Note 2)                                                593,200           4,665,120

Deposits and other assets                                                              185,134              30,793
                                                                                -----------------------------------

                                                                                $    5,378,886      $    7,301,242
                                                                                -----------------------------------
                                                                                -----------------------------------
</TABLE>

See Notes to Consolidated Financial Statements.

                                     F-2

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS (CONTINUED)
DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY                                                     1997               1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                 <C>
Current Liabilities
  Note payable to bank (Note 4)                                                 $         -          $     601,316
  Current maturities of long-term obligations (Note 5)                                  391,872            945,882
  Accounts payable                                                                      497,744            979,949
  Accrued development costs (Note 6)                                                      -                487,500
  Accrued interest, current maturities                                                    -                 68,684
  Deferred revenue                                                                      243,967            122,000
  Other current liabilities (Note 3)                                                    426,323            299,449
                                                                                ----------------------------------
Total current liabilities                                                             1,559,906          3,504,780
                                                                                ----------------------------------

Long-term obligations, less current maturities (Note 5)                                 471,196          2,948,640
Accrued interest                                                                          -                336,016
                                                                                ----------------------------------
                                                                                        471,196          3,284,656
                                                                                ----------------------------------
Commitments and contingencies (Note 7)

Stockholders' Equity (Notes 1, 8 and 9)
  Preferred stock, Series B convertible, par value $.01;
    liquidation value $3,000,000, authorized 200,000 shares;
    200,000 shares issued and outstanding                                                 2,000              2,000
  Preferred stock, Series C convertible, par value $.01;
    liquidation value $6,279,398, authorized 670,000 shares;
     issued and outstanding 1997; 375,607 and 1996; 589,304 shares                        3,756              5,893
  Preferred stock, Series D convertible, par value $.01;
    liquidation value $2,499,977, authorized 240,000 shares;
    187,124 shares issued and outstanding                                                 1,871              1,871
  Preferred stock, Series E convertible, par value $.01;
    liquidation value $2,500,000, authorized,
    issued and outstanding 1997; 2,500 shares                                                25                -
  Preferred stock, Series F convertible, par value $.01;
    liquidation value $2,500,000, authorized
    issued and outstanding 1997; 2,500 shares                                                25                -
  Preferred stock, undesignated series, 885,000 shares
    authorized, none issued
  Common stock, par value $.01; authorized 43,000,000 shares;                             -                    -
    issued and outstanding 1997; 9,440,956 and 1996; 6,142,826 shares                   188,819            122,857
  Additional paid-in capital                                                         37,197,769         28,068,560
  Accumulated deficit                                                               (34,046,481)       (27,689,375)
                                                                                 ----------------------------------
                                                                                      3,347,784            511,806
                                                                                -----------------------------------

                                                                                $     5,378,886     $    7,301,242
                                                                                -----------------------------------
                                                                                -----------------------------------
</TABLE>

                                     F-3

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>

                                                                                        1997               1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                 <C>
Revenues (Notes 6 and 10)                                                       $    10,391,453     $    8,387,052
Cost of revenues                                                                      2,317,982          2,574,348
                                                                                -----------------------------------
Gross margin                                                                          8,073,471          5,812,704

Operating expenses:
  Selling, general and administrative                                                 6,216,965          6,003,163
  Research and development                                                              918,964            820,942
  Depreciation and amortization, including impairment loss
    on acquired technology (Note 2)                                                   5,047,746          4,586,572
                                                                                -----------------------------------
                                                                                     12,183,675         11,410,677
                                                                                -----------------------------------
Operating loss                                                                       (4,110,204)        (5,597,973)

Other (expense) income:
  Interest expense                                                                   (1,465,711)          (910,143)
  Other (expense) income                                                                (20,585)             9,404
                                                                                -----------------------------------
                                                                                     (1,486,296)          (900,739)
                                                                                -----------------------------------

Net (loss)                                                                      $    (5,596,500)    $   (6,498,712)

Preferred stock dividends (Note 8)                                                     (200,000)            -
Accretion of convertible preferred stock (Note 8)                                      (560,606)            -
                                                                                -----------------------------------

NET (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS                                  $    (6,357,106)    $   (6,498,712)
                                                                                -----------------------------------
                                                                                -----------------------------------

Basic and diluted (loss) per common share                                       $         (0.87)    $        (1.12)
                                                                                -----------------------------------
                                                                                -----------------------------------

Weighted average common shares outstanding                                            7,328,363          5,761,137
                                                                                -----------------------------------
                                                                                -----------------------------------
</TABLE>

See Notes to Consolidated Financial Statements.

                                     F-4

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>

                                                      Preferred        Common        Additional
                                                        Stock           Stock          Paid-in        Accumulated
                                                       (Note 8)       (Note 9)         Capital          Deficit           Total
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>            <C>            <C>              <C>             <C>
Balance, December 31, 1995                            $  10,310      $  109,898     $  27,097,419    $ (21,190,663)  $  6,026,964
  Issuance of warrants (Note 5)                              -              -             697,180           -             697,180
  Exercise of incentive stock options (Note 9)               -            4,736            95,124           -              99,860
  Conversion of debentures (Note 5)                          -            2,759           183,755           -             186,514
  Conversion of Series C
    preferred stock (Note 8)                               (546)          5,464            (4,918)          -              -
  Net (loss)                                                 -            -                 -           (6,498,712)    (6,498,712)
                                                      ---------------------------------------------------------------------------
Balance, December 31, 1996                                9,764         122,857        28,068,560      (27,689,375)       511,806
  Conversion of Series C
    preferred stock (Note 8)                             (2,137)         22,637           (20,500)          -              -
  Issuance of Series E preferred
    stock (Note 8)                                           25           -             2,409,145           -           2,409,170
  Issuance of Series F preferred
    stock (Note 8)                                           25           -             2,409,145           -           2,409,170
  Exercise of incentive stock options (Note 9)               -            5,765           891,950           -             897,715
  Conversion of debentures and accrued
    interest (Note 5)                                        -           22,620         2,306,178           -           2,328,798
  Value recognized for issuances of warrants and
    and extension of stock options (Notes 5 and 9)           -            -               283,000           -             283,000
  Exercises of warrants                                      -           13,710             1,290           -              15,000
  Issuance of common stock to lessor                         -              500            24,500           -              25,000
  Dividends declared on Series E and
    Series F preferred stock (Note 8)                        -            -                 -             (200,000)      (200,000)
  Shares issued to effect acquisition (Note 2)               -              730           263,895           -             264,625
  Accretion of beneficial conversion feature on
    Preferred Stock (Note 8)                                 -            -               560,606         (560,606)        -
  Net (loss)                                                 -            -                 -           (5,596,500)    (5,596,500)
                                                      ----------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997                            $   7,677      $  188,819     $  37,197,769    $ (34,046,481)  $   3,347,784
                                                      ----------------------------------------------------------------------------
                                                      ----------------------------------------------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE>

                                     F-5

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>

                                                                                      1997               1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                 <C>
Cash Flows from Operating Activities
  Net (loss)                                                                    $   (5,596,500)     $   (6,498,712)
  Adjustments to reconcile net (loss) to net
    cash (used in) operating activities:
    Depreciation                                                                       650,041             581,878
    Amortization                                                                     4,397,705           4,189,947
    Amortization of discount on debt (Note 5)                                          704,756                 -
    Changes in assets and liabilities:
    (Increase) decrease in:
        Trade accounts receivable                                                   (1,237,533)            631,849
        Prepaid expenses                                                                54,964            (153,090)
    Increase (decrease) in:
        Accounts payable                                                              (482,205)           (49,625)
        Accrued development costs (Note 6)                                            (487,500)               -
        Deferred revenues                                                              121,967            122,000
        Other current liabilities (Note 3)                                             102,685            (58,671)
                                                                                ----------------------------------
NET CASH (USED IN) OPERATING ACTIVITIES                                             (1,771,620)        (1,234,424)
                                                                                ----------------------------------

Cash Flows from Investing Activities
  Purchases of equipment, furniture, and software                                     (317,144)          (380,454)
  Net increase in deposits and other assets                                           (129,341)               -
  Business acquisition (Note 2)                                                        (61,160)               -
                                                                             --------------------------------------
Net cash (used in) investing activities                                               (507,645)          (380,454)
                                                                             --------------------------------------
</TABLE>

See Notes to Consolidated Financial Statements.

                                     F-6

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>

                                                                                     1997               1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                             <C>                      <C>
Cash Flows from Financing Activities
  Net repayments of bank note                                                          (601,316)          (510,474)
  Proceeds from issuance of warrants                                                        -              697,180
  Proceeds from long-term obligations                                                   317,000          2,226,820
  Principal payments on long-term obligations                                        (3,458,428)          (863,258)
  Proceeds from issuance of preferred stock, net                                      4,818,340                -
  Proceeds from issuance of common stock                                                912,715             99,860
  Proceeds from issuance of convertible debentures                                      700,000                -
  Payments of dividends on Series E and
    Series F preferred stock                                                           (123,542)               -
                                                                                -----------------------------------
Net cash provided by financing activities                                             2,564,769          1,650,128
                                                                                -----------------------------------

Net increase in cash                                                                    285,504             35,250
CASH
  Beginning                                                                              56,277             21,027
                                                                                -----------------------------------
  Ending                                                                             $  341,781         $   56,277
                                                                                -----------------------------------
                                                                                -----------------------------------

Supplemental Disclosure of  Cash Flow Information
    Cash paid for interest                                                           $1,016,285         $  734,761

Supplemental Schedule of Non-Cash Investing
  and Financing Activities
    Convertible debentures and accrued interest
        converted into common stock (Notes 5 and 8)                                  $2,328,798         $  186,514
    Capital leases incurred for use of equipment (Note 7)                               720,047            334,615
    Conversion of Series C preferred  stock (Note 8)                                      2,137              5,464
    Value recognized for issuances of warrants and
        extension of stock options (Notes 5 and 9)                                      283,000                -
    Issuance of common stock to effect business acquisition (Note 2)                    264,625                -
    Accretion of beneficial conversion feature on
        preferred stock (Note 8)                                                        560,606                -
</TABLE>

See Notes to Consolidated Financial Statements.

                                     F-7

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1.      NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

VISTA Information Solutions, Inc. (the "Company") is an information company
that provides environmental risk information and address-based hazard and
classification information to bankers, engineers, insurance companies and
corporations throughout the United States.

MANAGEMENT'S PLANS AND CORPORATE LIQUIDITY

For the year ended December 31, 1997, the Company has incurred a net loss of
$5,596,500, which includes $5,047,746 of depreciation and amortization
(including a one time impairment loss of $980,072 on acquired technology as
discussed in Note 2). The Company also has an accumulated deficit of
$34,046,481 as of December 31, 1997. During 1997, the Company's earnings
before interest, taxes, depreciation, and amortization (EBITDA) was $916,957
compared to ($1,508,432) for the year ended December 31, 1996. Also in 1997,
the Company's working capital increased to $1,643,371 at December 31, 1997
from ($1,909,576) at December 31, 1996. The Company has improved its
relationship with its vendors and suppliers and is current on its obligations
with substantially all creditors.

In 1997, the Company experienced an approximate 24% increase in revenues,
primarily attributable to the sale of new products and GUS related contracts.
This increase in revenues, together with the issuance of $5,000,000 of Series
E and F preferred stock, were significant factors in the Company's ability
to meet its obligations in 1997.

Management of the Company believes that the level of revenues realized in the
fourth quarter of 1997 and continuing into 1998, continued monitoring of
costs and expenses and the Company's current sources of bank financing will
be able to support its anticipated level of operations, including being able
to satisfy the Company's cash requirements, and that no additional debt or
equity funds will be required. The factors which will influence the Company's
ability to sustain revenues at the level necessary to achieve break even
operations is the continuance of the levels of GUS revenues generated in late
1997 and maintaining levels of environmental report revenues. However, there
can be no assurance that the Company will not find it necessary to obtain
additional financing for capital expenditures or acquisitions or will be able
to maintain profitable operations and positive cash flows.

REVERSE STOCK SPLIT AND REINCORPORATION

On January 27, 1998 the Company's Board of Directors approved a
reincorporation of the Company in Delaware and a one-for-two reverse stock
split. On March 17, 1998, the Company's stockholders approved the
reincorporation and reverse stock split. All references to common shares,
earnings (loss) per common share and conversion rates in the consolidated
financial statements and in these notes have been restated to retroactively
reflect the effect of the split. In connection with the reincorporation of
the Company as a Delaware corporation the par value of the common and
preferred stock was changed to $.001 per share. The change in the par values
is not reflected in the consolidated financial statements.

Prior to restatement, the actual amount of common stock shares authorized as
of December 31, 1996 was 43,890,000 of which 12,285,651 common stock shares
were issued and outstanding.

A summary of the Company's significant accounting policies follows:

                                      F-8
<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.   NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary, Vista Environmental Information, Inc. (VEI). All
significant intercompany accounts and transactions have been eliminated in
consolidation.

USE OF ESTIMATES

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the consolidated financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.

CASH

The Company maintains its cash accounts in various commercial banks located
throughout the United States. Accounts at each bank are insured by the
Federal Deposit Insurance Corporation (FDIC) up to $100,000 per bank. The
Company's accounts at these institutions, at times, may exceed the federally
insured limit. The Company has not experienced any losses in such accounts.

EQUIPMENT, FURNITURE AND PURCHASED SOFTWARE

Equipment, furniture and purchased software are stated at cost. Depreciation
is computed using accelerated and straight-line methods over the estimated
useful lives of the respective assets, typically three to seven years for
equipment and furniture and three years for purchased software. The
amortization expense on assets acquired under capital leases is included with
depreciation expense on owned assets. Purchased software, at December 31,
1997, includes $71,799 of costs expended to develop software to be used
internally.

ACQUIRED TECHNOLOGY AND ENVIRONMENTAL DATABASES AND OTHER INTANGIBLE ASSETS

Acquired technology and environmental databases represents the assets
acquired with the acquisition of VEI in February 1995 and the excess of the
purchase price over net assets acquired with the acquisition of EnviroCheck
in November 1997 (Note 2). These assets are being amortized over their
estimated useful lives of three years and five years, respectively.

                                      F-9
<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.   NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ASSET IMPAIRMENT

Statement of Financial Accounting Standard No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
(SFAS 121) was adopted as of January 1, 1996. SFAS 121 establishes the
accounting practice for the recognition and measurement of impairment losses
on certain long-lived assets. There were no adjustments required for the
adoption of SFAS 121.

The Company reviews its intangibles and other long-lived assets periodically
in accordance with SFAS 121 to determine potential impairment by comparing
the carrying value of the assets with estimated future cash flows expected to
result from the use of the assets, including cash flows from disposition.
Should the sum of the expected future net cash flows be less than the
carrying value, the Company would determine whether an impairment loss should
be recognized. An impairment loss would be measured by comparing the amount
by which the carrying value exceeds the fair value of the asset being
evaluated for impairment.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of cash approximates its fair value due to the demand
nature of these assets. The methods and assumptions used to estimate the fair
value of the Company's current and long-term obligations are based on the
current rates offered to the Company for debt of the same remaining
maturities with similar collateral requirements. Due to the inherent
uncertainty in determining the approximate interest rate required to
calculate the fair value of the convertible debt and note payable to ISO
(Notes 5 and 6), the Company used an average interest rate of approximately
26%. The rate applied to those long-term debt instruments would yield a fair
value of approximaely $1,305,000 compared to their carrying value of
$1,484,000 at December 31, 1996. The estimated fair value of the Company's
current and long-term debt obligations aproximated their carrying value at
December 31, 1996. At December 31, 1997, the fair value of all of the
Company's current and long-term debt obligations approximated their fair
value.

REVENUES AND DEFERRED REVENUE

The Company recognizes revenue in the month in which product is shipped or in
which information is transmitted to the customer. The Company extends credit
to certain customers, located throughout the United States, generally on a
net 30 day basis. Deferred revenue represents amounts billed in advance for
certain software program license fees. The license fee agreement is typically
one year in length, and revenue is recognized ratably over the life of the
agreement.

INCOME TAXES

Deferred taxes are provided on a liability method whereby deferred tax assets
are recognized for deductible temporary differences, and operating loss and
tax credit carryforwards and deferred tax liabilities are recognized for
taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases.
Deferred tax assets are reduced by a valuation allowance when, in the opinion
of management, it is more likely than not that some portion or all of the
deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of
enactment.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs are charged to expense as incurred. The
Company is involved in activities which include continual development of new
products and improvement of existing products.

                                     F-10
<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.   NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

ACCOUNTING FOR STOCK-BASED COMPENSATION

The Company has elected to continue to use the intrinsic value method of
accounting prescribed by Accounting Principles Board Opinion No. 25 (APB 25),
Accounting for Stock Issued to Employees to account for stock-based employee
compensation costs. As required by Statement of Financial Accounting
Standards No. 123 (SFAS 123), Accounting for Stock-Based Compensation,
certain proforma disclosures are made at Note 9. All nonemployee stock-based
compensation is recorded at the fair value of the services received or the
equity instrument issued, whichever is more reliably measurable.

LOSS PER COMMON SHARE

In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128 (SFAS 128): Earnings per Share.
SFAS 128 establishes standards for computing and presenting earnings per
share (EPS), including replacing the presentation of primary EPS with a
presentation of basic EPS. SFAS 128 also requires dual presentation of basic
and diluted EPS on the face of the income statement for all entities with a
complex capital structure and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and denominator of
the diluted EPS computation. The Company adopted SFAS 128 for its fiscal year
ended December 31, 1997. SFAS 128 did not have a material impact on the
Company and there was no effect on the 1996 reported loss per share as a
result of this statement. Because of losses from continuing operations, the
effects of stock options, convertible preferred stock and common stock
warrants are antidilutive. Accordingly, the Company's presentation of diluted
earnings per share is the same as that of basic earnings per share for 1997
and 1996. For 1997, the number of additional shares that would have been
added to the weighted average shares outstanding for diluted loss per share
was approximately 8,200,000.

Net loss attributable to common stockholders is computed by adding to the net
loss the effects of preferred stock dividends and the periodic accretion of
the beneficial conversion feature on the Series E and Series F preferred
stock issued in 1997 (Note 8).

RECLASSIFICATIONS

Certain reclassifications have been made to the consolidated financial
statements as of and for the year ended December 31, 1996 in order to
conform to the presentation used for the year ended December 31, 1997. These
reclassifications had no effect on net loss or stockholders' equity as
previously reported.

                                     F-11
<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2.     ACQUISITIONs

VISTA ENVIRONMENTAL INFORMATION, INC.

In February 1995, the Company acquired all of the outstanding stock of VEI in
exchange for newly issued common and preferred shares of the Company. The
acquisition was accounted for using the purchase method of accounting whereby
the purchase price of $11,996,024 was allocated entirely to acquired
technology and environmental databases, which represented the fair value of
the net assets acquired in the acquisition. During September 1997, management
of the Company determined that a portion of the acquired technology and
environmental databases acquired with VEI in 1995 was impaired and therefore
the Company recorded a write-off of $980,072 and charged this amount to
operations at the date the impairment became known. As of December 31, 1997,
management has determined that no impairment of the remaining acquired
technology and environmental databases exists.

ENVIROCHECK LTD.

On November 21, 1997, the Company purchased substantially all of the assets
of EnviroCheck Ltd. (EnviroCheck) which was engaged in the business of
developing databases of environmental risk site locations. These assets
included maps, federal and state documents, databases, customer lists, office
equipment, and the rights to the name "EnviroCheck". The purchase price
consisted of cash of $50,000 at date of closing and 36,500 shares of the
Company's common stock issued to the seller. The Company valued the
securities issued at $264,625.

The acquisition was accounted for using the purchase method of accounting
whereby the purchase price was allocated among the assets acquired and the
liabilities assumed on the basis of their estimated fair values on the date
of acquisition resulting in an excess of the purchase price over the
estimated fair values of the net assets acquired. The proforma results of
operations would not have been materially different than the historical
results reported.

NOTE 3.     OTHER CURRENT LIABILITIES

Other current liabilities consist of the following:

<TABLE>
<CAPTION>
                                                                                      1997               1996
                                                                             --------------------------------------
<S>                                                                             <C>               <C>
Accrued dividends on preferred stock (Note 8)                                    $       76,458    $           -
Deferred rent                                                                            95,107                -
Accrued compensation and employee benefits                                              187,528            182,139
Other accrued expenses                                                                   67,230            117,310
                                                                             --------------------------------------
                                                                                 $      426,323    $       299,449
                                                                             --------------------------------------
                                                                             --------------------------------------
</TABLE>


                                     F-12
<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4.     NOTE PAYABLE TO BANK

The Company has a factoring agreement with a bank. Transactions under the
agreement have been treated as borrowings due to the existence of repurchase
obligations. The borrowings under this arrangement are collateralized by the
Company's cash and trade receivables. The borrowing arrangement allows the
Company to borrow up to $1,250,000 based on 80% of eligible receivables.
Outstanding amounts bear interest at the rate of 1.5% per month. There are
additional administrative fees of 1% per month charged by the lender based on
the value of the receivables submitted for borrowing. At December 31, 1996,
there was $601,316 outstanding under this agreement. At December 31, 1997,
there were no amounts outstanding under this agreement.

The Company has accepted a proposal from this bank to replace the factoring
agreement with a bank line of credit agreement. The terms of this proposal
will allow the Company to borrow up to $1,500,000 based on 80% of eligible
receivables at an interest rate of .5% above the bank's prime rate, and will
be collateralized by the Company's assets. Upon the Company achieving one
quarter of positive net profit after tax, the interest is to be reduced to
 .25% above the bank's prime rate. The proposal also contains covenants
requiring the Company to maintain certain ratios and financial requirements
on a monthly basis, comply with certain reporting requirements, and to obtain
the bank's approval on events such as incurring senior debt, paying cash
dividends, or repurchasing stock. The Company will pay .25% per annum on the
total facility as an additional administrative fee.

NOTE 5.      LONG-TERM OBLIGATIONS

<TABLE>
<CAPTION>
                                                                                      1997               1996
                                                                             --------------------------------------
<S>                                                                             <C>               <C>
Capital leases - imputed interest at rates ranging from 8.0% to 15.0%,
  due in monthly aggregate installments of approximately $22,000,
  including interest, to September 2001, secured by equipment (a) (Note 7)      $       863,068   $        462,507

Note payable to finance company - net of unamortized discount of
  approximately $561,756 at December 31, 1996, interest paid                                -            1,938,244
  at 13.5% (b)

Convertible subordinated debentures - interest
  paid at prime plus 2.5% (c)                                                               -              898,928

Note payable to association - interest paid at 1.5% per month (Note 6)                      -              338,942

Convertible subordinated debentures - interest paid at 16% (d)                              -              255,901
                                                                             --------------------------------------
                                                                                        863,068          3,894,522
Less current maturities                                                                (391,872)          (945,882)
                                                                             --------------------------------------
                                                                                $       471,196   $      2,948,640
                                                                             --------------------------------------
                                                                             --------------------------------------
</TABLE>

                                      F-13
<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5.      LONG-TERM OBLIGATIONS (CONTINUED)

(a) Early in 1997, the Company was notified by one of its lessors that given
its default status all amounts due under certain leases were currently due
and payable and a return of the equipment was requested. Therefore, as of
December 31, 1996, all amounts owing to this lessor were classified as
short-term. Subsequent to December 31, 1997, the Company and the lessor
reached a settlement whereby the Company paid the lessor approximately
$180,000 which represented the full payment for all past due amounts under
the equipment leases as of March 1998, as well as buyouts on certain leases,
attorney fees, late charges, and interest. With this settlement, all lease
terms were reinstated. Amounts paid in 1998 which relate to 1997 and prior
have been accrued in the accompanying consolidated balance sheets. In
addition, in consideration of the settlement reached in March 1998, all
amounts payable to this lessor have been classified between short-term and
long-term obligations in accordance with the original terms of the respective
leases at December 31, 1997.

(b) On April 30, 1996, the Company entered into an agreement with a finance
company for a $2,500,000 loan with warrants to purchase 5% of the fully
diluted Common Stock (623,791 shares) at an exercise price of $0.02 per share
with additional warrants to be issued on the anniversary dates of the loan.
The warrants contain certain anti-dilution adjustments. The Company assigned
an original value to the 623,791 warrants of $648,180 based on the relative
estimated fair value of the warrants and the debt at the time of issuance.
The note payable was recorded at discount by this amount. The discount was
amortized using the effective interest (approximately 26%) method over the
expected three year life of the loan. In August 1997, in connection with the
issuance of Series E and Series F preferred stock to this finance company and
its affiliates (Note 8), this note was repaid in full. As a result, the
Company accelerated the amortization of the remaining discount as of that
date.

(c) The Company assumed $898,928 of convertible debentures in connection with
its 1995 acquisition of VEI. VEI issued these debentures in 1994 (the 1994
debentures). The 1994 debentures were convertible into Series C preferred
stock at a rate of $16.72 per share. The 1994 debentures were originally due
in January 1996. If the Company did not elect to repay the amount
outstanding, the holder had the option to either convert the entire amount
into Series C preferred stock or extend the debenture for one year and
receive additional warrants. The Company did not repay the 1994 debentures in
January 1996 or subsequently in January 1997. As a result, the holders on
both occasions elected to extend the debentures for one year and received
warrants for the purchase of 3,520 and 4,136 shares of Series C preferred
stock at $16.72 per share in January 1996 and 1997, respectively (Note 9). In
September 1997, holders of all these outstanding debentures elected to
convert $1,251,338 of principal and accrued interest directly into 372,976
shares of the Company's common stock (Note 8).


                                      F-14
<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5.      LONG-TERM OBLIGATIONS (CONTINUED)

(d) In 1995, the Company received approximately $446,000 from the issuance of
convertible subordinated debentures (the 1995 debentures). In connection with
the 1995 debentures, the Company issued warrants to purchase 123,069 shares
of Common Stock at $ 1.812 per share (Note 9). The 1995 debentures were to
automatically convert into common stock at $1.50 per share if they were not
repaid by April 1, 1996. However, the Company defaulted on these obligations,
as the quarterly interest payments had not been made. In 1996, the Company
remedied this default by offering the 1995 debenture holders the option to
either (i) automatically convert at $1.50 per share (ii) extend the 1995
debentures to March, 1997 under the same terms with an option to convert the
balance to common stock at 70% of the then fair market value or (iii) be
repaid. One 1995 debenture holder elected to be repaid ($20,000 principal)
and all other holders elected options (i) or (ii). Principal and accrued
interest totaling $186,514 was converted by 1995 debenture holders into
137,961 shares of common stock during March 1996. In June 1997, the Company
modified the terms of the debentures, resulting in the Company issuing
warrants to purchase 184,899 shares of Common Stock at $1.38 per share. The
Company expensed the estimated fair value of these warrants over the period
until converted. During 1997, the remaining principal and accrued interest
totaling $322,512 was converted by the holders into 328,432 shares of the
Company's common stock.

During 1996 the Company obtained bridge financing from certain members of its
Board of Directors of approximately $200,000, which was repaid with the note
payable proceeds in April 1996 (subparagraph (c) above). In connection with
the bridge financing, the Company issued 107,693 warrants to purchase shares
of common stock at $1.04 per share through March 2001. The warrants were
assigned a value of $49,000 based on the estimated fair value of the warrants
at the date of grant, and the related debt was recorded at a discount by such
amount. The full amortization of the discount has been included in interest
expense for the year ended December 31, 1996.

During 1997, the Company raised $700,000 through the issuance of convertible
debentures (the 1997 debentures) to members of its Board of Directors and
others. The 1997 debentures bore interest at 16% and were due in twelve
months from the date of execution. They also included warrants to purchase
shares of the Company's common stock at an exercise price of 125% of the fair
market value of the Company's common stock using a 21 day average. The 1997
debentures were able to be converted into shares of the Company's common
stock at a rate of 70% of the fair market value of the stock using a 21 day
average at a price not less than the exercise price of the warrants. The 1997
debentures and accrued interest were converted in 1997 into approximately
319,488 shares of the Company's common stock.

During 1997, the Company borrowed $300,000 from a finance company which bore
interest at 14% per annum and which included warrants for 160,000 shares at
an exercise price of $.01. The value assigned to the warrants was recognized
as expense over the period the note was outstanding. The note payable was
repaid during 1997.

During 1997, the Company issued a note payable to an individual for $17,000
which was converted into 17,035 shares of the Company's common stock prior to
December 31, 1997.

                                     F-15

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES to CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6.      INSURANCE SERVICES OFFICE, INC. (ISO) AGREEMENT

In October 1992, the Company and ISO, signed a 15 year mutually exclusive
contract (Joint Services Agreement) to offer the Geographic Underwriting System
(GUS) system to electronically provide geographically-based information to
insurers. Under the provisions of the agreement, the Company will provide its
proprietary GUS software and support and ISO will provide sales, marketing,
billing and maintenance of the communications network to the GUS users. The
Company and ISO generally share project revenues equally, net of any payments to
third party information providers. The Company's share of revenues under this
agreement were approximately $2,700,000 and $890,000 for the years ended
December 31, 1997 and 1996, respectively. In this regard, approximately
$1,500,000 of the 1997 revenues are from one ISO customer.

In January 1994, under the terms of an addendum to the agreement, both
parties agreed to develop a national public protection underwriting data ("PPC")
layer for the GUS project. During the year ended December 31, 1994, the Company
expensed the maximum of $487,500 for development costs due to ISO under this
agreement. During 1997, at the completion of the project, the Company and ISO
calculated the actual amount of development costs due to ISO to be approximately
$325,000. Based on this calculation, the Company recorded a net reduction of
expense of approximately $162,500 in December 1997 representing the difference
between the estimated liability recorded in 1994 for these development costs and
the actual costs incurred.

In March 1997, the Company and ISO signed an amendment to the Joint Services
Agreement which required the Company to customize certain of the Company's
database applications for a new ISO customer. As of December 31, 1997, the
Company had completed their obligations as required by this amendment.

During 1996, the Company entered into an agreement with ISO for a loan, not to
exceed $500,000. The advances bore interest at 1.5% per month. At December 31,
1996 the total amount outstanding on the ISO loan was $338,942. During 1997, the
loan was paid in full.

NOTE 7.      LEASE COMMITMENTS

The Company leases furniture and equipment under leases that meet the criteria
for capital lease classification. The Company also leases its operating
facilities under noncancelable operating leases with aggregate monthly payments
of approximately $34,000. The facility leases require the payment of taxes,
maintenance, utilities and insurance. Leased assets included in the consolidated
balance sheets are as follows:

<TABLE>
<CAPTION>

Leased Assets                                                  1997         1996
------------------------------------------------------------------------------------
<S>                                                         <C>          <C>
Equipment and furniture                                     $1,544,143   $ 578,526
Less accumulated amortization                                 (797,384)   (127,351)
                                                            ------------------------
Net leased assets                                           $  746,759   $ 451,175
                                                            ------------------------
                                                            ------------------------

</TABLE>


                                     F-16

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES to CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7.      LEASE COMMITMENTS (CONTINUED)

Future annual minimum lease payments due under capital leases and noncancelable
operating leases consist of the following at December 31, 1997:

<TABLE>
<CAPTION>

                                                                   Capital    Operating
Years Ending December 31,                                          Leases      Leases
---------------------------------------------------------------------------------------
<S>                                                             <C>          <C>
1998                                                            $  482,609   $  391,521
1999                                                               365,259      400,248
2000                                                               151,871      412,860
2001                                                                 2,660      402,375
2002                                                                   -        343,970
Thereafter                                                             -        355,066
                                                                -----------------------
           TOTAL MINIMUM LEASE PAYMENTS                          1,002,399   $2,306,040
                                                                             ----------
                                                                             ----------
Less amounts representing interest (8.0% to 15.0%)                (139,331)
                                                                ----------
           PRESENT VALUE OF NET MINIMUM LEASE PAYMENTS          $  863,068
                                                                ----------
                                                                ----------

</TABLE>

Total rent expense under operating leases for the years ended December 31, 1997
and 1996 totaled approximately $487,000 and $475,000, respectively.

NOTE 8.      PREFERRED STOCK

The Board of Directors is authorized to issue preferred stock or other senior
securities and determine the series and number of preferred shares to be issued
and any related designations, powers, preferences, rights, qualifications,
limitations or restrictions. The total number of shares authorized is 2,000,000.
The following descriptions are of those designations existing as of December 31,
1997.

SERIES B PREFERRED STOCK

Series B preferred stock has a liquidation preference of $15 per share and is
convertible at any time at the holder's option into 5.2965 shares of the
Company's common stock, after application of certain anti-dilution
provisions. The purchaser of the Series B preferred stock also received
options to purchase 187,500 of the Company's common stock at prices ranging
from $6.00 to $8.60 per share, (Note 9), subject to adjustment, and the right
to designate one nominee for a seat on the Board of Directors. The Series B
convertible preferred stock has a number of restrictive covenants including
requiring prior approval by the Company of the preferred stockholders for an
increase in the size of the Board of Directors and before entering into any
merger, joint venture, or distribution agreement.

                                     F-17

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES to CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8.      STOCKHOLDERS' EQUITY (CONTINUED)

SERIES C PREFERRED STOCK

Under the terms of the acquisition of VEI, the Company issued 646,146 shares of
Series C preferred stock, which is convertible at any time at the holder's
option into 5.2965 shares of the Company's common stock, after application of
certain anti-dilution provisions. The Series C preferred stockholders are
entitled to a liquidation preference of $16.718 per share and are entitled to
elect two directors of the Company. In addition, the Series C preferred
stockholders have other rights and preferences including the requirement of an
affirmative vote of the holders of a majority of the outstanding shares of the
Series C preferred stockholders to amend the Articles of Incorporation or the
Bylaws of the Company or increase the size of the Board of Directors. During the
years ended December 31, 1997 and 1996, 213,697 and 54,636 shares, respectively
of the Series C preferred stock were converted into 1,131,847 and 273,180 shares
of common stock.

SERIES D PREFERRED STOCK

During 1995, the Company issued 187,134 shares of Series D preferred stock to
certain holders of Series C and Series B preferred stock for approximately
$2,500,000. Each share of the Series D preferred stock is convertible at any
time at the holder's option into 5.2965 shares of the Company's common stock,
after application of certain anti-dilution provisions. The Series D preferred
stock has a liquidation preference of $13.36 per share and other rights and
preferences similar to the Series B and Series C preferred stock except that
Series D preferred stockholders do not have the right to designate a director,
but instead vote, on an as-if-converted basis, along with the holders of common
stock in the election of directors of the Company.

SERIES E PREFERRED STOCK

In August 1997, the Board of Directors authorized the issuance of 2,500 shares
of Series E convertible preferred stock at par value of $.01 and at a stated
value and purchase price of $1,000 per share for an aggregate gross purchase
price of $2,500,000. The purchaser is entitled to receive quarterly dividends of
$30.00 per share which will increase by $5.00 per share each year after August
31, 2002. Management of the Company expects that the shares will be redeemed or
converted prior to August 31, 2002. The Series E preferred shares are
convertible into the Company's common stock at an initial conversion price of
$5.50 per share. If the Company does not successfully close a registered public
offering of the Company's common stock by June 30, 1998 in which, (i) the gross
proceeds of the offering are at least $15,000,000 and (ii) the offering price
per share is greater than $8.00 (Qualified Offering), the conversion price shall
be adjusted to $4.00 per share. Series E preferred stock may be redeemed, at the
option of the Company, at any time, provided the average closing bid price of
the Company's common stock for the 20 consecutive trading days preceding the
date of the redemption notice exceeds 200 percent of the Series E conversion
price. The Series E preferred stock has a liquidation preference of $1,000 per
share, plus unpaid dividends, and other rights and preferences similar to the
Series B and Series C preferred stock except that Series E preferred
stockholders vote on an as-if-converted basis, along with the holders of common
stock in the election of directors of the Company.


                                     F-18

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES to CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8.      STOCKHOLDERS' EQUITY (CONTINUED)

SERIES F PREFERRED STOCK

In August 1997, the Board of Directors authorized the issuance of 2,500 shares
of Series F convertible preferred stock at par value of $.01 and at a stated
value and purchase price of $1,000 per share for an aggregate gross purchase
price of $2,500,000 in a private placement. The Series F preferred stockholder
is entitled to receive quarterly dividends of $30.00 per share which will
increase by $5.00 per share for each year after August 31, 2002. Management of
the Company expects that the shares will be redeemed or converted prior to
August 31, 2002. The Series F preferred shares shall be convertible into the
Company's common stock on or after the earlier of the closing of a Qualified
Offering or July 1, 1998 at an initial conversion price of (i) 75 percent of the
offering price in a successfully closed Qualified Offering or (ii) in the event
the Qualified Offering is not closed prior to July 1, 1998, 75 percent of the
average closing bid price for the Company's common stock for the 20 consecutive
trading days prior to June 30, 1998. Series F preferred stock may be redeemed,
at the option of the Company, at any time on or after June 30, 1998, provided
the average closing bid price of the Company's common stock for the 20
consecutive trading days preceding the date of the redemption notice exceeds 200
percent of the Series F conversion price. The Series F preferred stock has a
liquidation preference of $1,000 per share, plus unpaid dividends, and other
rights and preferences similar to the Series B and Series C preferred stock
except that Series F preferred stockholders vote on an as-if-converted basis,
along with the holders of common stock in the election of directors of the
Company.

DIVIDENDS DECLARED

The Board of Directors of the Company has approved the payment of dividends as
they become payable in accordance with the Series E and F preferred stock
agreement at a dividend rate of preferred stock Series E and Series F of $30.00
per share, payable quarterly. As of December 31, 1997, $200,000 of dividends
have been declared of which $76,458 are payable.

BENEFICIAL CONVERSION FEATURE

The Series E and Series F preferred stock contains a beneficial conversion
feature that is recognized as an amount equal to the difference between the
conversion price and the fair value of the common stock at the date of issuance
multiplied by the number of common shares into which the security is
convertible. This amount is accounted for as a return to the preferred
shareholders in a manner similar to a dividend and is therefore accreted from
the date of issuance through the date the preferred stock is first convertible.
The aggregate value of this conversion feature for Series E and F was $1,061,000
of which $560,606 has been accreted at December 31, 1997.


                                     F-19

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9.  STOCK OPTIONS AND INCENTIVE PLANS

At December 31, 1997, the Company has stock-based incentive plans which are
described below. In addition, the Company has granted options and warrants
outside of the plans to officers, directors, consultants and certain debt and
equity holders. As permitted under generally accepted accounting principles,
grants to employees are accounted for following APB 25 and related
interpretations. Accordingly, no compensation cost is recognized for grants
to employees under these plans when the option price is at least equal to the
quoted market price on the date of grant. Had compensation cost for all
awards in 1997 and 1996 under the stock-based compensation plans been
determined based on the grant date fair values of awards (the method
described in SFAS 123), reported net loss and loss per common share would
have been as follows:

<TABLE>
<CAPTION>

                                                                                      1997               1996
-------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                       <C>
Net (loss) attributable to common stockholders:
   As reported                                                               $      (6,357,106)       $  (6,498,712)
   Proforma                                                                         (6,621,597)          (6,582,168)

Basic and diluted net (loss) per share:
   As reported                                                               $           (0.87)       $       (1.12)
   Proforma                                                                              (0.90)               (1.14)

</TABLE>

The proforma effects of applying SFAS 123 are not indicative of future
amounts since, among other reasons, the proforma requirements of the
Statement have been applied only to options granted after December 31, 1994.

The Company has a 1990 Stock Option Plan (the 1990 Plan) that reserved 15% of
the then outstanding common stock for issuance. With the approval of the 1995
Stock Incentive Plan (the 1995 Plan) discussed below, the 1990 plan was
terminated and accordingly, there were no further grants under the 1990 Plan.

Awards granted under the plans are exercisable over a period determined at
the time of grant, not to exceed ten years. The types of awards issuable
under the 1995 Plan are incentive options, non-qualified options, restricted
stock awards, performance units and stock appreciation rights. Incentive
options under the Plan are granted at an exercise price of not less than 100%
of the fair market value at the date of grant and vest over a period of one
to three years. Non-qualified options may be granted at exercise prices not
less than 85% of market value at the date of grant, with vesting determined
at the time of grant. Incentive options must be granted with exercise prices
equal to the fair market value on the date of grant, except that incentive
options granted to persons owning stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company may not be
granted at less that 110% of the fair market value on the date of grant.

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1997 and 1996: no dividend yield for 1997 or
1996; expected volatility of 56 to 85 percent and 58 to 68 percent; risk-free
rates of 5.71 to 5.83 percent and 5.13 to 6.21 percent; and expected lives of
two to five years for both 1997 and 1996.

The 1995 Plan provides for an annual automatic grant of 5,000 non-qualified
options to non-employee members of the Board of Directors.

                                   F-20

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9.  STOCK OPTIONS AND INCENTIVE PLANS (CONTINUED)

A summary of the stock option activity under all of the aforementioned plans is
as follows:

<TABLE>
<CAPTION>

                                                          1997                                1996
                                          -------------------------------------------------------------------------
                                                                 WEIGHTED                             Weighted
                                                                 AVERAGE                              Average
                                                                 EXERCISE                             Exercise
              Fixed Options                   OPTIONS             PRICE           Options              Price
-------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                    <C>           <C>                 <C>
Outstanding at beginning of year                1,204,733        $  2.04        1,374,345              $ 2.04
  Granted                                         538,500           5.14          194,500                2.04
  Exercised                                      (254,757)         (3.00)        (236,796)              (0.42)
  Expired/Surrendered                             (66,250)         (2.92)        (127,316)              (4.16)
                                          -------------------------------------------------------------------------

Outstanding at end of year                      1,422,226        $  2.94        1,204,733              $ 2.04
                                          -------------------------------------------------------------------------
                                          -------------------------------------------------------------------------

Exercisable at end of year                        784,226        $  2.14          719,898              $ 1.80
                                          -------------------------------------------------------------------------
                                          -------------------------------------------------------------------------

Weighted-average fair value per
   option of options granted
   during the year                                  $2.55                      $     0.64
                                          -------------------------------------------------------------------------
                                          -------------------------------------------------------------------------

</TABLE>

A further summary about fixed options outstanding under these plans at
December 31, 1997 is as follows:

<TABLE>
<CAPTION>

                                                Options Outstanding                     Options Exercisable
                                  -------------------------------------------------------------------------------
                                                     Weighted
                                                      Average         Weighted                         Weighted
                                                     Remaining         Average                          Average
     Range of                          Number       Contractual       Exercise        Number           Exercise
        Exercise Prices             Outstanding    Life in Years        Price       Exercisable          Price
-----------------------------------------------------------------------------------------------------------------
<S>                                 <C>            <C>                <C>           <C>                <C>
$    0.00 to 2.00                        692,845           6.1            $0.54         478,595            $0.26
     2.01 to 4.00                        256,497           7.6             2.92         160,247             3.02
     4.01 to 6.00                        219,584           8.3             5.66          54,584             4.62
     6.01 to 8.00                        169,350           9.4             6.16           9,350             7.00
     8.01 to 10.00                        83,950           6.1             9.26          81,450             9.26
                                  -------------------------------------------------------------------------------
                                       1,422,226           7.1            $2.94         784,226            $2.14
                                  -------------------------------------------------------------------------------
                                  -------------------------------------------------------------------------------

</TABLE>

                                   F-21

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9.  STOCK OPTIONS AND INCENTIVE PLANS (CONTINUED)

In addition, the Company has granted options and warrants for the purchase of
common stock outside of the plans to officers, directors, consultants and
certain debt and equity holders as follows (including all options and
warrants to purchase common stock discussed in Notes 5 and 8 but excluding
the effect of any conversion rights):

<TABLE>
<CAPTION>

                                                           1997                                1996
                                            ---------------------------------------------------------------------
                                                                   WEIGHTED                           Weighted
                                                                   AVERAGE                             Average
                                                                   EXERCISE                           Exercise
                                                SHARES              PRICE           Shares              Price
-----------------------------------------------------------------------------------------------------------------
<S>                                         <C>                    <C>              <C>               <C>
Outstanding at beginning of year                  1,155,552             $ 1.68         969,484              $5.74
  Granted                                           734,512               1.32         731,484               0.16
  Exercised                                       (716,778)               (.22)            -                  -
Expired/Surrendered                                 (1,000)              (4.76)       (545,416)             (6.14)
                                            ---------------------------------------------------------------------
Outstanding at
   end of year                                    1,172,286             $ 2.54       1,155,552              $1.68
                                            ---------------------------------------------------------------------
                                            ---------------------------------------------------------------------

Exercisable at end of year                        1,172,286             $ 2.54       1,155,552              $1.68
                                            ---------------------------------------------------------------------
                                            ---------------------------------------------------------------------

Weighted average fair value per
   option/warrant of options and
   warrants granted during the year                  $ 0.20                         $     0.94
                                            ---------------------------------------------------------------------
                                            ---------------------------------------------------------------------

</TABLE>

Of the 734,512 options and warrants granted in 1997, 80,000 options and
warrants were at prices which were less than the market price at the date of
grant (weighted average exercise price and fair value of $.02 and $1.48 per
share), 184,898 options and warrants were at prices which were equal to the
market price at the date of grant (weighted average exercise price and fair
value of $1.38 and $.08 per share), and 469,614 options and warrants were at
prices which exceeded the market price at the date of grant (weighted average
exercise price and fair value of $1.52 and $.02 per share.) The majority of
the shares granted in 1996 were at prices below market value in connection
with finance company debt discussed in Note 5.

Management determined the fair value of warrants issued to non-employees
considering the Black-Scholes method, the intrinsic value, the Company's
financial condition and other factors considered appropriate.

A further summary about the options and warrants granted outside of the
Company's formal plans outstanding at December 31, 1997 is as follows:

<TABLE>
<CAPTION>

                                               Options and Warrants                    Options and Warrants
                                                    Outstanding                               Exercisable
                                  ---------------------------------------------------------------------------------
                                                     Weighted
                                                      Average         Weighted                         Weighted
                                                     Remaining         Average                          Average
Range of                               Number       Contractual       Exercise        Number           Exercise
   Exercise Prices                  Outstanding    Life in Years        Price       Exercisable          Price
-------------------------------------------------------------------------------------------------------------------
<S>                               <C>              <C>                <C>           <C>                <C>
$0.00 to 2.00                           899,823             9            $1.42         899,823            $1.42
 2.01 to 4.00                            84,962           5.3             3.92          84,962             3.92
 4.01 to 6.00                            62,501             1             6.00          62,501             6.00
 6.01 to 8.00                            62,500             1             7.20          62,500             7.20
 8.01 to 10.0                            62,500             1             8.60          62,500             8.60
                               ---------------------------------------------------------------------------------
                                      1,172,286          7.43            $2.54       1,172,286            $2.54
                                  ---------------------------------------------------------------------------------
                                  ---------------------------------------------------------------------------------

</TABLE>

                                   F-22

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9.  STOCK OPTIONS AND INCENTIVE PLANS (CONTINUED)

During 1997, the Board of Directors approved an extension of options held by
a Series B preferred shareholder totalling 187,500 shares which had an
original expiration date of December 31, 1997.

Not included in the above table are warrants granted in conjunction with
current and prior extensions of the $898,928 of Convertible Subordinated
Debentures which were converted in 1997 (See Note 8). The former noteholders
have received aggregate warrants for the purchase of 23,306 shares of Series
C preferred stock at exercises prices ranging from $16.00 to $25.08 per share
of which 21,692 shares are outstanding at December 31, 1997.

SHARE CONTINGENCIES

During 1997 the Company executed numerous transactions involving stock
conversions and warrants. Certain errors were made in the mathematical
calculations of the conversions and application of the terms of the
agreements. This resulted in the issuance of certain shares and warrants in
excess of and below the contractual amounts. The Company intends to correct
the number of shares and warrants issued by issuing additional shares in
certain circumstances and requesting the return of certain shares and
warrants. The amounts reflected in these consolidated financial statements
represent the amounts that should have been issued under these arrangements.
Management of the Company believes that the correction of these matters will
not result in a material adjustment to the number of shares issued and
outstanding.

NOTE 10.  SALE OF PRODUCTS

On February 1, 1996, the Company sold and licensed certain of the Company's
software and service bureau products to a former officer of the Company. The
purchase price is contingent and consists of royalty payments ranging from 5%
to 25% on sales of related products for two years, commencing on February 1,
1996, with no minimum or maximum amounts. The net book value of the assets
sold were not significant. Royalty payments for 1997 and 1996 were not
significant.

NOTE 11.  INCOME TAXES

As of December 31, 1997, the Company has net operating loss carryforwards for
federal income tax purposes of approximately $26,149,000 of which $19,500,000
is available at December 31, 1997 to offset future taxable income and which
include carryforwards from VEI. These loss carryforwards expire in varying
amounts through 2012. In addition, the Company has investment tax and
research credit carryforwards of approximately $126,000. Future utilization
of these loss credit carryforwards are subject to certain limitations under
provisions of the Internal Revenue Code including limitations subject to
Section 382, which relates to a 50% change in control over a three year
period, and are further dependent upon the Company attaining profitable
operations. Shares issued to acquire VEI and shares issued in previous
private placement transactions, have caused the Company to exceed the 50%
change in control threshold. This has subjected the Company to limitations of
annual net operating loss and credit carryforwards and may result in the
expiration of a portion of these carryforwards before they can be utilized.
The utilization of $6,600,000 of the Company's net operating loss
carryforwards available to offset future taxable income is limited to
approximately $302,000 in years 1997 through 2001 and $692,000 in years 2002
through 2008. In addition, these net operating losses, which were losses
generated by VEI before the merger, can only be used to offset future VEI
income.

                                   F-23

<PAGE>

VISTA INFORMATION SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11.  INCOME TAXES (CONTINUED)

A reconciliation of the effective tax rates with the federal statutory rate
is as follows:

<TABLE>
<CAPTION>

                                                                             Years Ended December 31,
                                                                               1997               1996
                                                                        -------------------------------------
<S>                                                                     <C>                     <C>
Income tax benefit at statutory rate                                    $(1,959,000)            $(2,274,500)

Change in valuation allowance                                             2,275,000               2,640,500

State taxes                                                                (316,000)               (366,000)
                                                                        ------------------------------------
                                                                        $       -               $       -
                                                                        ------------------------------------
                                                                        ------------------------------------

</TABLE>

The tax effect of temporary differences consisted of the following as of
December 31:

<TABLE>
<CAPTION>

                                                                                1997                   1996
                                                                       ------------------------------------------
<S>                                                                     <C>                     <C>
Deferred tax assets:
  Net operating loss carryforwards                                      $ 10,389,000            $ 9,784,000
  Accrued development costs                                                      -                  195,000
  Compensation element of stock options issued                                95,000                 95,000
  Accrued payroll                                                             58,000                 45,000
  Allowance for doubtful accounts                                             76,000                115,000
  Tax credit carryforwards                                                   126,000                126,000
  Equipment and purchased software                                           309,000                170,000
  Accrued sales tax                                                           32,000                 32,000
  Other                                                                        3,000
                                                                       -------------------------------------
Gross deferred tax assets                                                 11,088,000             10,562,000
  Less valuation allowance                                               (10,954,000)            (8,679,000)
                                                                       -------------------------------------
                                                                       -------------------------------------
                                                                        $    134,000           $  1,883,000
                                                                       -------------------------------------

Deferred tax liabilities:
  Deferred rent                                                              (25,000)               (11,000)
  Acquired technology                                                       (109,000)            (1,872,000)
                                                                       -------------------------------------
                                                                            (134,000)            (1,883,000)
                                                                       -------------------------------------
                                                                        $        -             $        -

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

</TABLE>

                                   F-24

<PAGE>

NOTE 11.  INCOME TAXES (CONTINUED)

As of December 31, 1997, the Company has net operating loss carryforwards for
federal income tax purposes expiring as follows:

<TABLE>
<CAPTION>

<S>                                         <C>
1998                                        $          188,200
1999                                                   119,500
2000                                                    38,600
2001                                                    35,600
2002                                                    42,100
2003                                                   438,600
2004                                                 1,385,800
2005                                                 1,378,000
2006                                                 3,852,300
2007                                                 3,460,500
2008                                                 2,562,400
2009                                                 4,533,700
2010                                                 3,831,900
2011                                                 2,578,100
2012                                                 1,703,700
                                            -------------------
                                            $       26,149,000
                                            -------------------
                                            -------------------

</TABLE>

NOTE 12.  401(k) AND PROFIT SHARING PLAN

Effective January 1, 1992 the Board of Directors adopted a 401(k) Plan ("the
Plan") for its employees. Under the terms of the Plan, a participant may
contribute, on a pre-tax basis, up to twenty percent (20%) of annual
compensation, subject to IRS limitations. The Company may contribute to the
Plan on behalf of each participant. The Company's contribution is
discretionary and depends on the Company's profits and performance during the
year.

At the same time, the Board of Directors adopted a Profit Sharing Plan for
its employees. The Company's contribution is discretionary and depends on the
Company's profits and performance during the year.

There were no contributions made by the Company to these Plans during the
years ended December 31, 1997 or 1996.

                                   F-25

<PAGE>

NOTE 13.  ACCOUNTING PRONOUNCEMENTS ISSUED BUT NOT YET ADOPTED

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income."
SFAS 130 establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income
includes all changes in equity during a period except those resulting from
investments by owners and distributions to owners. SFAS 130 requires that all
items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that
is displayed with the same prominence as other financial statements. In the
past, the Company has not generated transactions considered part of "other
comprehensive income."

In June 1997, the FASB issued SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information." SFAS 131 establishes standards for
reporting information about operating segments. It also establishes standards
for disclosures about products and services, geographic areas, and major
customers. Management is assessing the potential effect of segment reporting,
but has not determined if the Company will be required to report operating
segments.

SFAS 130 and 131 are effective for periods beginning after December 15, 1997,
and require comparative information for earlier years to be restated. The
implementation of these new standards will not affect the Company's results
of operations or financial position, but may impact future financial
statement disclosures.

In October 1997, the Accounting Standards Executive Committee issued
Statement of Position (SOP) 97-2 "Software Revenue Recognition." SOP 97-2
provides guidance on applying generally accepted accounting principles in
recognizing revenue on software transactions. The SOP is effective for
transactions in fiscal years beginning after December 15, 1997. Management of
the Company has not determined whether the adoption of SOP 97-2 will have a
material effect on the Company's consolidated financial statements.

                                   F-26

<PAGE>

         Pursuant to the requirements 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.

                                     VISTA INFORMATION SOLUTIONS, INC.
                                     (registrant)



Dated:  March 30, 1998                By:      /s/ Thomas R. Gay
                                              -------------------------------
                                              Thomas R. Gay
                                              (Chief Executive Officer)


Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below on March 30, 1998 by the following persons on
behalf of the Company and in the capacities indicated.

                                              Signature and Title

                                              /s/ Thomas R. Gay
                                              -------------------------------
                                              Thomas R. Gay, Chief Executive
                                                Officer and  Director

                                              /s/ Jay D. Seid
                                              -------------------------------
                                              Jay D. Seid, Chairman of the Board

                                              /s/ Patrick A. Rivelli
                                              -------------------------------
                                              Patrick A. Rivelli, Director

                                              /s/ Martin F. Kahn
                                              -------------------------------
                                              Martin F. Kahn, Director

                                              /s/ Richard J. Freeman
                                              -------------------------------
                                              Richard J. Freeman, Director

                                              /s/ Robert Boscamp
                                              -------------------------------
                                              Robert Boscamp, Director

                                              /s/ Earl Gallegos
                                              -------------------------------
                                              Earl Gallegos, Director

                                              /s/ E. Stevens Hamilton
                                              -------------------------------
                                              Steven Hamilton
                                              (Principal Financial Officer)

                                              /s/ Brian Conn
                                              -------------------------------
                                              Brian Conn
                                              (Principal Accounting Officer)

<PAGE>


                           VISTA INFORMATION SOLUTIONS, INC.
                            EXHIBIT INDEX TO ANNUAL REPORT
                                    ON FORM 10-KSB

                               FOR THE FISCAL YEAR ENDED
                                   DECEMBER 31, 1997
<TABLE>
<CAPTION>
Item No.       Description                                          Method of Filing
-------        -----------                                          ----------------
<S>            <C>                                                  <C>
3.1            Restated Articles of Incorporation of the
               Company, as amended to date....................      Incorporated by reference to the Company's Post
                                                                    Effective Amendment No. 1 to Form SB-2 Registration
                                                                    Statement on Form S-3 (File No. 33-72248).

3.2            Restated By-Laws of the Company, as amended to
               date...........................................      Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-KSB for the fiscal year ended June
                                                                    30, 1993 (File No. 0-20312).

4.1            Specimen form of the Company's Common Stock
               Certificate....................................      Incorporated by reference to the Company's
                                                                    Registration Statement on Form 10 (File No. 0-20312).

4.2            Specimen form of the Company's Warrant
               Certificate....................................      Incorporated by reference to the Company's
                                                                    Registration Statement on Form 10 (File No. 0-20312).


4.3            Warrant Agreement..............................      Incorporated by reference to the Company's
                                                                    Registration Statement on Form 10 (File No. 0-20312).

4.4            Certificate of Designation of the Rights and
               Preferences of the Company's Series B
               Convertible Preferred Stock....................      Incorporated by reference to the Company's Quarterly
                                                                    Report on Form 10-QSB for the quarter ended September
                                                                    30, 1993 (File No. 0-20312).

4.5            Certificate of Designation of the Rights and
               Preferences of the Company's Series C
               Convertible Preferred Stock....................      Incorporated by reference to the Company's Current
                                                                    Report on Form 8-K filed March 7, 1995 (File No.
                                                                    0-20312).

4.6            Certificate of Designation of the Rights and
               Preferences of the Company's Series D
               Convertible Preferred Stock....................      Incorporated by reference to the Company's Current
                                                                    Report on Form 8-K filed March 7, 1995 (File No.
                                                                    0-20312).

4.9            Option Agreement by and among Paul S. Bachow
               Co-Investment Fund, L.P., Paul S.

                                        E-1

<PAGE>

               Bachow and the Company dated September 15,
               1993.........................................        Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-KSB for the fiscal year ended
                                                                    June 30, 1993 (File No. 0-20312).

4.10           Rockwin Corp. Warrant Certificate dated
               September 3, 1993.............................       Incorporated by reference to the Company's
                                                                    Registration Statement on Form S-8 (File No.
                                                                    33-73212).

4.11           Grant Warfield Option Agreement dated
               October 3, 1991................................      Incorporated by reference to the Company's
                                                                    Registration Statement on Form S-8 (File No.
                                                                    33-73212).

4.12           Alex Tassos Warrant Agreements dated January 1,
               1993 and April 19, 1993........................      Incorporated by reference to the Company's
                                                                    Registration Statement on Form S-8 (File No.
                                                                    33-73212).

4.13           James Hovis Warrant Agreement dated
               December 10, 1993..............................      Incorporated by reference to the Company's
                                                                    Registration Statement on Form S-8 (File No.
                                                                    33-73212).

4.14           Purchase Agreement dated February 28, 1995
               among the Company and certain investors
               identified in the Agreement....................      Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-K for the period ended December 31,
                                                                    1994 (File No. 0-20312).

4.15           Standby Bridge Loan Facility dated January 15,
               1994 between the Company and certain persons
               listed on Exhibit A attached thereto...........      Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-K for the period ended December 31,
                                                                    1995 (File No. 0-20312).

4.16           Amendment to Subordinated Promissory Notes
               dated February 28, 1995 between the Company
               and certain persons listed on Exhibit A
               attached thereto..............................       Incorporated by reference to the Company's
                                                                    Annual Report on Form 10-K for the period ended
                                                                    December 31, 1995 (File No. 0-20312).

4.17           Form of Subordinated Convertible Debenture
               issued from October through December 1995......      Incorporated by reference to the Company's
                                                                    Annual Report on Form 10-K for the period ended
                                                                    December 31, 1995 (File No. 0-20312).

4.18           Form of Warrant issued in connection with the
               Subordinated Convertible Debenture financing
               issued from October through December 1995......      Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-K for the period ended
                                                                    December 31, 1995 (File No. 0-20312).

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<PAGE>


10.3           Geographic Underwriting System Agreement among
               ISO Commercial Risk Services, Inc. and ISO
               Telecommunications, Inc. and the Company, dated
               June 3, 1991...................................      Incorporated by reference to the Company's
                                                                    Registration Statement on Form 10 (File No. 0-20312).

10.4           Supplement to Joint Service Agreement dated
               February 5, 1996 between Insurance Services
               Office, Inc. and the Company...................      Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-K for the period ended December 31,
                                                                    1995 (File No. 0-20312).

10.6           Office Building Lease modification dated
               March 9, 1997 by and between The Shidler
               Group and the Company..........................      Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-K for the period ended December 31,
                                                                    1996 (File No. 0-20312).

10.8           Agreement of Lease dated current lease by and
               between the Company and Sibley Real Estate
               Services.......................................      Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-K for the period ended December 31,
                                                                    1996 (File No. 0-20312).

10.9           1990 Stock Option Plan, as amended.............      Incorporated by reference to the Company's
                                                                    Registration Statement on Form S-8 (File No.
                                                                    33-73212).

10.10          Profit Sharing Plan............................      Incorporated by reference to the Company's
                                                                    Registration Statement on Form 10 (File No. 0-20312).

10.11          1995 Stock Incentive Plan......................      Incorporated by reference to the Company's
                                                                    Registration Statement on Form S-8 (File No.
                                                                    333-09417).

10.13          401(k) Plan....................................      Incorporated by reference to the Company's
                                                                    Registration Statement on Form 10 (File No. 0-20312).

10.14          Employment Agreement of Donald R. Coley, dated
               August 10, 1992................................      Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-KSB for the fiscal year ended June
                                                                    30, 1993 (File No. 0-20312).

10.17          Geographic Underwriting System Joint Service
               Agreement between Insurance Services Offices,
               Inc. and the Company, dated October 1, 1992....      Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-KSB for the fiscal year ended June
                                                                    30, 1993 (File No. 0-20312).

                                      E-3

<PAGE>

10.19          Agreement for Services between Insurance
               Services Office, Inc. and the Company
               dated August 28, 1992.........................       Incorporated by reference to the Company's
                                                                    Annual Report on Form 10-KSB for the fiscal year
                                                                    ended June 30, 1993 (File No. 0-20312).

10.21          Addendum One to Geographic Underwriting System
               Joint Service Agreement between Insurance
               Services Offices, Inc. and the Company, dated
               January 21, 1994...............................      Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-KSB for the transition period ended
                                                                    December 31, 1993 (File No. 0-20312).

10.26          Employment Agreement with Thomas R. Gay dated
               February 28, 1995..............................      Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-K for the period ended December 31,
                                                                    1994 (File No. 0-20312).

10.30          1993 VISTA Stock Option Plan...................      Incorporated by reference to the Company's
                                                                    Registration Statement on Form S-8 (File No.
                                                                    333-09417).

10.31          Agreement dated September 26, 1996 between the
               Company and Silicon Valley Bank regarding
               factoring of receivables.......................      Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-K for the period ended December 31,
                                                                    1996 (File No. 0-20312).

10.34          Agreement Regarding Board Observer dated April
               18, 1995 between the Company and Century Capital
               Partners, L.P..................................      Incorporated by reference to the Company's Quarterly
                                                                    Report on Form 10-Q for the quarter ended September
                                                                    30, 1995 (File No. 0-20312).

10.35          Equipment Lease Agreement dated August 10,
               1995 between the Company and Ally Capital
               Corporation...................................       Incorporated by reference to the Company's
                                                                    Annual Report on Form 10-K for the period ended
                                                                    December 31, 1995 (File No. 0-20312).

10.36          Asset Purchase Agreement dated February 1, 1996
               between the Company and Business Information
               Technology Inc.................................      Incorporated by reference to the Company's Annual
                                                                    Report on Form 10-K for the period ended December 31,
                                                                    1995 (File No. 0-20312).

10.37          Equipment Lease Agreement dated August 10,
               1995 between the Company and Ally Capital
               Corporation...................................       Incorporated by reference to the Company's
                                                                    Annual Report on Form 10-K for the period ended
                                                                    December 31, 1995 (File No. 0-20312).

21.1           List of subsidiaries of the Registrant.........      Filed herewith, page ___.

23.1           Consent of Independent Auditors................      Filed herewith, page ___.
</TABLE>
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