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

                                   FORM 10-KSB

                  Annual Report pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

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

                     For the fiscal year ended MAY 31, 1997

[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
        EXCHANGE ACT OF 1934

               For the transition period from_________to__________

                          Commission File No. 000-17058

                     PHOENIX INTERNATIONAL INDUSTRIES, INC.
         ---------------------------------------------------------------
         Exact name of small business issuer as specified in its charter
         

             FLORIDA                                       59-2564162
---------------------------------              --------------------------------
(State or Other Jurisdiction                   (IRS Employer Identification No.)
of incorporation or organization)

             501 SOUTH DIXIE HIGHWAY, WEST PALM BEACH, FLORIDA 33401
             -------------------------------------------------------
                    (Address of Principal Executive Offices)

                                 (561) 832-5208
                ------------------------------------------------
                (Issuer's telephone number, including area code)

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

                               Yes [X]   No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: as of March 10, 1998 there were
8,310,028 shares of the issuer's Common Stock, $.001 par value, outstanding.

Transitional Small Business Disclosure Format:

                               Yes [ ]   No [X]

                          Common Stock, $.001 par value


<PAGE>


                     PHOENIX INTERNATIONAL INDUSTRIES, INC.

                                 INDEX TO 10-KSB

                                     PART I

                                                                          PAGE
                                                                          ----

ITEM 1    DESCRIPTION OF BUSINESS                                          1
ITEM 2    DESCRIPTION OF PROPERTY                                          7
ITEM 3    LEGAL PROCEEDINGS                                                7
ITEM 4    RESULTS OF VOTES OF SECURITY HOLDERS                             8


                             PART II

ITEM 5    MARKET FOR COMMON EQUITY AND RELATED
          STOCKHOLDERS MATTERS                                             8
ITEM 6    MANAGEMENT'S DISCUSSIONS OF DISCONTINUED
          OPERATIONS                                                       9
ITEM 7    FINANCIAL STATEMENTS                                             9
ITEM 8    CHANGES IN AND DISAGREEMENTS WITH
          ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE                                             9

                            PART III

ITEM 9    MANAGEMENT AND DIRECTORS                                        10
ITEM 10   EXECUTIVE COMPENSATION                                          12
ITEM 11   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
          OWNERS AND MANAGEMENT                                           13
ITEM 12   CERTAIN RELATIONSHIPS AND RELATED
          TRANSACTIONS                                                    14
ITEM 13   EXHIBITS AND REPORTS                                            14


                                        0

<PAGE>


                                     PART I

ITEM 1            DESCRIPTION OF BUSINESS

HISTORICAL DEVELOPMENT

         The Company was incorporated on July 22, 1985, pursuant to the laws of
the State of Florida under the name "Hydrobac, Inc." On July 7, 1986, the
Company's name was changed to"ProBac,Inc.," and on October 5, 1994, its name was
changed to Trident Environmental Systems, Inc. During those periods the
Company's primary business was in various types of products and systems for use
in the environmental clean-up industry. On October 2, 1996 the Company's name
was changed to Phoenix International Industries, Inc., and the Company's Common
Stock was reverse split 15 to 1. The shareholders approved Amendments to the
Articles of Incorporation, changing the authorized capital to 20,000,000 shares
of Common Stock, par value $.001 per share; and up to 5,000 shares of Preferred
Stock for use as needed. From January 1996 through May 31, 1997, the Company
sought acquisitions as it wound down and closed its original environmental
clean-up business. The Company, therefore, treats all matters relating to the
environmental clean-up business as discontinued operations.

BUSINESS

         Today, the Company, through a wholly-owned subsidiary, Intuitive
Technology Consultants, Inc. ("ITC"), is a service provider of technical
solutions to companies seeking specialized talent in computer technology. This
encompasses software development, including resolution of the Year 2000 date
issue and other related technical areas, as well as on site staffing
augmentation for the client. The Company is divided into two (2) basic revenue
centers. First, providing software solutions on an out source basis to companies
who seek internal or commercial solutions to their business needs. These
solutions are mainly project based. Each project is developed internally by the
Company's staff of experts, and is managed by the Company until completion. The
second revenue center allows the Company to provide technically oriented staff
with select skills in computer and network engineering to a company for either
contract temporary or permanent employment by said company. The Company provides
the personnel on a fee basis (either hourly or contract, or a flat fee for
perm). The Company is not responsible in this instance for the management or
daily productivity of the project or individual.

INDUSTRY BACKGROUND

         Windows has obtained a 90% market share of available PC "desktops" in
both the home and business markets. Information Technology ("IT") staffing of
business development for software solutions and management of technologies has
reached an all time high. With such issues as the continued release of new
operating systems, the doubling of the speed of microchips every eighteen (18)
months, and new issues such as Millennium (Year 2000 date issue) facing
business, each company is competing to better not only it's own line of
products, but in the development of new technology as well. Information is power
to a company, and with ever increasing amounts of it, companies are competing to
retrieve, utilize and sell information.

         Beginning in 1993, the Internet became the focus of marketing services
and products. Companies began to realize that an inexpensive, high rate of
return on investment in the Internet could increase their market visibility
dramatically. Over the next two years, commerce over the Internet is expected to
increase over 65,000 times (Fortune Magazine).


                                        1

<PAGE>


         With such issues facing companies, the availability of individuals who
possess the technical expertise in these areas is actually decreasing yearly. In
1996 forty-eight thousand (48,000) new graduates entered the marketplace in
technical areas to fill an estimated 148,000 positions. In 1997, the number has
decreased to twenty six thousand (26,000). Businesses are finding it more and
more difficult to find the staff to meet their needs.

         In 1996, the IT Temporary Staffing Industry has been estimated to be
$46 billion with an annual growth rate of 15%. With business continuing to
invest larger amounts in their IT departments, both in new development and
redeployment of solutions to the Millennium issues, growth in the industry is
expected to continue at the current pace for the next 10 years (Fortune
Magazine).

COMPANY'S OUT SOURCE PROJECT DEVELOPMENT & IMPLEMENTATION

         In an effort to curb the increasing costs of developing technology
solutions, companies are outsourcing their IT projects at an ever increasing
rate. The Company provides these services, by offering a business the
opportunity to complete their IT projects, with no fixed employee costs, office
costs, or other expenses.

         The Company provides the top systems engineers, network specialists and
systems architects, making these resources available to a company by managing an
IT project from beginning to end. The Company uses proven methodologies
including the latest in Client/Server, Object Oriented system design and
implementation to achieve a total solution for its clients.

         In a new service entitled "Millennium and Business Exposure Analysis",
the Company delivers system re-engineering processes, which includes
rectification of the Millennium (Year 2000) "bug". It provides this service at
three basic levels:

         (i)   A business structure analysis is implemented, which incorporates 
a complete technical analysis of the current system(s) utilized by the client;

         (ii)  A hardware analysis to determine if the equipment is capable of
handling the Millennium (Year 2000) change; and

         (iii) Total business exposure, which involves scrutinizing the client's
vendors and, in appropriate cases, its customers, to insure that all interaction
between vendor, client and customer of client computer systems will achieve
Millennium compliance.

         With experts in so many diverse areas, there is little the Company
cannot provide. Whether the project consists of a team of software engineers to
create a new solution, or redevelop an antiquated system in a newer technology,
the Company provides all levels of service. Through a process using the methods
of Rapid Application Development (RAD) and Joint Application Development (JAD)
both of which have been developed over the last ten (10) years by such
individuals as Rambaugh and Booch, the Company is able to obtain its customers
specific IT needs, and provide quick, effective solutions to those needs at a
substantially lower cost than a company would be able to provide if the project
were managed internally.

                                        2

<PAGE>


STAFFING

         Many companies choose not to outsource their business development
projects for IS. The Company, as a value added service to our customers,
provides personnel with a vast array of technical backgrounds, to allow its
customers to develop, implement, support and distribute software and technical
services internally. The Company has developed an extensive database of
resources for technical personnel to provide to these customers. The Company
acts as a "broker" or headhunter, providing three levels of service. First, the
Company provides temporary employees (Contractors), billed hourly by the Company
to the customer. These employees work at the customer's location under the
direct management of the customer. Each employee submits a time card to the
Company signed by the employee's direct supervisor. The Company uses this time
card to bill the customer. Invoices are generated weekly. The second service
level for staffing is permanent, whereby the Company introduces the customer to
the technical specialist, and the customer hires the person directly, with the
Company receiving a negotiated fee based on the number of requirements and
exclusivity. Further, many clients place "caps" on the Company's fees. This fee
is billed on the first date of employment of the technical specialist and is due
on net 30 day terms. The third and final level of staffing service is Contract
to Perm (C to P). In this scenario, the Company provides the technical
specialist for a period of time on a temporary basis (billed hourly to the
customer). Following this initial period, the customer hires the technical
specialist from the Company for a flat fee based on the salary at which the
technical specialist is hired. This fee is calculated on a "sliding" scale. The
longer the specialist is provided to the customer on a temporary basis, the
lower the final fee.

         According to Contact Professional Magazine, the recruiting and staffing
industry will reach over 46 billion dollars in revenue this year. CNN stated
that only 26,000 technical graduates will enter the market place this year (down
from 48,000 last year). However, over 128,000 positions are open in the US
Market. This high demand for talent forces companies to use outside resources to
research, locate, screen and provide highly skilled technical labor. The Company
uses this leverage in the market to seek the upper echelon of technical staff.
The Company utilizes extensive testing, multiple interviews and background
checks (including drug and criminal if requested by the customer), to ensure
that the customer receives the best available individual for their specific
position.

TRAINING

         As an additional service to its customers, the Company provides
classroom style training in the latest technologies. Because most businesses
have a staff of varied technical skills, the Company provides multiple levels of
training from beginner to advanced. It can provide Microsoft Certified trainers
if requested, to allow a student certification in the area desired by the
client, or provide informal training for companies wishing to better educate
their employees while maintaining a lower cost basis. Each student receives
individual attention in the class. State of the art, multimedia computers are
provided by the Company in the class, allowing students to work along with the
instructor for better understanding of the technology being taught. Languages,
database design and maintenance, operating systems and commercial software are
among the types of technology instructed.

         When the Company provides project development to a customer, the
Company includes classroom training during the implementation phase. The Company
takes the customer's employees through the application, demonstrating the
capability and limitations of the product, to ensure that each employee of the
customer provides the highest level of productivity to the customer upon
learning the new application.

                                        3

<PAGE>


This important addition to the Company's services separates the Company from
its competitors, ensuring that every implementation of new technology is
successful for the customer following delivery by the Company.

SUPPORT

         Upon delivery of a new application, the Company provides its customer
with ongoing support for their new system(s). The Company charges either a
monthly or annual fee for this service, which is automatically renewed until the
customer terminates. These support services may include a help desk staffed by
employees (technical specialists) of the Company provided to the customer at
their location for extended services including on site training and employee
assistance, or technical assistance to the customers internal technical staff to
support and instruct on the methods of software development used by the Company
during implementation. Additionally, the Company may provide hardware support
through the use of external vendors as a value added service to its customers.

STRATEGY

         The Company's objective is to continue to be a leading provider of
information technology services and to further expand its presence in the
industry. To achieve these objectives, the Company has adopted the following
strategies:

         Strategic Alliances. The Company utilizes the services of other
companies which provide similar services throughout the United States, allowing
the Company to grow its marketing efforts with little or no capital expenditure.

         New Service Development. The Company intends to continue to pursue new
avenues in the technology industry, and offer new and innovative services to its
customers as these new technologies emerge.

         Sales and Marketing Presence. The Company intends to expand its
marketing presence through the use of print and advertising media, direct mail
and expansion of the Company's sales force through growth and acquisition.

MANAGEMENT

         The Company employs recognized leaders in the industry to act as
management support to its customers, staff and affiliates. The Company utilizes
extensive screening processes beyond what the Company believes is normal for the
industry in order to obtain only the most experienced, well rounded, technically
proficient personnel to lead its efforts.

         Each member of the Company's Management team brings years of experience
to their area of expertise, allowing the Company to manage its projects and
staff by example. Management is hands on, further leveraging the resources and
skills of the management team. This is accomplished through example, ensuring
that all employees of the Company work as a cohesive unit with a common vision
and goal, that being the mission and vision of the Company.

                                        4

<PAGE>


CUSTOMERS

         Employing a staff of no less than seven (7) marketing and accounting
representatives, the Company obtains most of its clientele through direct
marketing including cold call, telemarketing and referral. The Company customers
are primarily businesses using technology on an ongoing basis with a focus on
realized gains through investment in information technology.

         The Company targets large corporation with extensive IS/IT departments.
The average sale at the Company consists of multiple levels of service,
including project management and internal development, staffing augmentation and
training. The Company provides both fixed bid and hourly time and billing
methods of revenue generation. This allows flexibility with its customers.

         For staffing services, the Company targets the Human Resource or
Project Management level at the customer. For project outsource development, the
Company targets executive level personnel. These persons are normally CFO, CEO
or CIO status, those normally in charge of the actual budget and scope of the
project.

SALES AND MARKETING

         The Company currently markets its services through a direct sales force
in the US. The Company conducts comprehensive marketing programs that include
telemarketing, public relations, direct mail, advertising, seminars, and ongoing
customer communication programs. The Company is currently on many bidding lists,
which affords it the opportunity to receive Requests for Proposals ("RFP's")
from multiple companies seeking the services it renders. Sales and marketing
personnel are located at the Company's headquarters in Duluth, Georgia.

         The Company obtains sales leads through referral, advertising,
seminars, and relationships with industry personnel. A typical sales cycle in
software project development begins with the generation of leads or the receipt
of a request for proposal ("RFP") from a prospective customer. After
qualification of the sales lead and analysis of the general requirements of the
customer, a two phase implementation proposal is created. The first phase being
that of specific information gathering, requirements definition, prototype and
functional definition and, following acceptance, a complete pricing structure
and proposal with implementation plan. The first proposal generally describes
the services the Company will provide, as well as expected milestones for
measurement of success as well as payment schedules, expected delivery schedules
and other related information. The final proposal includes specific project
definition, which includes definitive system requirements. The Company continues
"reselling" the customer on new additions to the product following completion of
the initial scope. The additions are normally generated by identification by the
Company of new solutions to customer problems.

         The sales cycle for staffing usually begins with a telemarketing call
or referral. The Company informs the potential customer of the methods and
services it provides. Following agreement by the customer for the Company's
staffing services, the customer executes a blanket "Staffing Agreement" with the
Company which outlines all terms and conditions for services including
guarantees, payment and invoicing terms and other related matters. For each
person the Company supplies, the Company executes an attachment to the Staffing
Agreement which specifically states the additional terms and conditions of the
employment of the technical specialist the Company is providing. This will
include rates, billing and length of service.

                                        5

<PAGE>


         The Company has entered into agreements with similar companies through
"Affiliate Agreements". These agreements allow the Company to share their vast
resources of technical personnel on a "split fee" basis. The Company provides
the personnel and shares the revenue with the affiliate company, retaining the
technical person on its staff.

         In all cases, the Company maintains strict non-compete, non-solicit and
non-disclosure agreements with both its employees and customers.

PRODUCT DEVELOPMENT AND NEW SERVICES

         In an effort to continue to expand its client base, the Company engages
in the pursuit of new opportunities for services. Currently, the Company is
offering a new "Leased Resource" plan in answer to the demand for Year 2000
personnel. Because companies are not likely to be able to meet the demand they
will have for specialists in Millennium issues during 1999 and 2000, the Company
is offering its customers the option of prepaid leasing of the required
specialist on a reserved basis. The "contractor" is committed to serve this term
during the Millennium change. This offers our customer the ability to secure
resources which will not be available under normal conditions. The Company also
continues to expand its knowledge base and expertise as new technologies emerge.
Currently the Company is expanding its services in the Internet Webmaster,
providing experts to customers whose skills are highly specialized in the new
areas of the Internet including Web Design, Commerce, and Public Relations.

COMPETITION

         Many similar companies, both large and small, offer similar services as
the Company. However, few offer them under one umbrella. The Company
differentiates itself from its competition by the deep experience of its
personnel, its solid references and the ability to deliver effective solutions
on time, every time.

         There are limited numbers of software development firms in the market
who can be considered key players. Because of the Company's reputation as a true
solutions provider, the Company is able to grow, and has been selected over its
competition more than 70% of the time. This despite of many of the Company's
competitors having greater name recognition, more extensive management and
marketing capabilities, and significantly greater financial, technological and
personnel resources than the Company.

         The Company believes that the competitive factors affecting its markets
include features such as project management openness, system scalability, the
ability of system solutions to integrate with third party products,
functionality, adaptability, ease of use, quality, performance, price, customer
service and support, effectiveness of sales and marketing efforts and Company
reputation. Although the Company believes that it currently competes favorably
with respect to such factors, there can be no assurance that the Company can
maintain its competitive position against current and potential competitors
especially those with greater financial, marketing support and other resources
than the Company.

TRADEMARKS, COPYRIGHTS AND PATENTS

         The Company owns two patents for solidification of environmental waste,
which were acquired when the Company was involved in that business. However, the
Company is no longer in such business and it is believed by the Company that
these patents are of very little value today, as they have been

                                        6

<PAGE>


rendered obsolete due to the rapid development of the environmental industry.
ITC and HDX hold copyrights on the software developed by each of them. However,
due to the nature of software, placing a value on these copyrights is virtually
impossible.

EMPLOYEES

         As of May 31, 1997, the Company had 4 employees. In March, 1998, the
Company has 36 employees.

SUBSEQUENT EVENTS

         On June 1, 1997, the Company acquired Intuitive Technology Consultants,
Inc. headquartered in Atlanta, Georgia.

         In consideration therefore, the Company issued 1,500,000 shares of its
"restricted" Common Stock to the former shareholders of ITC in exchange for
100% (1,000,000 shares) of the authorized and issued stock of ITC.

         On July 21, 1997 the Company in a "stock for stock" transaction,
completed the acquisition of 100% of the stock of HDX 9000, Inc. (HDX), of New
York, New York. In consideration therefore, the Company issued 500,000 shares of
its "restricted" Common Stock to the former shareholders of HDX in exchange for
100% (1,500 shares) of the authorized and issued stock of HDX.

ITEM 2   DESCRIPTION OF PROPERTY

         The Company's principal place of business is located at 501 South Dixie
Highway, West Palm Beach, Florida 33401, which consists of office and warehouse
space. This space aggregates approximately 3,500 square feet including four
offices and a conference room. The lease cost is $3,500.00 per month, plus
expenses, expiring in June, 1998. HDX, a wholly-owned Phoenix subsidiary, shares
the space.

         The ITC subsidiary rents 10,153 square feet at 3700 Crestwood Parkway,
Suite 1000, Duluth, Georgia 30096. The rent is $17,979 per month, under a seven
year lease which expires in February, 2005. However, ITC pays approximately
one-half rent, or $9,125.10 per month for the first year.

         Both of these offices are rented from unrelated third parties.

ITEM 3   LEGAL PROCEEDINGS

         There are no material pending legal proceedings to which the Company
(or any of its Officers and Directors in their capacities as such) is a party or
to which the property of the Company is subject and no such material proceeding
is known by management of the Company to be pending.

                                        7

<PAGE>


ITEM 4   RESULTS OF VOTES OF SECURITY HOLDERS

         No votes taken during Fiscal 1997.

                                     PART II

ITEM 5   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

         The following table sets forth the range of high and low bid prices as
reported on the OTCBB during the periods commencing:

                                   CLOSING BID                  CLOSING ASK
                                HIGH          LOW            HIGH         LOW
                                ----          ---            ----         ---
                              
1995:
-----
07/03/95 through 09/29/95       3.28          .15            6.56         .93
10/02/95 through 12/29/95       4.21          .15            7.03         .93

1996:
-----
01/02/96 through 03/29/96       1.20          .15            1.95         .60
04/01/96 through 06/28/96        .22          .07             .60         .22
07/01/96 through 09/18/96        .30          .11             .75         .37
09/19/96 through 09/30/96       1.125         .375           1.50         .625
10/01/96 through 12/31/96       1.50          .25            2.375        .75

1997
----
01/02/97 through 03/31/97       1.50          .6875          2.375       1.00
04/01/97 through 06/30/97       1.4375        .625           1.687        .875
07/01/97 through 09/30/97       2.375        1.125           2.625       1.375
10/01/97 through 12/31/97       2.25          .46            2.625        .875

         The price of shares have been adjusted for all stock splits.

DIVIDENDS

         The Company has paid no dividends during the past five fiscal years on
any class of its issued and outstanding securities.

         The payment by the Company of dividends, if any, in the future rests
within the discretion of its Board of Directors and will depend, among other
things, upon the Company's earnings, its capital requirements and its financial
condition, as well as other relevant factors. By reason of the Company's present
financial condition, the Company does not contemplate or anticipate paying any
dividends upon the Common Stock in the foreseeable future.

                                        8

<PAGE>


COMPANY CAPITALIZATION

         There are 20,000,000 shares of Common Stock authorized for issuance. Of
this amount, 8,310,028 shares are currently issued and outstanding. There are
5,000 shares of Preferred Stock authorized, the designation and rights of which
are to be determined by the Board of Directors, none of which are issued and
outstanding.

ITEM 6   MANAGEMENT'S DISCUSSIONS OF DISCONTINUED OPERATIONS

         On August 4, 1994, the Board of Directors approved a 1 for 10 reverse
split of the outstanding shares of Common Stock of ProBac International
Corporation. The reverse split was completed on September 11, 1994. The Board of
Directors increased the Company's authorized capital to 50,000,000 shares of
Common Stock and up to 5,000 shares of Preferred Stock for use as needed.

         On the February 28, 1995 Balance Sheet, the Company had $5,316,403
worth of assets. Upon new management taking over in 1996, it was determined that
$5,189,263 of these assets were valueless and the Company wrote-off said assets
(See attached Notes to the Financial Statements). After the write-off, the
Company was left with $211,000 of liabilities without the assets to adequately
offset them. Subsequently, as of the date of this report, the Company has
settled those liabilities.

         With regard to the Statements of Operations for the year ending May 31,
1997, the Company had zero revenue and $230,000 of expenses with respect to the
discontinued operations.

ITEM 7   FINANCIAL STATEMENTS

         The Company's audited consolidated financial statements immediately
follow the signature page to this Form 10-KSB.

ITEM 8   CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE

     None

                                        9

<PAGE>


                                    PART III

ITEM 9   MANAGEMENT AND DIRECTORS

         The current Management and Directors of the Company as of February,
1998 are as follows:


NAME                      AGE       POSITION(S)                NUMBER OF SHARES
----                      ---       -----------                ----------------

Gerard Haryman            54        President, CEO and             300,000
                                    Chairman of the Board
                                    of Directors

Tom Donaldson             55        Vice President, Secretary       13,333
                                    and Director

Harvey Birnholz           59        Treasurer, CFO and             224,000*
                                    Director

Timothy Palmer            55        Director                        50,000

Scott Schuster            34        Director                     1,119,000

*        Seventy-four thousand (74,000) shares are owned directly and 150,000
shares through his interest in a limited partnership.

         Set forth below is a brief background of the executive officers and
directors of the Company, based on information supplied by them.

         GERARD HARYMAN, has been Chairman of the Board, President and Chief
Executive Officer of the Company since January 1996. Concurrently, until
September 1996, he was President of American Diversified Group, Inc., a public
company based in West Palm Beach, Florida, importing and exporting
pharmaceuticals. Since June 1994 to the present, Mr. Haryman has been President
of Aptek Communications, Inc., a private company, based in West Palm Beach,
Florida in the business of selling and servicing portable computers. From
January 1994 to the present he has been President of Aspen Marine Group, boat
builders and distributer of Portable computers, a public company in West Palm
Beach, Florida that is currently in Chapter 11 Bankruptcy proceedings. Mr.
Haryman is one of about 20 defendants in a lawsuit brought by the Trustee of
Aspen and believes that the lawsuit will have no adverse consequences to the
Company. Since 1981 to the present, he has been President and CEO of SA, Sitmo,
developers and builders of commercial and residential properties, with corporate
offices in Paris, France. In the period from March 1995 to September 1995, Mr.
Haryman was Chairman of Life Industries, Inc., a public company, which intended
to import mineral water and other products from Mexico, which did not
materialize, leading to his resignation from the Board. Mr. Haryman was a
Finance Major at the Institute General de Finance in Paris, France.

         He devotes approximately 95% of his time to the business of the
Company.

         TOM DONALDSON, has been Vice President, Director of Operations and a
Director of the Company (formerly Trident Environmental Systems, Inc.) since
February 1993. In December 1995, Mr. Donaldson filed for Personal Bankruptcy
under Chapter 7 of the Act. The bankruptcy was discharged in February

                                       10

<PAGE>


of 1996. From March 1996 to March 1997, he was Assistant Manager, Marketing for
CCS Financial, Inc., a finance company in Ft. Lauderdale, Florida. In the period
January 1991 to February 1993, he was Director of Marketing for Professional
Locators, Inc., a placement firm in Boca Raton, Florida. Mr. Donaldson attended
the University of Paris (Sorbonne) and the University of Miami.

         HARVEY BIRNHOLZ, has been Treasurer, Chief Financial Officer and a
Director of the Company since October 1997. From August 1990 to August 1997, he
was a Special Investigator and Corporate Auditor for the Florida Department of
Revenue and a Federal and State Tax Consultant on business evaluations. In the
period January 1995 to June 1995, he was Comptroller for nine separate Ladies
Health Centers, and from May 1961 to August 1990 (Retired), he was a Supervising
Agent for the Internal Revenue Service of the United States. Mr. Birnholz holds
a BBA degree in Accounting and Finance from the University of Miami and attended
one year of Law School at the same institution.

         TIMOTHY PALMER, has been President of HDX 9000, Inc., West Palm Beach,
Florida, a computer and business consulting firm since October 1993, now a
wholly-owned subsidiary of the Company, and a Director of the Company since July
1997. From March 1997 to the present, he has been President of Quality
Advantage, Ltd. of Kingston, Jamaica, a computer and business consulting firm.
Prior to October 1993, he was manager of the Palmer Family Trust in London,
England. Mr. Palmer holds a Bachelor of Commerce Degree from McGill University
in Montreal, Canada.

         SCOTT SCHUSTER, has been President and Chief Executive Officer of
Intuitive Technology Consultants, Inc., Atlanta, Georgia since August 1996, a
wholly-owned subsidiary of the Company, and a Director of the Company since June
1977. In early 1995, Mr. Schuster filed for Personal Bankruptcy under Chapter 7
of the Act. The bankruptcy was discharged in June 1995. From January 1990 to
August 1996, Mr. Schuster was an independent computer programmer and consultant.

OPTIONS & WARRANTS

         As of March, 1998, there are no options, warrants, rights, etc., of any
kind outstanding.

STOCK OPTION PLAN

         As of May 31, 1997, and currently, the Company has no stock option plan
for its employees.

                                       11

<PAGE>


ITEM 10  EXECUTIVE COMPENSATION

         During fiscal year 1997, the Company had one employee earning in excess
of $100,000 (see chart below).

                           SUMMARY COMPENSATION TABLE

                                                                 LONG-TERM
                                                                COMPENSATION
                                                           ---------------------
                           ANNUAL COMPENSATION                     AWARDS
                       ----------------------------        ---------------------
     NAME AND                                              SECURITIES UNDERLYING
 PRINCIPAL POSITION    YEAR     SALARY        BONUS                OPTIONS
 ------------------    ----     -------       -----        ---------------------

Markus A. Gertsch      1995    $ 30,000        -0-                  13,334

Gerard Haryman,        1996     250,000 (1)    -0-                   -0-
President & CEO

Gerard Haryman,        1997     250,000 (1)    -0-                   -0-
President & CEO

Scott Schuster,        1997     160,000        -0- (2)                -0-
President & CEO
Intuitive Technology
Consultants, Inc.

(1) Due to the cash position of the Company during 1996, 1997 and to date in
1998, Mr. Haryman has deferred payment of his salary. Since he became CEO in
1996, Mr. Haryman has received payments of $0.00.

(2) Mr. Schuster's employment commenced on June 1, 1997, the first day of fiscal
1998. He is entitled to a quarterly bonus based on the net profit of ITC. To
date, ITC has not had a profitable quarter.

EMPLOYMENT AGREEMENTS

     Gerald Haryman and Thomas Donaldson have Employment Agreements with the
Company. Scott Schuster has an Employment Agreement with ITC.

COMPENSATION OF DIRECTORS

     Each outside Director of Phoenix will receive 2,000 shares of Common Stock
for each year of service plus reimbursement of out-of-pocket expenses.
Currently, the Company has no outside Directors.

                                       12

<PAGE>


ITEM 11  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND  MANAGEMENT

PRINCIPAL SHAREHOLDERS

         The following table sets forth certain information, as of February,
1998, regarding the Company's Common Stock owned of record or beneficially by
(i) each stockholder who is known by the Company to beneficially own in excess
of 5% of the outstanding shares of Common Stock; and (ii) all Directors and
executive officers as a group. Except as otherwise indicated, each stockholder
listed below has sole voting and investment power with respect to shares
beneficially owned by such person.

         In accordance with Rule 13d-3, promulgated under the Securities
Exchange Act of 1934, as amended, shares that are not outstanding but that are
issuable within 60 days upon exercise of outstanding options, warrants, rights
or conversion privileges or which are otherwise required by Rule 13d-3 to be
included have been deemed to be outstanding for the purpose of computing the
percentage of outstanding shares owned by the person owning such right, but have
not been deemed outstanding for the purpose of computing the percentage for any
other person. Currently, there were 8,310,028 shares of Common Stock issued and
outstanding and no options, warrants, etc. are outstanding.

                                              COMMON STOCK

                                            AMOUNT AND NATURE
                                             OF BENEFICIAL         % OF
NAME AND ADDRESS                               OWNERSHIP           CLASS
----------------                            -----------------      -----

Gerard Haryman
501 South Dixie Highway
West Palm Beach, FL 33405                       300,000             3.61

Tom Donaldson
501 South Dixie Highway
West Palm Beach, FL 33405                        13,333             0.16

Harvey Birnholz
301 Dunwoody Lane
Hollywood, FL 33301                            224,000              4.50

Timothy Palmer
501 South Dixie Highway
West Palm Beach, FL 33401                       50,000              0.60

Scott Schuster
3700 Crestwood Parkway, Suite 1000
Duluth, GA 30096                             1,119,000             13.47
                                            ----------             -----

All Directors and Officers
as a Group (5 persons)                       1,706,333             20.54

                                       13

<PAGE>


ITEM 12  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In June 1995, the Company received a loan in the amount of Two Hundred
Forty Thousand Dollars ($240,000) from Markus A. Gertsch, then Chief Executive
Officer of the Company. The loan was for a term of three years at twelve and
one-half percent (12 1/2%) simple interest.

         In September 1995 the Company received a loan of Thirty Thousand One
Hundred Thirty-Four Dollars ($30,134) from Mr. Gertsch. This loan was for twelve
(12) months.

         Both of these loans were repaid to Mr. Gertsch by the issuance of
220,000 shares of the Company's Common Stock. These shares have not been
registered under the Securities Act of 1933.

ITEM 13  EXHIBITS AND REPORTS

         See index of required exhibits and attachments thereto.

                                       14

<PAGE>

                                INDEX TO EXHIBITS

(2)  PLAN OF ACQUISITIONS, REORGANIZATION, ARRANGEMENT, LIQUIDATION, OR 
     SUCCESSION.
           Not applicable

(3)  ARTICLES OF INCORPORATION AND BY-LAWS.
         The Articles of Incorporation and Articles of Amendment to the Articles
         of Incorporation and By-Laws of the Registrant were filed as Exhibits
         3.1, 3.2, and 3.3, respectively, to the Registrant's Form 10-KSB, for
         the fiscal year 1995, under the Securities and Exchange Act of 1934,
         filed April 1, 1998, with the Securities and Exchange Commission
         and are incorporated herein by reference.

(4)  INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS.
         Not applicable

(9)  VOTING TRUST AGREEMENT.
         Not applicable

(10) MATERIAL CONTRACTS.
         The Material Contracts of the Registrant were filed as Exhibits 10.1,
         10.2, 10.3, 10.4, and 10.5, respectively, to the Registrant's Form
         10-KSB as of May 31, 1995 under the Securities and Exchange Act of
         1934, filed April 1, 1998 with the Securities and Exchange
         Commission and are incorporated herein by reference.

(11) STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS.
         Not applicable

(13) ANNUAL OR QUARTERLY REPORTS, FORM 10-Q.
         Not applicable

(16) LETTER RE: CHANGE IN CERTIFYING ACCOUNTANTS.
         Not applicable

(18) LETTER REGARDING CHANGE IN ACCOUNTING PRINCIPALS.
         Not applicable

(21) SUBSIDIARIES OF THE REGISTRANT.

(22) PUBLISHED REPORT REGARDING MATTERS SUBMITTED TO VOTE.
         Not applicable

(23) CONSENT OF EXPERTS AND COUNSEL.
         Not applicable

(24) POWER OF ATTORNEY.
         Not applicable

(27) FINANCIAL DATA SCHEDULE.

(99) ADDITIONAL EXHIBITS.
         Not applicable

                                       15

<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of West Palm Beach,
Florida on March 31, 1998.

                                         PHOENIX INTERNATIONAL INDUSTRIES, INC.

                                         By: /s/ Gerard Haryman
                                            ---------------------------------
                                            Gerard Haryman, President and CEO

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

    SIGNATURE                     TITLE                        DATE
----------------       --------------------------        ------------------

/s/ Gerard Haryman
--------------------   President, CEO and                March 31, 1998
Gerard Haryman         Chairman of the Board


/s/ Tom Donaldson
--------------------   Vice President, Secretary         March 31, 1998
Tom Donaldson          and Director


/s/ Harvey Birnholz
--------------------   Treasurer, CFO and                March 31, 1998
Harvey Birnholz        Director


/s/ Timothy Palmer
--------------------   Director                          March 31, 1998
Timothy Palmer


--------------------   Director                          March 16, 1998
Scott Schuster

                                       16

<PAGE>

                     PHOENIX INTERNATIONAL INDUSTRIES, INC.
                           (Development Stage Company)

               INDEX TO FINANCIAL  STATEMENTS  AND  SCHEDULES

FINANCIAL STATEMENTS                                            PAGE NUMBERS

     Report of Independent Certified Public Accountants             F-2

     Balance Sheets at May 31, 1997 and May 31, 1996                F-3

     Statements of Operations for the fiscal years ended            F-4
          May 31, 1997, May 31, 1996 and May 31, 1995

     Statements of Changes in Stockholders' Equity
          for the fiscal years ended  May 31, 1997,
          May 31, 1996  and  May 31, 1995                           F-5 to F-6

     Statements of  Cash Flows for the fiscal years ended
          May 31, 1997, May 31, 1996 and May 31, 1995               F-7

     Notes to Financial Statements                                  F-8 to F-14

     All other schedules are omitted because they are not applicable or the
     required information is shown in the financial statements or notes thereto.


<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board if Directors and Stockholders of Phoenix International Industries,
Inc.

In our opinion, the financial statements listed in the acompanying index present
fairly, in all material respects, the financial position of Phoenix
International Industries, Inc. and its subsidiariesat May 31, 1997 and May 31,
1996, and the results of their operations and their cash flows for each of the
three years in the period ended May 31, 1997, in conformity with generally
accepted accounting principles. 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 of these statements in accordance with genereally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

LEON P. WILDE, CPA, INC.

Lake Worth, FL
February 1, 1998

                                      F-2

<PAGE>


PHOENIX  INTERNATIONAL INDUSTRIES,  INC.
       ( Development  Stage  Company )
BALANCE SHEET
        (000's omitted)
        ASSETS

                                                              MAY 31,   MAY 31,
                                                               1997      1996
                                                             -------    -------
Current Assets:
      Cash                                                   $     1    $     0
      Notes Receivable                                            27         30
                                                             -------    -------
               Total current assets                               28         30

      Net Deferred Tax Asset                                   1,034        922
      Property & Equipment, net                                   10          0
      Patents and trademarks                                       1          1
                                                             -------    -------
                                                             $ 1,073    $   953
                                                             =======    =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
      Accounts payable                                       $     5    $    42
      Accrued wages                                              333         83
      Notes payable                                              106        250
                                                             -------    -------
               Total liabilities                                 444        375
                                                             -------    -------
Commitments and contingencies                                      0          0
                                                             -------    -------
Stockholders' equity
     Common stock, $.001 par value, 20,000 authorized,
     4,960 issued and outstanding (888 in 1996)                    5        133
      Paid in capital                                          3,693      3,160
      Less: Stock subscriptions receivable                       (23)         0
      Accumulated deficit                                     (3,046)    (2,715)
                                                             -------    -------
               Total stockholders' equity                        629        578
                                                             -------    -------
                                                             $ 1,073    $   953
                                                             =======    =======

The accompanying notes are an integral part of these financial statements.

                                      F-3

<PAGE>
<TABLE>
<CAPTION>

PHOENIX  INTERNATIONAL INDUSTRIES,  INC.
       ( Development  Stage  Company )
STATEMENTS OF OPERATION
               ( 000's omitted)

                                    FOR THE FISCAL   FOR THE FISCAL  FOR THE FISCAL
                                      YEAR ENDED       YEAR ENDED      YEAR ENDED
                                     MAY 31, 1997     MAY 31, 1996    MAY 31, 1995
                                    --------------   --------------  --------------
<S>                                 <C>              <C>             <C>
Revenues:

     Revenue                            $     0         $     0         $     0
                                        -------         -------         -------
Expenses:
      General and administrative              0               0               0
                                        -------         -------         -------

Income(Loss) before income taxes              0               0               0

Income Tax Benefit(Provision)                 0               0               0
                                        -------         -------         -------
Net Income(Loss)continuing operations         0               0               0

Discontinued Operations:
      Income(Loss) from discontinued
      operations                           (443)           (249)           (308)

Income Tax Benefit(Provision)               112              63              78
                                        -------         -------         -------

Net Income (loss)                       $  (331)        $  (186)        $  (230)
                                        =======         =======         =======

Income(Loss) per share from:
      Continuing Operations                0.00            0.00            0.00
      Discontinued Operations             (0.11)          (0.02)          (0.11)
                                        -------         -------         -------
                                        $ (0.11)          (0.02)          (0.11)
                                        =======         =======         =======
Weighted average number of shares         2,908           8,169           2,105
</TABLE>


The accompanying notes are an integral part of these financial statements.

                                      F-4

<PAGE>
<TABLE>
<CAPTION>


PHOENIX  INTERNATIONAL INDUSTRIES,  INC.
       ( Development  Stage  Company )
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
               ( 000's omitted)

                                COMMON  STOCK

                              NUMBER OF    PAR     PAID IN    ACCUMULATED
                               SHARES     VALUE    CAPITAL      DEFICIT       TOTAL
                              ---------   -----    -------    -----------     -----
<S>                             <C>       <C>       <C>         <C>           <C> 
Balance  May 31, 1994           1,193     $  12     $2,993      ($2,299)      $706

Issuance of Common Stock        1,824        18         19                      37
(Cumulative)

Net income (loss)                                                  (230)      (230)
                              -------     -----     ------      -------       ----

Balance May 31, 1995            3,017     $  30     $3,012      ($2,529)      $513

Issuance of Common Stock       10,303       103        148                     251
(Cumulative)


Net income (loss)                                                  (186)      (186)
                              -------     -----     ------      -------       ----

Balance  May 31, 1996          13,320     $ 133     $3,160      ($2,715)      $578
</TABLE>


The accompanying notes are an integral part of these financial statements.

                                      F-5

<PAGE>
<TABLE>
<CAPTION>


PHOENIX  INTERNATIONAL INDUSTRIES,  INC.
       ( Development  Stage  Company )
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
               ( 000's omitted)

                                              COMMON  STOCK

                                            NUMBER OF    PAR      PAID IN   ACCUMULATED
                                             SHARES     VALUE     CAPITAL      DEFICIT      TOTAL
                                            ---------   -----     -------   -----------     -----
<S>                                          <C>        <C>       <C>       <C>             <C> 
Balance  May 31, 1996                        13,320     $ 133     $3,160      ($2,715)      $578


Reverse Split 1:15 on September 5,1996      (12,432)


Change in Par Value on October 2, 1996                   (132)       132


Issuance of Common Stock                      4,072         4        401                     405
(Cumulative)

Less: Stock Subscriptions
         Receivable                                                  (23)                    (23)

Net income (loss)                                                                (331)      (331)
                                            -------     -----     ------      -------       ----

Balance May 31, 1997                          4,960     $   5     $3,670      ($3,046)      $629
                                            =======     =====     ======      =======       ====
</TABLE>


The accompanying notes are an integral part of these financial statements.

                                      F-6

<PAGE>
<TABLE>
<CAPTION>

PHOENIX  INTERNATIONAL INDUSTRIES,  INC.
       ( Development  Stage  Company )
STATEMENTS  OF  CASH FLOWS
               ( 000's omitted)                              FOR THE FISCAL      FOR THE FISCAL     FOR THE FISCAL
                                                               YEAR ENDED          YEAR ENDED         YEAR ENDED
                                                              MAY 31, 1997        MAY 31, 1996       MAY 31, 1995 
                                                             --------------     ---------------     --------------
<S>                                                          <C>                <C>                 <C>
Cash flows from operating activities
      Net income(loss)                                           $   0              $   0              $   0
      Adjustment to reconcile net income(loss)
               to net cash(used by)provided by
               operating activities:
      Depreciation an amortization                                   2                  0                  0
Changes in assets and liabilities
      (Increase)Decrease in notes receivable                         3                (30)               157
      (Increase)Decrease in net deferred tax asset                (112)               (63)               (78)
      Increase(Decrease) in accounts payable                       (37)              (169)               (23)
      Increase(Decrease) in accued wages                           250                 83                  0
      Increase(Decrease) in notes  payable                        (144)                10                240
                                                                 -----              -----              -----
Net cash (used by) provided by operating activities:               (38)              (169)               296
                                                                 -----              -----              -----
Cash flows from investing activities:
      Disposition of Property and Equipment                        (12)                 0                  0
      Income(loss) Discontinued Operations                        (331)              (186)              (230)
                                                                 -----              -----              -----
Net cash (used by) provided by investing activities               (343)              (186)              (230)
                                                                 -----              -----              -----

Cash flows from financing activities:
      Issuance of common stock                                     405                251                 37
      Less: Stock subscriptions receivable                         (23)                 0                  0
                                                                 -----              -----              -----
Net cash (used by) provided by financing activities                382                251                 37
                                                                 -----              -----              -----

Net (decrease)increase in cash and cash equivalents                  1               (104)               103
      Cash and cash equivalents at beginning of year                 0                104                  1
                                                                 -----              -----              -----
      Cash and cash equivalents at end of year                   $   1              $   0              $ 104
                                                                 =====              =====              =====
</TABLE>


The accompanying notes are an integral part of these financial statements.

                                      F-7

<PAGE>


PHOENIX  INTERNATIONAL INDUSTRIES,  INC.
       ( Development  Stage  Company )
NOTES TO FINANCIAL STATEMENTS
               ( 000's omitted)

1.       BUSINESS AND ORGANIZATION

BUSINESS

         The Company is engaged, through its wholly-owned subsidiaries, in
computer and software development, consulting and other related services.
Previously the Company was involved in various types of products and systems for
use in the environmental clean-up industry. From January 1, 1996 through May 31,
1997, the Company wound down and closed its environmental clean-up business and
sought the acquisitions of computer consulting companies.

ORGANIZATION

         The Company was incorporated on July 22, 1985, pursuant to the laws of
the state of Florida under the name Hydrobac, Inc. On July 7, 1986, the
Company's name was changed to Probac, Inc. and on October 5, 1994, its name was
changed to Trident Environmental Systems, Inc. During those periods the
Company's primary business was in various types of products and systems for use
in the environmental clean-up industry. The Company closed its original clean-up
business by May 31, 1997 and therefore, treats all matters relating to the
environmental clean-up business as discontinued operations.

         On January 18, 1996 the chief executive officer of the Company resigned
as Director of the Company. The reason for the resignation was personal and
there was no disagreement concerning any matters relating to the Company's
operations, policies or practices. Also on January 18, 1996, the Board of
Directors of the Company appointed Gerard Haryman as President and a director of
the Company pursuant to the applicable provisions of the Company's Bylaws. Mr.
Haryman holds his respective office until the next annual meeting of the
Company's shareholders or his resignation, removal or death, whichever comes
first.

2.       SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

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

                                      F-8

<PAGE>


PHOENIX INTERNATIONAL INDUSTRIES, INC.
       ( Development  Stage  Company )
NOTES TO FINANCIAL STATEMENTS
               ( 000's omitted)

2.       SIGNIFICANT ACCOUNTING POLICIES  ( CONTINUED )

INCOME TAXES

         The Company utilizes an asset and liability approach to accounting for
income taxes that requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been
recognized in the Company's financial statements or tax returns. In estimating
future tax consequences, the Company generally considers all expected future
events other than enactment's of changes in the tax law or rates.

EARNINGS PER COMMON  SHARE

         Primary earnings per common share are calculated by dividing net
earnings applicable to common stock by the weighted average number of common
stock shares outstanding and common stock equivalents which consist of stock
options and stock warrants. On a fully-diluted basis, net earnings, weighted
average shares outstanding and common stock equivalents are adjusted to assume
the conversion of convertible subordinated debentures and preferred stock from
the date of issue. For the year ended May 31, 1995 and May 31, 1994 fully
diluted earnings per common share are not presented because there are no common
stock equivalents.

CASH AND CASH EQUIVALENTS

         For the purposes of reporting cash flows, cash and cash equivalents
include short term investments with maturities of ninety days or less at
purchase date.

PRESENTATION AND RECLASSIFICATION

         All dollar and share amounts, except amounts related to per share data,
are expressed in thousands of dollars. Certain items in the 1995 and 1994
financial statements have been reclassified for comparative purposes.

                                      F-9

 <PAGE>


PHOENIX INTERNATIONAL INDUSTRIES, INC.
       ( Development  Stage  Company )
NOTES TO FINANCIAL STATEMENTS
               ( 000's omitted)

2.       SIGNIFICANT ACCOUNTING POLICIES  ( CONTINUED )

PROPERTY AND EQUIPMENT

         Property and equipment are stated at cost. Depreciation is charged over
the estimated useful lives of the related assets and is computed using the MACRS
method. Repairs and maintenance are charged to operations when incurred.
Betterment's and purchases are capitalized. The cost and accumulated
depreciation of assets that are retired or disposed of are removed from the
appropriate asset and accumulated depreciation account, and any resulting gain
or loss is included in income.

3.      STOCKHOLDERS EQUITY

         On August 4, 1994, the Board of directors approved a 1 for 10 reverse
split of the outstanding shares of common stock of ProBac International
Corporations. The reverse split was executed on September 11, 1994. The Board of
Directors authorized shares to be increased to 50 million in order to facilitate
the subsequent reverse split. The number of shares authorized after the reverse
split is 5 million.

         On October 2, 1996, shareholders approved Amendments to the Articles of
Incorporation, changing the name of the Company to Phoenix International
Industries, Inc.: changing the authorized capital to 20,000,000 (twenty million)
shares of Common Stock, par value $.001 per share: 5,000 (five thousand) shares
of Preferred Stock for use as needed. The Company's common stock was reverse
split 15 to 1.

         On May 31, 1997 there were four million,ninehundred and sixty thousand,
and twenty eight (4,960,028) shares of common stock issued and outstanding and
there were five thousand (5,000) shares of preferred stock authorized, none
issued.

4.       BANKRUPTCY PROCEEDINGS

         On February 3, 1992 ProBac International filed for chapter 11
bankruptcy in the United States Bankruptcy Court, Middle District of Florida,
Tampa Division. The Case Number is #92-1352-8B1. Reference should be made to the
required disclosures made to the court including the Plan of Reorganization,
Compromise of Controversy and Final Settlement Agreement and Order Confirming
Debtor's Plan of Reorganization for a complete understanding of ProBac's
financial situation as of the date of reorganization. On June 30, 1993 the
Chapter 11 Plan of Reorganization as amended was scheduled for confirmation
hearing. The Order of Confirmation was signed by Thomas E. Raynes, Jr.,U.S.
Bankruptcy Judge on July 15, 1993. 

                                      F-10


<PAGE> 


PHOENIX INTERNATIONAL INDUSTRIES, INC.
       ( Development  Stage  Company )
NOTES TO FINANCIAL STATEMENTS
               ( 000's omitted)


5.       NOTES RECEIVABLE

         The Company is currently due Promissory Notes in the amount of $20,000
and $6,500 respectively. Management believes that both notes are fully
collectible. Both promissory notes are due upon request.

6.       PATENTS AND TRADEMARKS

         The Company owns two patents for solidification of environmental waste,
which were acquired when the Company was involved in that business. The Company
is no longer involved in the environmental clean-up business and the Company
believes that these patents are very little value. Due to the rapid development
in the environmental industry, the patents are valued at one thousand dollars.

7.       RELATED PARTY TRANSACTIONS

         One of the shareholders of the Company has helped to fund the Company's
cash flow. As of May 31, 1997 the company owes $96,000 to this shareholder. This
amount is included in accounts payable.

8.       ACCRUED WAGES

         The president of the Company has an employment agreement entitling him
to $250,000 in annual salary. The Company has not been in a financial position
to pay him. Therefore, he has deferred his demand for payment until an
acceptable arrangement can be made whereby he can be compensated.

9.       NOTES PAYABLE

         In May 1995, the Company received a loan in the amount of Two Hundred
Forty Thousand Dollars ($240,000) from the then Chief Executive Officer of the
Company. The loan was for a term of three years at twelve and one-half percent
(12 1/2%) simple interest. In September 1995 the Company received an additional
loan of Thirty one thousand dollars from the then Chief Executive Officer of the
Company. Both of these loans were then repaid by the issuance of Two Hundred and
Twenty Thousand (220,000) shares of the Company's common stock. These shares
have not been registered under the Securities Act of 1933.

<PAGE>


PHOENIX  INTERNATIONAL INDUSTRIES,  INC.
       ( Development  Stage  Company )
NOTES TO FINANCIAL STATEMENTS
               ( 000's omitted)


9.       NOTES PAYABLE   (CONTINUED)

         The Company is currently under litigation regarding a past due
obligation of $10,800 on a promissory note. The promissory note was executed on
January 11, 1995 with a maturity date of June 6, 1995. The plaintiff is seeking
interest (at 12% per annum), in addition to reimbursement of attorneys fees and
court costs (if any).

10.      PROPERTY AND EQUIPMENT

         Property and equipment consists of the following at May 31, 1997:

Furniture and Fixtures                         $  12,000
Less: Accumulated Depreciation                     1,714
                                               ---------
Total Property and Equipment  (Net)            $  10,286
                                               =========

         All previously owned office equipment, furniture and fixtures as of May
31, 1995 have been written off the financial statements. Under the agreement
mentioned in note 4, the property and equipment were given up during the
reorganization.

11.      DISCONTINUED OPERATIONS

         During May 31, 1995, The Company made the decision to close down its
environmental clean-up business. As such, the Company has treated this operation
as discontinued operations for all periods presented.

12.      SUBSEQUENT EVENTS

         On June 1, 1997, the Company acquired Intuitive Technology Consultants,
Inc.(ITC), headquarted in Atlanta, Georgia. In consideration therefore, the
Company issued one million, five hundred thousand shares( 1,500,000 ) of its
"restricted" common stock to the former shareholders of ITC in exchange for 100%
(1,000,000 shares ) of the authorized and issued stock of ITC.

               On July 21, 1997, the Company acquired HDX 9000, Inc.(HDX), of
New York, New York. In consideration therefore, the Company issued five hundred
thousand shares (500,000) of its restricted common stock to the former
shareholders of HDX in exchange for 100% (1,500 shares) of the authorized and
issued stock of HDX. 

                                      F-12

<PAGE> 


PHOENIX INTERNATIONAL INDUSTRIES, INC.
       ( Development  Stage  Company )
NOTES TO FINANCIAL STATEMENTS
               ( 000's omitted)


13.      INCOME TAXES

         The Company's net deferred tax asset is comprised of the following:

DEFERRRED TAX ASSET                   MAY 31, 1997  MAY 31, 1996   MAY 31, 1995
-------------------                   ------------  ------------   ------------

Net operating loss carryforward         $ 4,080       $ 3,637          3,388
Valuation allowance                      (3,046)       (2,715)        (2,529)
                                        -------       -------        -------
Net Deferred Tax Asset                  $ 1,034       $   922            859
                                        =======       =======        =======

         Net operating loss carryforwards for Federal income tax purposes total
approximately three million, seven hundred and nine thousand ( $3,709,000) at
May 31, 1997. Net operating losses expire as follows:

                     YEAR OF
                    EXPIRATION          AMOUNT
                    ----------        ----------
                       2001           $  106,000
                       2002              487,000
                       2003              624,000
                       2004              940,000
                       2005              427,000
                       2006              315,000
                       2007               44,000
                       2008               97,000
                       2010              310,000
                       2011              166,000
                       2012              193,000
                                      ----------
                                      $3,709,000
                                      ==========

         If certain substantial changes in the Company's ownership should occur,
there would be an annual limitation on the amount of the carryforward which
could be utilized.

                                      F-13

<PAGE>


PHOENIX  INTERNATIONAL INDUSTRIES,  INC.
       ( Development  Stage  Company )
NOTES TO FINANCIAL STATEMENTS
               ( 000's omitted)


14.      COMMITMENTS AND CONTINGENCIES

         The Company's principal business is located at 501 South Dixie Highway,
West Palm Beach, Florida, which consists of office and warehouse space. This
space aggregates approximately 3,500 square feet including four offices and a
conference room. The lease cost is $3,500 per month, plus expenses expiring in
June, 1998. HDX, a wholly-owned Phoenix subsidiary, now shares the space.

         The ITC subsidiary rents 10,153 square feet at 3700 Crestwood Parkway,
Duluth, Georgia. The rent is $17,979 per month, under a seven year lease which
expires in February, 2005. However, ITC pays approximately one-half rent or
$9,125 per month for the first year.

         Both of these offices are rented from unrelated third parties.

                                      F-14

<PAGE>


                                 EXHIBIT INDEX

EXHIBIT                  DESCRIPTION
-------                  -----------

27                  Financial Data Schedule