MICRO-HYDRO POWER, INC. 10KSB 1997


                           U. S. Securities and Exchange Commission
                                    Washington, D.C. 20549

                                         FORM 10-KSB

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

        For the fiscal year ended December 31, 1997.

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

        For the transition period from           to
                                       ---------    ---------

                                 Commission File No. 0-21733

                                  MICRO-HYDRO POWER, INC.
                        (Name of Small Business Issuer in its Charter)

             DELAWARE                                  87-0369035
(State or Other Jurisdiction of               (I.R.S. Employer I.D. No.)
incorporation or organization)

                        5525 South 900 East, Suite 110
                           Salt Lake City, UT 84117
                    (Address of Principal Executive Offices)

                   Issuer's Telephone Number:  (801) 262-8844



                                N/A
                (Former Name or Former Address, if changed since last Report)


Securities Registered under Section 12(b) of the Exchange Act:  None.

Securities Registered under Section 12(g) of the Exchange Act:  One Hundredth
of One Mill ($0.00001) par value common voting stock and One Tenth of One Mil
($0.0001) par value preferred stock

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.

(1)   Yes X    No        (2)   Yes  X    No  
         ---     ---               ---     ---


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

State Issuer's revenues for its most recent fiscal year:
December 31, 1997 - $ - 0 -

State  the   aggregate   market  value  of  the  common  voting  stock  held  by
non-affiliates  computed by  reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date within
the past 60 days:

     March 16, 1997 - $1.49  There are  approximately  149,027  shares of common
voting  stock of the  Registrant  held by  non-affiliates.  During the past five
years,  there has been no  "public  market"  for  shares of common  stock of the
Company,  so the Company has arbitrarily valued these shares on the basis of par
value(.00001) per share.  There are no shares of the Company's  preferred either
issued or outstanding.
<PAGE>


                   (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                          DURING THE PAST FIVE YEARS)

None; Not Applicable.


                    (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

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

                               Common Voting Stock
                                 March 16, 1998
                                    300,010

                                Preferred Stock
                                 March 16, 1998
                                       0


DOCUMENTS INCORPORATED BY REFERENCE

A description of "Documents  Incorporated  by Reference" is contained in Item 13
of this Report.



Transitional Small Business Issuer Format   Yes  X   No
                                                ---     ---
<PAGE>


                                    PART I

Item 1.  Description of Business.

Business Development
--------------------

     For a discussion of the activities of Micro-Hydro  Power,  Inc., a Delaware
corporation (the "Company") and its predecessor,  prior to the period covered by
this Report, see the Company's  Registration  Statement on Form 10-SB-A1,  filed
with the  Securities  and Exchange  Commission on March 4, 1997,  and its Annual
Report on Form 10-KSB,  for the  calendar  year ended  December 31, 1996,  filed
March 31, 1997.

     A special  meeting of the  stockholders of the Company was held on December
16, 1997 at the hour of 10:00  o'clock  a.m.,  Mountain  Daylight  Time, at 5525
South 900 East,  Suite 110, Salt Lake City, Utah pursuant to a Notice of Special
Meeting  of  Stockholders  (the  "Meeting").  Present in person or by proxy were
151,983  shares of common  voting  stock of the 300,010  issued and  outstanding
shares.  The only matter to be  presented  to the Meeting  had  previously  been
adopted  by the  unanimous  resolution  of the  Board  of  Directors  and was as
follows: (a) To change the domicile of the Company from the State of Utah to the
State of Delaware by merging the Company's predecessor, Micro-Hydro Power, Inc.,
a Utah  corporation  with and  into  the  Company,  which  was its  wholly-owned
subsidiary. The purpose of the change of domicile was to make the Company a more
attractive  candidate for a merger or acquisition  transaction.  On November 12,
1997,  the  Company  filed an  Information  Statement  with the  Securities  and
Exchange Commission in connection with this meeting. The proposal was adopted by
a vote of  151,983 to none,  and the  change of  domicile  became  effective  on
January 29, 1998, which is after the period covered by this Report.  It was also
resolved at the Meeting to proceed with the proposed  reorganization with Apollo
Telecom Network ("Apollo"),  a California corporation engaged in the business of
providing  communication  services to the general  public.  Apollo operates as a
switch  based  reseller  of  long  distance  communication  services.   Apollo's
marketing  focuses  primarily on small to medium sized commercial  accounts with
operations  located in Salt Lake City,  Utah and Phoenix,  Arizona.  Apollo also
engages  in the  resale  of  pager  and  cellular  phone  services.



     Business.
     ---------

     The Company has had no business  operations  since  approximately  November
1988. To the extent that the Company intends to continue to seek the acquisition
of  assets,   property  or  business  that  may  benefit  the  Company  and  its
stockholders,  the Company is essentially a "blank check"  company.  Because the
Company has  virtually  no assets,  conducts no business  and has no  employees,
management  anticipates that any such  acquisition  would require the Company to
issue shares of its common stock as the sole  consideration for the acquisition.
This may result in substantial  dilution of the shares of current  stockholders.
The Company's Board of Directors shall make the final  determination  whether to
complete any such  acquisition;  the approval of stockholders will not be sought
unless  required  by  applicable  laws,  rules and  regulations,  the  Company's
Articles of  Incorporation  or Bylaws,  or by  contract.  The  Company  makes no
assurance that any future enterprise will be profitable or successful.

     The Company  currently  has no business  operations  other than seeking the
acquisition of assets, property or business that may benefit the Company and its
stockholders.  On June 12, 1997, the Company, Services, Inc., a Utah corporation
("Jenson  Services"),  and  Apollo,  executed  a  non-binding  letter  of intent
providing  for the merger of a  newly-formed  wholly-owned  subsidiary of Apollo
with and into the Company (the "Letter of Intent").

     As of the date  hereof,  the  parties  have not  executed  any  difinitive,
binding Plan of Reorganization  incorporating the terms of the Letter of Intent,
and there can be no assurance that such a Plan will ever be executed or that, if
executed, such a transaction will be completed.
<PAGE>


     Principal Products or Services and Markets
     ------------------------------------------

     The Company currently offers no principal  products or services and has not
been engaged in any material  operations in the period ending  December 31, 1997
or since on or before November 1988.

     Distribution methods of the products or services;
     -------------------------------------------------

     None; not applicable.

     Status of any publicly announced new product or service
     -------------------------------------------------------

     None; not applicable.

     Competitive business conditions and the small business issuer's competitive
     position in the industry and methods of competition
     ---------------------------------------------------

     None; not applicable.

     Sources and availability of raw materials and the names of principal 
     suppliers
     ---------

     None; not applicable.

     Dependence on one or a few major customers
     ------------------------------------------
     
     None; not applicable.

     Patents, trademarks, licenses, franchises,  concessions, royalty agreements
     or labor contracts, including duration
     --------------------------------------

     None; not applicable.

     Need for any government approval of principal produts or services
     -----------------------------------------------------------------

     None; not applicable.

     Effect of existing or probable governmental regulations on the business
     -----------------------------------------------------------------------

     None; not applicable.

     Time spend during the last two fiscal years on research and development 
     activities
     ----------
     
     None; not applicable;

     Costs and effects of compliance with environmental laws
     -------------------------------------------------------

     None; not applicable.

     Number of total employees and number of full time employees
     -----------------------------------------------------------

     None; not applicable.
<PAGE>



Risk Factors
-------------

     In any  business  venture,  there are  substantial  risks  specific  to the
particular  enterprise  and  which  cannot  be  ascertained  until  a  potential
acquisition,  reorganization  or  merger  candidate  has been  identified  and a
reorganization  with such a  candidate  completed;  however,  at a minimum,  the
Company's  present and proposed business  operations will be highly  speculative
and subject to the same types of risks inherent in any new or unproven  venture,
and will include those types of risk factors outlined below.

     Limited Assets;  No Source of Revenue.  The Company has virtually no assets
and has had no revenues since before November 1988. Nor will the Company receive
any revenues until it completes an acquisition, reorganization or merger, at the
earliest.  The Company can provide no assurance that any acquired  business will
produce any material  revenues for the Company or its  stockholders  or that any
such business will operate on a profitable basis.

     "Going  Concern"  Opinion  of  Independent   Auditor.  In  its  Independent
Auditors' Report,  dated February 9, 1997, on the Company's financial statements
for the years  ended  December  31,  1997 and 1996,  the  Company's  independent
auditor  has  expressed  uncertainty  as to  the  likelihood  of  the  Company's
continuing  as  a  going  concern.  This  opinion  is  based  on  the  Company's
substantial  accumulated losses from operations,  its lack of assets and its net
working capital deficiency. See Part I, Item 7, of this Report.

     Discretionary Use of Proceeds;  "Blank Check" Company.  Because the Company
is not currently  engaged in any  substantive  business  activities,  as well as
management's  broad  discretion  with  respect  to the  acquisition  of  assets,
property or business,  the Company may be deemed to be a "blank check"  company.
Although  management intends to apply  substantially all of the proceeds that it
may  receive  through the  issuance of stock or debt to a suitable  acquisition,
subject to the criteria  identified  above,  such proceeds will not otherwise be
designated for any more specific  purpose.  The Company can provide no assurance
that any  allocation  of such  proceeds  will allow it to achieve  its  business
objectives.


     Absence of Substantive Disclosure Relating to Prospective Acquisitions. The
Company has identified a potential merger candidate;  however,  negotiations are
at a preliminary  stage and until the Company has  completed a transaction  with
such entity or with another entity, potential investors in the Company will have
virtually no substantive  information  upon which to base a decision  whether or
not to  invest  in  the  Company.  Potential  investors  would  have  access  to
significantly   more  information  if  the  Company  had  already  completed  an
acquisition or if the acquisition  target had made an offering of its securities
directly to the public. The Company can provide no assurance that any investment
in the Company will not ultimately prove to be less favorable than such a direct
investment.  The  operating  company  with whom the  Company  is in  preliminary
negotiations  with  is  involved  in  the   telecommunications   business.   The
telecommunications  business is extremely  competitive in all of its phases.  If
the Company were to complete the proposed merger,  the Company must compete with
other  companies  that are larger and  financially  stronger.  In addition,  the
operating  company is not a significant  participant  in the  telecommunications
industry.  There  can be no  assurances  that the  Company  will  complete  this
proposed transaction,  or that if such transaction is completed,  the operations
will be  successful.  In the event  that the  Company  completes  its  presently
contemplated  acquisition,  it will  timely  file a  Current  Report on form 8-K
discussing such transaction.
<PAGE>


     Unspecified  Industry and Acquired  Business;  Unascertainable  Risks.  The
Company has identified a potential merger candidate;  however,  negotiations are
at a preliminary  stage and until the Company has  completed a transaction  with
such entity or with another entity,  prospective investors will have no basis to
evaluate  the  comparative  risks and merits of  investing  in the  industry  or
business in which the Company may invest.  There can be no  assurances  that the
Company  will  complete  this  proposed  transaction  or  that if it  does,  the
operations  will be  successful.  In the event that the  Company  completes  its
presently contemplated acquisition, it will timely file a Current Report on form
8-K discussing  such  transaction.  However,  until the filing of such a Current
Report,  and in the event that the  presently  contemplated  transaction  is not
consummated,   prospective   investors  will  have  no  basis  to  evaluate  the
comparative  risks and merits of  investing in the industry or business in which
the Company may invest. To the extent that the Company may acquire a business in
a highly risky industry,  such as the  telecommunications  industry, the Company
will  become  subject  to those  risks.  Similarly,  if the  Company  acquires a
financially  unstable  business  or a  business  that is in the early  stages of
development, the Company will become subject to the numerous risks to which such
businesses  are  subject.  Although  management  intends to  consider  the risks
inherent in any industry and business in which it may become involved, there can
be no assurance that it will correctly assess such risks.

     State  Restrictions  on  "Blank  Check"  Companies.  A total  of 36  states
prohibit or  substantially  restrict the  registration and sale of "blank check"
companies  within  their  borders.  Additionally,  36 states use  "merit  review
powers"  to exclude  securities  offerings  from  their  borders in an effort to
screen out  offerings of highly  dubious  quality.  See  Paragraph  8221,  NASAA
Reports, CCH Topical Law Reports, 1990. The Company intends to comply fully with
all state  securities laws, and plans to take the steps necessary to ensure that
any future  offering of its  securities is limited to those states in which such
offerings are allowed.  However,  these legal  restrictions  may have a material
adverse  impact on the  Company's  ability to raise  capital  because  potential
purchasers of the Company's  securities  must be residents of states that permit
the purchase of such securities.  These  restrictions may also limit or prohibit
stockholders  from  reselling  shares of the  Company's  common stock within the
borders of regulating states.

     By regulation or policy statement, eight states (Idaho, Maryland, Missouri,
Nevada,   New  Mexico,   Pennsylvania,   Utah  and  Washington)   place  various
restrictions  on the sale or  resale of equity  securities  of "blank  check" or
"blind pool"  companies.  These  restrictions  include,  but are not limited to,
heightened disclosure requirements, exclusion from "manual listing" registration
exemptions for secondary trading  privileges and outright  prohibition of public
offerings of such companies.

     Further,  all states  (with the  exception of Alabama,  Delaware,  Florida,
Hawaii,  Illinois,  Minnesota,  Nebraska and New York) have adopted some form of
the Small Corporate  Offering  Registration  Exemption  ("SCOR") program,  which
permits an issuer to notify the  Securities  and Exchange  Commission of certain
offerings registered in such states by filing a Form D under Regulation D of the
Securities and Exchange  Commission.  States  participating  in the SCOR program
also allow  applications  for  registration  of securities by  qualification  by
filing  a  Form  U-7  with  the   states'   securities   commissions.   In  most
jurisdictions,  "blank  check" and "blind pool"  companies  are not eligible for
participation in the SCOR program.
<PAGE>

     Management  to Devote  Insignificant  Time to  Activities  of the  Company.
Members of the Company's  management  are not required to devote their full time
to the affairs of the Company. Because of their time commitments, as well as the
fact that the Company has no business, the members of management anticipate that
they  will  devote an  insignificant  amount  of time to the  activities  of the
Company,  at least  until such time as the  Company  has  identified  a suitable
acquisition target.

     Jenson Services,  which is a consultant and stockholder of the Company, has
been and continues to be,  involved in the promotion of other  entities that may
be deemed to be "blank check" companies. Additionally, Jenson Services, provides
financial consulting services to these companies.

     Future Sales of Common Stock. Jenson Services,  currently beneficially owns
104,128 post-split shares of the common stock of the Company or approximately 35
percent of its outstanding voting securities. As of the date of this Report, all
of Jenson  Services'  Stock will have been officially  owned for one year,  and
subject  to  compliance  with  the  applicable  provisions  of  Rule  144 of the
Securities and Exchange Commission, Jenson Services may then commence to sell up
to one percent of the  outstanding  securities of the Company in any three month
period.  Such sales could have a substantial adverse effect on any public market
that may then exist in the Company's common stock.  Sales of any of these shares
by Jenson  Services could  severely  affect the ability of the Company to secure
the  necessary  debt or  equity  funding  for the  Company's  proposed  business
operations.  For additional information concerning the present market for shares
of  common  stock of the  Company,  see Part  III,  Item 9 of this  Report.

     In addition,  Hugh and Sharon Lambert  collectively  own 46,855  post-split
shares, or approximately 16 percent, of the Company's  outstanding common stock.
These  shares  were  acquired  in or  before  1984,  and may be sold  under  the
applicable provisions of Rule 144 of the Securities and Exchange Commission. For
additional  information  concerning  common  stock  ownership  of Mr.  and  Mrs.
Lambert, see Part III, Item 9 of this Report.

     Dilution.  The issuance of an aggregate of 86,456  post-split shares of the
Company's  common stock to Jenson  Services in 1994 effected a "dilution" of the
holdings of the Company's  other  stockholders.  Additionally,  depending on the
nature and extent of  services  rendered,  the  Company  may  compensate  Jenson
Services  for any  financial  consulting  services  that it may  perform for the
Company in the future.  Because the Company  currently has no resources,  and is
unlikely to have any resources  until it has completed a merger or  acquisition,
management expects that any such compensation would take the form of an issuance
of the  Company's  stock to Jenson  Services;  this  would  further  dilute  the
holdings of the Company's other stockholders.

     No Market for Common  Stock;  No Market for Shares.  Although the Company's
common stock is listed on the OTC Bulletin Board of the National  Association of
Securities  Dealers,  Inc.  (the  "NASD"),  under the  symbol  "MHPI",  there is
currently no established market for such shares;  there can be no assurance that
such a market will ever develop or be maintained. Any market price for shares of
common stock of the Company is likely to be very volatile,  and numerous factors
beyond the control of the Company may have a  significant  effect.  In addition,
the stock  markets  generally  have  experienced,  and  continue to  experience,
extreme  price and volume  fluctuations  which have affected the market price of
many  small  capital  companies  and which  have  often  been  unrelated  to the
operating  performance of these companies.  These broad market fluctuations,  as
well as general  economic and political  conditions,  may  adversely  affect the
market price of the Company's  common stock in any market that may develop.  See
Part II, Item 5, of this Report.

     Risks of "Penny  Stock."  The  Company's  common  stock may be deemed to be
"penny  stock"  as  that  term is  defined  in Reg.  Section  240.3a51-1  of the
Securities and Exchange Commission.  Penny stocks are stocks (i) with a price of
less than five  dollars  per share;  (ii) that are not traded on a  "recognized"
national  exchange;  (iii) whose  prices are not quoted on the NASDAQ  automated
quotation system  (NASDAQ-listed  stocks must still meet requirement (i) above);
or (iv) is an issuer  with net  tangible  assets  less than  $2,000,000  (if the
issuer has been in continuous  operation for at least three years) or $5,000,000
(if in continuous operation for less than three years), or with average revenues
of less than $6,000,000 for the last three years.

     There has not been an "established  public market" for the Company's common
stock  for the  past 6 years.  The  Company's  common  stock  is  quoted  on the
"Electronic  Bulletin Board" of the National  Association of Securities Dealers,
Inc.(the "NASD"), under the symbol "MHPI".
<PAGE>


     After completing a merger or acquisition  transaction the Company will seek
a  securities  firm to make a  market  in its  securities.  If there is only one
market maker in the Company's securities, there is a risk that market maker will
dominate  the market and set prices  that are not based on  competitive  forces.

     Section 15(g) of the Securities Exchange Act of 1934, as amended,  and Reg.
Section   240.15g-2  of  the   Securities   and  Exchange   Commission   require
broker-dealers  dealing in penny stocks to provide  potential  investors  with a
document  disclosing  the risks of penny stocks and to obtain a manually  signed
and dated written receipt of the document before  effecting any transaction in a
penny stock for the  investor's  account.  Potential  investors in the Company's
common  stock are urged to obtain  and read  such  disclosure  carefully  before
purchasing any shares that are deemed to be "penny stock."

     Moreover,  Reg. Section 240.15g-9 of the Securities and Exchange Commission
requires  broker-dealers  in penny stocks to approve the account of any investor
for transactions in such stocks before selling any penny stock to that investor.
This  procedure  requires  the  broker-dealer  to (i) obtain  from the  investor
information concerning his or her financial situation, investment experience and
investment  objectives;  (ii) reasonably  determine,  based on that information,
that  transactions  in penny  stocks are  suitable for the investor and that the
investor has sufficient  knowledge and experience as to be reasonably capable of
evaluating  the risks of penny stock  transactions;  (iii)  provide the investor
with a written statement setting forth the basis on which the broker-dealer made
the  determination  in (ii) above;  and (iv)  receive a signed and dated copy of
such statement  from the investor,  confirming  that it accurately  reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these  requirements  may make it more difficult for investors in
the  Company's  common  stock to  resell  their  shares to third  parties  or to
otherwise dispose of them.


Involvement in Other "Blank Check" Companies.
---------------------------------------------

     Quinton  Hamilton,  President  and  Director.  Other than the Company,  Mr.
Hamilton is the Secretary, Treasurer and Director of Olympus M.T.M. Corporation,
a Utah corporation ("Olympus"). Mr. Hamilton has been involved as an officer and
director of Olympus since July 1996. At this time, Olympus,  may be deemed to be
a "blank check" company.  Other than the  aforementioned,  Mr. Hamilton has been
neither an officer,  director of affiliate of any other "blank check"  companies
for the previous five years.

     Thomas J.  Howells,  Vice  President  and  Director.  Thomas J.  Howells is
Vice-President and Director of the Company.  Other than the Company, Mr. Howells
was Secretary, Treasurer and Director of Ro-Mac Gold, Ltd., a Nevada corporation
("Ro-Mac"), now known as "Phoenix Associates Land Syndicate",  from January 1996
until its  reorganization in October 1996.  Ro-Mac, may be deemed to have been a
"blank check" company until its  reorganization.  Mr. Howells was also President
and Director of React Systems, Inc., a Nevada corporation ("React"),  from April
1995 to September 1995. During this period,  React, may have been deemed to be a
"blank check" company. Also, Mr. Howells is Secretary, Treasurer and Director of
United States Mining and Exploration,  Inc., a Utah corporation ("U.S. Mining").
At this time,  U.S.  Mining,  may be deemed to be a "blank  check"  company.  In
addition,  Mr. Howells is  Secretary/Treasurer  and Director of Intercontinental
Strategic Minerals,  Inc., a Utah Corporation  ("ISM"). At this time, ISM may be
deemed to be a "blank check" company. Other than the aforementioned, Mr. Howells
has been  neither  an  officer,  director  or  affiliate  of any  "blank  check"
companies for the previous 5 years.
<PAGE>


     Kathleen L. Morrison, Secretary, Treasurer and Director. From November 1993
until its  reorganization in April, 1995,  Kathleen L. Morrison,  was a director
and the  Secretary/Treasurer  of  Westcott  Financial  Corporation,  a  Delaware
corporation, now known as "Entertainment Technologies & Programs, Inc." ("ETPI).
ETPI is  publicly-held  and may be deemed to have been a "blank  check"  company
until its reorganization in April of 1995. Mrs. Morrison was also the Secretary,
Treasurer and Director of Onasco Companies, Inc., a Utah corporation,  now known
as Tengasco,  Inc.  ("Tengasco"),  from January 1995 until its reorganization in
July,  1995.  Tengasco is publicly  held and may be deemed to have been a "blank
check"   company   until  its   reorganization.   From  July  1995,   until  its
reorganization in September,  1996, Kathleen L. Morrison, was a director and the
Secretary/Treasurer  of Mason Oil  Company,  Inc.,  a Utah  corporation  ("Mason
Oil").  Until its  reorganization  in September 1996, Mason Oil Company may have
been deemed to be a "blank check" company.  Mrs. Morrison is currently President
and Director of Seafoods Plus,  Inc., a Utah  corporation  which may be deemed a
"blank check" company.  Other than the  aforementioned,  Mrs.  Morrison has been
neither an officer,  director or affiliate of any blank check  companies for the
previous five years.

     Jenson Services,  which is a consultant and stockholder of the Company, has
been and continues to be,  involved in the promotion of other  entities that may
be deemed to be "blank check" companies.  Additionally, Jenson Services provides
financial consulting services to these companies.


Item 2.  Description of Property.

          The Company has no property or assets; its principal  executive office
     address and telephone  number are the business office address and telephone
     number of Jenson Services a financial consulting firm and Utah corporation,
     which are provided at no cost. See Item 1, Part I, of this Report.


Item 3.  Legal Proceedings.

     The Company is not the subject of any pending legal proceedings; and to the
knowledge of management,  no proceedings are presently  contemplated against the
Company by any federal, state or local governmental agency.

     Further,  to the knowledge of management,  no director or executive officer
is party to any action in which any has an interest adverse to the Company.

<PAGE>


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


     A special  meeting of the  stockholders of the Company was held on December
16, 1997 at the hour of 10:00  o'clock  a.m.,  Mountain  Daylight  Time, at 5525
South 900 East,  Suite 110, Salt Lake City, Utah pursuant to a Notice of Special
Meeting of the  Stockholders.  Present in person or by proxy were 151,983 shares
of common voting stock of the 300,010 issued and outstanding shares.  Present at
the meeting were Leonard Myers, Dannie Burnett and Jeffrey D. Jenson. Mr. Jenson
chaired the meeting and Leonard Myers acted as Vice Chairman. It was unanimously
resolved, without any dissenting votes, as follows, to-wit:

     1. That the Company be  redomiciled  from the State of Utah to the State of
Delaware.

     2.  To  proceed  with  the  proposed   reorganization  with  the  operating
telecommunications  company.  Despite  this  resolution,  the  Company  has  not
completed any such  reorganization  and there can be no assurance  that any such
reorganization will be completed or that if it is, that the Company's operations
will be successful.  See Part I, Item 1 of this Report.

                                    PART II


Item 5.  Market for Common Equity and Related Stockholder Matters.


Market Information
------------------

          There is no "public market" for shares of common stock of the Company.
     The Company is listed on the OTC Bulletin Board of the National Association
     of Securities Dealers ("NASD") under the symbol "MHPI", however, management
     does not expect any public  market to develop  unless and until the Company
     completes an acquisition or merger. In any event, no assurance can be given
     that  any  market  for  the  Company's  common  stock  will  develop  or be
     maintained.  If a public  market ever  develops in the future,  the sale of
     "unregistered" and "restricted" shares of common stock pursuant to Rule 144
     of the Securities and Exchange  Commission by Jenson Services or others may
     have a substantial adverse impact on any such public market.


Holders
-------

     The number of record holders of the Company's  common stock as of March 16,
1998  was  354;  this  number  does  not  include  an  indeterminate  number  of
stockholders  whose  shares are held by brokers  in street  name.  The number of
stockholders  has been  substantially  the same during the past five years,  and
presently.

<PAGE>

Dividends
---------

     There are no present  material  restrictions  that limit the ability of the
Company  to pay  dividends  on common  stock or that are  likely to do so in the
future. The Company has not paid any dividends with respect to its common stock,
and does not intend to pay dividends in the foreseeable future.

Recent Sales of Unregistered Securities
---------------------------------------

     On December 8, 1994, the Company's Board of Directors  unanimously voted to
issue 8,645,578 "unregistered" and "restricted" shares of pre-split common stock
to Jenson  Services,  in  consideration  of  $5,000.00  in  consulting  fees and
expenses  incurred by the Company and settled by Jenson  Services.  These shares
are  fully-paid  and were issued to Jenson  Services,  on the basis of par value
(.00001), on or about December 23, 1994.

          Management believes that Jenson Services,  is an "accredited investor"
     as that term is defined under applicable federal and state securities laws,
     rules and regulations.  Further,  Jenson  Services,  is a consultant to the
     Company and had access to all material  information  regarding  the Company
     prior to the offer or sale of these securities. The offer and sale of these
     securities  are  believed  to  have  been  exempt  from  the   registration
     requirements of Section 5 of the Securities Act of 1933 pursuant to Section
     4(2)  thereof,   and  from  similar  states'  securities  laws,  rules  and
     regulations  requiring the offer and sale of securities by available  state
     exemptions from such registration.
     
Item 6.  Management's Discussion and Analysis or Plan of Operation.


Plan of Operation
-----------------

     The Company has not engaged in any material operations in the period ending
December 31, 1997, or since in or before  November 1988. The Company  intends to
continue to seek out the acquisition of assets, property or business that may be
beneficial to the Company and its stockholders.
<PAGE>


     The Company's only foreseeable cash requirements  during the next 12 months
will relate to  maintaining  the Company in good  standing in the State of Utah,
and keeping its reports  "current" with the Securities and Exchange  Commission.
Except as stated  under the  heading  "Liquidity",  below,  management  does not
anticipate that the Company will have to raise  additional funds during the next
12 months.

     The Company  currently  has no business  operations  other than seeking the
acquisition of assets, property or business that may benefit the Company and its
stockholders.  On June 12,  1997,  the  Company,  Jenson  Services,  and Apollo,
executed  a  non-binding  letter  of  intent  providing  for  the  merger  of  a
newly-formed  wholly-owned  subsidiary  of Apollo with and into the Company (the
"Letter of Intent").

     The  Letter  of  Intent  confirms  the  parties'  intent to adopt a binding
Agreement  and Plan of Merger (the "Plan")  providing  for,  among other things,
(a)(i) the transfer by Apollo to a newly-formed wholly-owned Delaware subsidiary
of  Apollo  ("Del-sub")  of  certain  assets  consisting  of  Apollo's  domestic
telecommunications  business;  and (ii) the merger of Del-sub  with and into the
Company;  or,  alternatively,  (b) a transaction  substantially  similar to that
described in item (a) and acceptable to Apollo and its counsel.


     As of the date  hereof,  the  parties  have not  executed  any  difinitive,
binding Plan  incorporating the terms of the Letter of Intent,  and there can be
no assurance that such a Plan will ever be executed or that, if executed, such a
transaction will be completed.



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

     The Company has had no operations since November 1988.


Liquidity
---------

     The Company presently has no assets,  cash or otherwise.  It is anticipated
that the  Company's  expenses  over the next 12 months will be advanced  through
loans from either it's officers and directors or Jenson Services.

<PAGE>

Item 7.  Financial Statements.

For the periods ended December 31, 1997 and 1996
------------------------------------------------

Independent Auditors Report

Balance Sheets

Statement of Operations

Statement of Stockholders' Equity

Statement of Cash Flows

Notes to the Financial Statements




<PAGE>





                                    MICRO-HYDRO POWER, INC.

                                 Independent Auditors' Report
                                              and
                                     Financial Statements

                                  December 31, 1997 and 1996










<PAGE>


                                    MICRO-HYDRO POWER, INC.




                                       TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S>                                                                              <C>

                                                                                   Page
        Independent Auditors' Report. . . . . . . . . . . . .                        1


        Balance Sheet - December 31, 1997 and 1996. . . . . .                        2


        Statements of Operations for the
        years ended December 31, 1997 and
        December 31, 1996 . . . . . . . . . . . . . . . . . .                        3


        Statements of Stockholders' Deficit for
        the years ended December 31, 1997 and
        December 31, 1996 . . . . . . . . . . . . . . . . . .                        4


        Statements of Cash Flows for the
        years ended December 31, 1997 and
        December 31, 1996 . . . . . . . . . . . . . . . . . .                        5


        Notes to Financial Statements . . . . . . . . . . . .                       6-8





</TABLE>


<PAGE>


MANTYLA, McREYNOLDS                                   
AND ASSOCIATED, C.P.A'S                               
A Professional Corporation                            
                                                      
                                                      
                                                      
                                                      




                                 Independent Auditors' Report


The Board of Directors and Shareholders
Micro-Hydro Power, Inc.


     We have audited the accompanying  balance sheets of Micro-Hydro Power, Inc.
as of December  31, 1997 and 1996,  and the related  statements  of  operations,
stockholders'  deficit, and cash flows for the years ended December 31, 1997 and
1996.  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 audit.

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

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

     The  accompanying  financial  statements  have been prepared  assuming that
Micro- Hydro Power, Inc. will continue as a going concern.  As discussed in note
2  to  the  financial  statements,  the  Company  has  accumulated  losses  from
operations,  has no assets,  and has a net working capital deficiency that raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these  matters are also  described  in note 2. The  financial
statements do not include any  adjustment  that might result from the outcome of
this uncertainty.



                                              /S/MANTYLA, McREYNOLDS & ASSOC.


                                              Mantyla, McReynolds & Associates
Salt Lake City, Utah
February 27, 1998





<PAGE>
<TABLE>
<CAPTION>



                                    MICRO-HYDRO POWER, INC.
                                         Balance Sheet
                                  December 31, 1997 and 1996


<S>                                                      <C>                    <C>


                                ASSETS                       1997                  1996
                                ------                       ----                  ----

Assets                                                    $    -0-              $    -0-
                                                             ------                 ------

                      Total Assets                        $    -0-              $    -0-
                                                              =====                 ======



                     LIABILITIES AND STOCKHOLDERS' DEFECIT
                     -------------------------------------

Current Liabilities:
        Income taxes payable                              $    100              $     100
        Accounts payable                                     2,619                  2,894
        Stockholder loan - Note 4                            9,973                  5,293
                                                             -----                  -----
               Total Current Liabilities                    12,692                  8,287

               Total Liabilities                            12,692                  8,287

Stockholders' Deficit:
        Preferred stock, $.0001 par value;
         authorized 5,000,000 shares; issued
         and outstanding, 0 shares - Note 6
        Common stock, $.00001 par value;
         authorized 30,000,000 shares; issued
         and outstanding, 300,010 shares                         3                      3
        Additional paid in capital                         163,976                163,976
        Accumulated deficit                               (176,671)              (172,266)
                                                          --------               --------
               Total Stockholders' Deficit                 (12,692)                (8,287)
                                                            ------                 ------

                      Total Liabilities and
                        Stockholders' Deficit             $    -0-              $    -0-
                                                             ======                ======






                        See accompanying notes to financial statements

                                              2
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                    MICRO-HYDRO POWER, INC.
                                   Statements of Operations
                  For the Years Ended December 31, 1997 and December 31, 1996


<S>                                                      <C>          <C>

                                                              1997         1996
                                                              ----         ----

Revenue:
        Revenues from operations                           $     -0-   $      -0-
                                                               -------    --------

               Total Revenue                                     -0-          -0-


General and Administrative Expenses                             4,305        2,640
                                                                -----        -----

               Net Income Before Taxes                         (4,305)      (2,640)

               Income/Franchise taxes                             100          200
                                                                  ---          ---

               Net loss                                   $    (4,405) $    (2,840)
                                                          ===========  ===========


Loss per share                                            $      (.01) $      (.01)
                                                          ===========  ===========


Weighted Average Shares Outstanding                           300,010      300,010
                                                              =======      =======






                 See accompanying notes to financial statements

                                        3
</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                               MICRO-HYDRO POWER, INC.
                                         Statements of Stockholders' Deficit
                             For the Years Ended December 31, 1997 and December 31, 1996


<S>                                 <C>        <C>          <C>              <C>               <C>


                                                              Additional                               Net
                                      Common     Common         Paid in         Accumulated       Stockholders'
                                      Shares      Stock         Capital           Deficit            Deficit
Balance, December 31, 1995
  Restated for split (note 5)          300,010  $      3    $   163,976         $  (167,426)      $   (5,447)

Net loss for the year ended
 December 31, 1996                                                                   (2,840)         (2,840)
                                       -------   -------        -------               ------          ------
Balance, December 31, 1996             300,010  $      3    $   163,976         $  (172,266)       $  (8,287)

Net loss for the year ended
 December 31, 1997                                                                   (4,405)          (4,405)
                                       -------    -------        -------              ------           ------
Balance, December 31, 1997             300,010  $       3    $   163,976        $  (176,671)       $ (12,692)
                                       =======  =========    ===========        ===========        =========






                 See accompanying notes to financial statements

                                        4

</TABLE>

<PAGE>

<TABLE>
<CAPTION>



                                    MICRO-HYDRO POWER, INC.
                                   Statements of Cash Flows
                  For the Years Ended December 31, 1997 and December 31, 1996

<S>                                                      <C>                    <C>

                                                              1997                 1996
                                                              ----                 ----

Cash Flows Provide by/(Used for)
  Operating Activities:
Net Loss                                                  $  (4,405)            $  (2,840)
Adjustments to reconcile net income
 to net cash used for operating
 activities:
         Expenses paid on behalf
          of company by a
          stockholder                                         4,680                 3,229

        Increase in accounts payable                           (275)                  275   

        Increase(decrease)in taxes payable                                           (664)
                                                               ----                   ---

Net Cash Used for Operating
 Activities                                                     -0-                   -0-
                                                                 -                     -


Net Increase in cash                                            -0-                   -0-

Beginning Cash                                                  -0-                   -0-
                                                                 -                     -

Ending Cash                                               $     -0-             $     -0-
                                                              =======              =======

Supplemental Disclosure of Cash Flow Information

Cash paid during the periods for:
 Interest                                                 $     -0-             $     -0-
                                                              =======               ======

 Taxes                                                    $     -0-             $     -0-
                                                             =========              =======








                        See accompanying notes to financial statements

                                              5
</TABLE>
<PAGE>

                                   MICRO-HYDRO POWER, INC.
                                Notes to Financial Statements
                                      December 31, 1997



Note 1         Organization and Summary of Significant Accounting Policies

               (a) Organization

               Micro-Hydro Power, Inc. [Company] incorporated under the laws of
               the State of Utah in 1980.  The Company was dissolved November,
               1988 and reinstated by Court Order on or about October 20, 1996.
               In December, 1997, the Company changed its domicile from the
               State of Utah to the State of Delaware by merging with and into
               its wholly-owned subsidiary, Micro-Hydro Power, Inc., a Delaware
               corporation, which the Company recently formed

               The Company was originally  organized primarily for the research,
               development,  sale, manufacture,  distribution,  maintenance, and
               operation   of   micro-hydro   power  units   which   consist  of
               water-powered  electrical  generating  machines.  The company has
               been essentially dormant since 1988.

               (b) Income Taxes

               Effective  April 1, 1993,  the Company  adopted the provisions of
               Statement  of  Financial   Accounting   Standards  No.  109  [the
               Statement], "Accounting for Income Taxes." The Statement requires
               an asset and  liability  approach for  financial  accounting  and
               reporting for income taxes,  and the  recognition of deferred tax
               assets and liabilities for the temporary  differences between the
               financial  reporting bases and tax bases of the Company's  assets
               and  liabilities  at enacted  tax rates  expected to be in effect
               when such amounts are realized or settled.  The cumulative effect
               of this change in accounting  for income taxes as of December 31,
               1997  is  $0  due  to  the  valuation  allowance  established  as
               described below.

               (c) Net Loss Per Common Share

               Net loss per common share is based on the weighted average number
               of shares outstanding.

               (d) Statement of Cash Flows

               For purposes of the statements of cash flows, the Company
               considers cash on deposit in the bank to be cash.  The Company
               has $0 cash at December 31, 1997.


Note 1         Organization and Summary of Significant Accounting Policies
               -----------------------------------------------------------
               [continued]

               (e)  Use of Estimates in Preparation of Financial Statements 
               
               The preparation of financial statements in conformity with

                                        6


<PAGE>
                             MICRO-HYDRO POWER, INC.
                          Notes to Financial Statements
                                December 31, 1997
                                  [continued]



               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  financial
               statements, and  the  reported  amounts of revenues and expenses 
               during  the reporting  period.  Actual results could differ from 
               those estimated.

Note 2         Liquidity
               ---------

               The Company has  accumulated  losses  through  December  31, 1997
               amounting to $176,671,  has no assets,  has a net working capital
               deficiency  of $12,692  at  December  31,  1997,   and  does  not
               anticipate  generating  sufficient  cash flows from operations to
               meet  the  Company's  cash  requirements.   These  factors  raise
               substantial  doubt about the  Company's  ability to continue as a
               going concern.

               Management  plans  include  finding  a  well-capitalized   merger
               candidate to commence operations. The financial statements do not
               include  any  adjustments  that might  result from the outcome of
               this uncertainty.


Note 3         Income Taxes
               ------------

               The Company adopted Statement No. 109 as of April 1, 1993.  Prior
               years' financial statements have not been restated to apply the
               provisions of Statement No. 109.  No provision has been made in
               the financial statements for income taxes because the Company has
               accumulated substantial losses from operations.

               The tax  effects  of  temporary  differences  that  give  rise to
               significant  portions of the  deferred  tax asset at December 31,
               1997 have no impact on the financial  position of the Company.  A
               valuation  allowance is provided  when it is more likely than not
               that some portion of the deferred tax asset will not be realized.
               Because of the lack of taxable earnings history,  the Company has
               established  a  valuation  allowance  for all  future  deductible
               temporary differences.


Note 4         Stockholder Loan
               ----------------

               A  stockholder  has paid expenses on behalf of the company in the
               amount of $4,680 during 1997 and $3,229 during 1996.  The company
               has recorded a liability for these  expenses to the  stockholder.
               This unsecured loan bears no interest and is due on demand.

                                                     
Note 5         Reverse Stock Split
------         -------------------

               On July 23,  1996,  the Company  effected a reverse  split of its
               outstanding voting securities on the basis of 100 shares for one,

                                       7
<PAGE>

                             MICRO-HYDRO POWER, INC.
                          Notes to Financial Statements
                                December 31, 1997
                                   [continued]


               while  retaining the authorized  shares at 30,000,000 of $0.00001
               par value,  with  appropriate  adjustments in additional  paid-in
               capital and stated capital  accounts.  No stockholder's  holdings
               were  reduced to less than 100 shares as a result of the  reverse
               split,as  determined  by the  Company's  President,  whether on a
               stockholder or per certificate  basis.  The rounding  resulted in
               300,010 shares of stock  outstanding after the reverse split. All
               disclosures  in the  financial  statements,  with  respect to the
               number  of  shares  outstanding,   are  presented  in  post-split
               denominations.


 
Note 6         Preferred Stock
------         ---------------

               The Certificate of Incorporation of Micro-Hydro Power, Inc., a 
               Delaware corporatin, authorizes the issuance of 5,000,000 shares
               of $.0001 par value preferred stock.  The Board of Directors may
               issue the shares in series and may designate the powers, 
               preferences and rights of such shares by resolutin, without the 
               vote of stockholders. No shares are issued and outstanding as of 
               December 31, 1997.  

Note 7         Letter of Intent
------         ----------------

               In June, 1997, the Company executed a non-binding letter of 
               intent providing for the merger of a newly-formed wholly-owned
               subsidiary of Apollo Telecom Network, Inc., a California 
               corporation, with and into the Company.  As of the date of this 
               Report, the merger has not been consummated.



                                        8
<PAGE>






Item 8.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

    None; Not Applicable.


                                   PART III


Item 9.  Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.


Identification of Directors and Executive Officers
--------------------------------------------------

     The following table sets forth, in  alphabetical  order,  the names and the
nature of all positions and offices held by all directors and executive officers
of the Company for the Company year ending  December 31, 1997 and to
the date hereof,  and the period or periods  during which each such  director or
executive officer served in his or her respective positions.

<TABLE>
<CAPTION>
<S>                         <C>              <C>              <C>

                                                Date of          Date of
                               Positions      Election or      Termination
Name                             Held         Designation     or Resignation
----                           ---------      -----------     --------------

Quinton N. Hamilton          President             09-03-96                   *
                             & Director

Thomas J. Howells            Vice President        04-19-96                   *
                             & Director

Kathleen L. Morrison         Secretary, Treasurer  12-22-93                   *
                             & Director


</TABLE>

*These  persons  presently  serve in the  capacities  indicated  opposite  their
respective names.


Term of Office
--------------

     The term of office of the current directors shall continue until the annual
meeting of  stockholders,  which has been scheduled by the Board of Directors to
be held in May of each  year.  The  annual  meeting  of the  Board of  Directors
immediately  follows the annual meeting of  stockholders,  at which officers for
the coming year are elected.


Business Experience
-------------------

     Quinton  Hamilton,  President  and Director is 26 years old.  Mr.  Hamilton
attended the  University  of Utah from 1990 to 1995,  at which time he graduated
with a B.A. Mr.  Hamilton worked as an account  representative/coordinator  with
the marketing  firm of Scopes,  Garcia and Carlisle,  located in Salt Lake City,
Utah,  for two years ending June 1997.  Mr.  Hamilton is currently  working as a
Marketing Associate for City Search of Salt Lake City, Utah.
<PAGE>

     Thomas J. Howells, Director and Vice President is 25 years old. Mr. Howells
has been working as an investment  consultant with Jenson  Services,  which is a
consultant to and a majority stockholder in the Company, for the past two years.
Mr. Howells attended Westminster College of Salt Lake City from 1991 until 1995.
     Mr. Howells received a B.A. degree from Westminster  College 1993, at which
time
he entered the M.B.A.  program.  In 1994, Mr. Howells  received a Reserve Forces
Commission as a Second Lieutenant with Military Engineering.

     Kathleen L. Morrison, Director and Secretary/Treasurer. Mrs. Morrison is 41
years old.  For the past four  years,  she has been the office  manager  for two
persons,  one of which  is  Jenson  Services,  which  is a  consultant  to and a
majority  stockholder  of the Company.  For seven  years,  she was the editor of
"Super Group," a vertical market computer  magazine  targeting HP3000 users. Ms.
Morrison received a B.A. degree from Colorado State University in 1978.


Family Relationships
--------------------

     There are no family relationships among the officers and directors of the
Company.

Involvement in Certain Legal Proceedings
----------------------------------------


     Except as indicated  below and to the knowledge of  management,  during the
past five years,  no present or former  director,  person  nominated to become a
director, executive officer, promoter or control person of the Company:

     (1) Was a general  partner  or  executive  officer  of any  business  by or
against  which any  bankruptcy  petition was filed,  whether at the time of such
filing or two years prior thereto;

     (2) Was  convicted  in a  criminal  proceeding  or named the  subject  of a
pending  criminal  proceeding  (excluding  traffic  violations  and other  minor
offenses);

     (3) Was the  subject of any order,  judgment  or decree,  not  subsequently
reversed,  suspended  or  vacated,  of  any  court  of  competent  jurisdiction,
permanently or temporarily enjoining,  barring, suspending or otherwise limiting
his involvement in any type of business,  securities or banking activities;  and

     (4) Was the  subject of any order,  judgment  or decree,  not  subsequently
reversed,  suspended  or  vacated,  of any federal or state  authority  barring,
suspending or otherwise  limiting for more than 60 days the right of such person
to engage in any activity  described  above under this Item, or to be associated
with persons engaged in any such activity;

     (5) Was found by a court of competent jurisdiction (in a civil action), the
Commission  or the  Commodity  Futures  Trading  Commission  to have  violated a
federal or state  securities or  commodities  law, and the judgment has not been
reversed, suspended, or vacated.

<PAGE>


Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------

     In conjunction  with Section 16(a) of the Exchange act, the following table
identifies the "reporting  persons" which have filed Form 3, Initial  Statements
of  Beneficial  Ownership of  Securities,  due to their  relationships  with the
Company, in compliance with the aforementioned act.

<TABLE>
<CAPTION>
<S>                           <C>                                <C>
"Reporting Person"            Relationship to Company            Date of Filing

Quinton N. Hamilton           President and Director             04-01-96

Thomas J. Howells             Vice President and Director        04-01-96

Kathleen L. Morrison          Sec'y, Treasurer and Director      04-01-96

Jenson Services, Inc.         10% Owner                          04-01-96

Hugh Lambert                  10% Owner                          04-01-96

Jeffrey D. Jenson             President and Director             04-01-96

Travis T. Jenson              Vice President and Director        04-01-96
</TABLE>


     No  director,  executive  officer or 10%  shareholder  of the  Company  has
effected any  transactions in the Company's  securities since the date of filing
of the above-referenced reports.
<PAGE>

Item 10.  Executive Compensation.


Cash Compensation
-----------------

          The following table sets forth the aggregate  compensation paid by the
     Company for services rendered during the periods indicated:


<TABLE>
<CAPTION>
                                      SUMMARY COMPENSATION TABLE
<S>        <C>        <C>        <C>        <C>        <C>          <C>       <C>        <C>
                                                        Long Term Compensation
                     Annual Compensation             Awards              Payouts
(a)        (b)      (c)      (d)      (e)       (f)         (g)       (h)       (i)
Name and   Years or                   Other     Restricted  Option/   LTIP      All
Principal  Periods  $        $        Annual    Stock       SAR's     Payouts   Other
Position   Ended   Salary     Bonus   Compen-   Awards      (#)       ($)       Compensa-
           1995,                      sation($)                                 tion ($)
           1996 &
           1997

Quinton
Hamilton   0         0         0        0         0          0          0         0
President, 0         0         0        0         0          0          0         0
Director   0         0         0        0         0          0          0         0

Thomas
J. Howells 0         0         0        0         0          0          0         0
Vice       0         0         0        0         0          0          0         0
President  0         0         0        0         0          0          0         0
& Director

Kathleen L.0         0         0        0         0          0          0         0
Morrison   0         0         0        0         0          0          0         0
Secretary, 0         0         0        0         0          0          0         0
Treasurer,
&Director


Jeffrey
D. Jenson  0         0          0       0          0         0          0         0
former
President  0         0          0       0          0         0          0         0
& Director 0         0          0       0          0         0          0         0

Travis     0         0          0       0          0         0          0         0
T. Jenson  0         0          0       0          0         0          0         0
former
Vice       0         0          0       0          0         0          0         0
President
& Director
</TABLE>
<PAGE>


     No cash compensation,  deferred  compensation or long-term  incentive plan
awards were issued or granted to the Company's  management  during the Company's
years ending  December 31, 1997,  1996 or 1995, or the period ending on the date
of this Report.  Further, no member of the Company's management has been granted
any option or stock appreciation right; accordingly,  no tables relating to such
items have been included within this Item. See the Summary Compensation Table of
this Item.


Compensation of Directors
-------------------------

     There  are  no  standard  arrangements  pursuant  to  which  the  Company's
directors are compensated for any services  provided as director.  No additional
amounts are payable to the Company's  directors for committee  participation  or
special assignments.

     There are no arrangements  pursuant to which any of the Company's directors
was compensated  during the Company's last completed fiscal year or the previous
two  fiscal  years  for any  service  provided  as  director.  See  the  Summary
Compensation Table of this Item.


Termination of Employment and Change of Control Arrangement
-----------------------------------------------------------

     There are no compensatory  plans or arrangements,  including payments to be
received  from the  Company,  with  respect to any person  named in the  Summary
Compensation  Table set out above  which  would in any way result in payments to
any  such  person  because  of his  or  her  resignation,  retirement  or  other
termination of such person's employment with the Company or its subsidiaries, or
any  change  in  control  of  the   Company,   or  a  change  in  the   person's
responsibilities following a change in control of the Company.

<PAGE>


Item 11. Security Ownership of Certain Beneficial Owners and Management.



Security Ownership of Certain Beneficial Owners
-----------------------------------------------

    The following  table sets forth the  shareholdings  of those persons who own
more than five percent of the Company's common stock as of the date hereof:

<TABLE>
<CAPTION>
                             Number and Percentage*
                          of Shares Beneficially Owned
                                         ----------------------------
Name and Address                       # of Shares               % of Class
----------------                    --------------------          ---------
<S>                                 <C>                           <C>


Jenson Services, Inc.               104,128                             35%
5525 S. 900 E. Ste. 110
S.L.C., UT 84117

Hugh and Sharon Lambert              46,855                             16%
1670 E. Hidden Valley Club Circle
Sandy, UT 84092


</TABLE>
*Retroactively  reflects  100 for one reverse  split  effective July 23,
     1996.


Security     Ownership    of    Management
--------------------------------

     The following table sets forth the shareholdings of the Company's directors
and executive officers as the date hereof:

<TABLE>


<CAPTION>
                             Number and Percentage
                          of Shares Beneficially Owned
                          ----------------------------
Name and Address                        # of Shares              % of Class
----------------                    --------------------          ---------
<S>                                 <C>                                   <C>
Quinton Hamilton                                         0                 0
2100 E. Bengal Blvd., Apt. H304
S.L.C., UT 84121

Thomas J. Howells                                        0                 0
2071 E. Royal Harvest Way #11
S.L.C., UT 84121

Kathleen L. Morrison                                     0                 0
9352 Sterling Dr.
Sandy, UT 84093
-----------------------------                         -------           -------
All directors and executive
officers as a group (3)                                  0                 0
=============================                         =======           =======

</TABLE>
<PAGE>


Changes in Control
------------------

     There are no present  arrangements  or pledges of the Company's  securities
which may result in a change in its control.


Item 12. Certain Relationships and Related Transactions.


Transactions with Management and Others
---------------------------------------

     On December 8, 1994, the Company's Board of Directors  unanimously voted to
issue 8,645,578 "unregistered" and "restricted" shares of pre-split common stock
to Jenson  Services,  in  consideration  of  $5,000.00  in  consulting  fees and
expenses  incurred by the Company and settled by Jenson  Services.  These shares
are  fully-paid  and were issued to Jenson  Services,  on the basis of par value
(.00001),  on or about December 23, 1994.  Except as indicated above and in Part
I,  Item  I,  there  were  no  material  transactions,   or  series  of  similar
transactions,  during the Company's  last three fiscal  years,  or any currently
proposed transactions,  or series of similar transactions,  to which the Company
or any of its subsidiaries was or is to be a party, in which the amount involved
exceeded  $60,000 and in which any director,  executive  officer or any security
holder who is known to the  Company to own of record or  beneficially  more than
five percent of any class of the Company's  common  stock,  or any member of the
immediate family of any of the foregoing persons, had an interest.



Certain Business Relationships
------------------------------

     Except as indicated in Part I, Item 1, "Business Development," and Item 12,
Part 1, under the heading,  "Transactions  with Management and Others",  of this
caption, there were no material transactions, or series of similar transactions,
during the  Company's  last three  calendar  years,  or any  currently  proposed
transactions,  or  series  of  similar  transactions,  to which it or any of its
subsidiaries  was or is to be a party,  in which the  amount  involved  exceeded
$60,000 and in which any director,  executive officer or any security holder who
is known to the Company to own of record or beneficially  more than five percent
of any class of its common stock,  or any member of the immediate  family of any
of the foregoing persons, had an interest.

<PAGE>

Indebtedness of Management
--------------------------

     Except as indicated in Part I, Item I,  "Business  Development,"  and under
the heading,  "Transactions with Management and Others",  there were no material
transactions, or series of similar transactions, during the Company's last three
calendar years,  or any currently  proposed  transactions,  or series of similar
transactions, to which it or any of its subsidiaries was or is to be a party, in
which the amount involved exceeded $60,000 and in which any director,  executive
officer or any  security  holder who is known to the Company to own of record or
beneficially  more than five  percent of any class of its common  stock,  or any
member of the immediate family of any of the foregoing persons, had an interest.


Transactions with Promoters
---------------------------

     Except as indicated in Part I, Item 1,  "Business  Development",  and under
the heading,  "Transactions with Management and Others",  there were no material
transactions, or series of similar transactions, during the Company's last three
calendar years,  or any currently  proposed  transactions,  or series of similar
transactions, to which it or any of its subsidiaries was or is to be a party, in
which the amount involved  exceeded $60,000 and in which any promoter or founder
or any member of the immediate  family of any of the foregoing  persons,  had an
interest.


Item 13. Exhibits and Reports on Form 8-K.

Reports on Form 8-K
-------------------

None; Not Applicable.

<TABLE>
<CAPTION>

Exhibits*
--------
<S>                                                <C>
                                                  Where Incorporated 
                                                    in this Report
                                                    --------------
          (i)

     Registration Statement on Form 10-SB-A1,          Part I
     as filed on March 4, 1997**

     Annual Report on Form 10-KSB, for the             Part I
     year ending December 31, 1996, as filed on
     March 23, 1997**

     Information Statement as filed on                 Part I
     November 12, 1997**


Exhibit Number                                     Description
--------------                                     -----------

     (27)                                     Financial Date Schedule.

</TABLE>

     *    Summaries of all exhibits contained within this Report are modified
          in their entirety by reference to these Exhibits.

     **   These documents and related exhibits have been previously filed with
          the Securities and Exchange Commission and are incorporated herein by
          reference. 



<PAGE>



                                SIGNATURES

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

                              MICRO HYDRO POWER, INC.



Date:  By/S/3-31-97           By/S/Thomas J. Howells                  
                              Thomas J. Howells,  Vice-President
                              and Director




Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this  Report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated:


                             MICRO-HYDRO POWER, INC.




Date:  By/S/3-31-97           By/S/Thomas J. Howells
                              Thomas J. Howells, Vice-President
                              and Director



Date: By/S/3-31-97            By/S/Kathleen L. Morrison
                              Kathleen L. Morrison, 
                              Sec'y/Treasurer and Director





<PAGE>