MICRO-HYDRO POWER, INC. 10KSB 1996


                           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, 1996.

[ ]     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)

             UTAH                                      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

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      No  X
         ---     ---               ---     ---


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, 1996 - $ - 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 25, 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.
<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:

                               March 25, 1997
                                    300,010*


*Reflects a 100 for 1 reverse split of the outstanding  voting securities of the
Company, effective July 23, 1996, while retaining the authorized capital at $300
divided into 30,000,000  shares of $0.00001 par value common voting stock,  with
appropriate  adjustments in the stated capital and capital  surplus  accounts of
the  corporation,  and  resulting  in a total of 300,000  shares of $0.00001 par
value common voting stock being issued and outstanding;  provided, however, that
no  stockholder's  holdings shall be reduced to less than 100 shares as a result
of the reverse  split;  and provided,  however,  further,  the 100 share minimum
shall  be as  determined  by the  President,  whether  on a  stockholder  or per
certificate basis.


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

     Micro-Hydro Power, Inc. (the "Company") was organized under the laws of the
State of Utah on  September  23,  1980,  under the name Surety  Gold,  Inc." The
Company was  incorporated  for the primary purpose of investing in all phases of
the natural  resource mining industry.  The Company was initially  authorized to
issue a total of  30,000,000  shares  of  common  stock  having  a par  value of
($0.00001) per share, with fully-paid stock not to be liable for further call or
assessment. Copies of the Company's initial Articles of Incorporation,  Articles
of  Amendment  to the  Articles  of  Incorporation  and Bylaws are  attached  as
exhibits to the  Registration  Statement on Form 10-SB, as filed on November 15,
1996 and are incorporated herein by this reference.
See the Exhibit Index, Part III.

     At the Company's inception,  the Board of Directors authorized the issuance
of  4,559,022  "unregistered"  and  "restricted"  shares of its common  stock to
directors,  executive  officers  and  persons  who may be  deemed  to have  been
promoters or founders of the Company for the total consideration of $21,578.68.

     On November 10, 1980,  the Company filed with the Secretary of State of the
State of Utah an Article of  Amendment to the  Articles of  Incorporation  which
changed  the name of the  Company to  Micro-Hydro  Power,  Inc.  The date of the
adoption of the amendment by the shareholders was October 13, 1980, at the time,
there were 4,559,022 shares of stock outstanding in the company, with no classes
or series,  all of such stock being  denominated as common voting stock.  All of
said shares were voted in favor of the amendment being  4,559,022  shares voting
in  the   affirmative.   The  Amendment   does  not  provide  for  an  exchange,
reclassification  or  cancellation of issued shares or a change in the amount of
stated  capital.  A copy  of the  Articles  of  Amendment  to  the  Articles  of
Incorporation  is attached as an exhibit to the  Registration  Statement on Form
10-SB,  as  filed  on  November  15,  1996 and is  incorporated  herein  by this
reference. See the Exhibit Index, Part III.

     Beginning  December  8, 1980,  and  pursuant  to an  exemption  provided in
Section 3(a)(11) of the Securities Act of 1933, as amended (the "1933 Act"), and
Section 61-1-10 of the Utah Uniform Securities Act, the Company publicly offered
and sold an aggregate  total of 10,000,000  shares of its common stock to public
investors  who were  residents  of the State of Utah,  at a price of ($0.01) per
<PAGE>

share.  The  offering  was  completed  on  December  8, 1981,  with the  Company
receiving  aggregate  gross  proceeds  of  $100,000,  before  payment  of legal,
accounting  and  printing  expenses.  A copy of the Offering  Circular  that the
Company used in  connection  with this offering is attached as an exhibit to the
Registration  Statement  on Form  10-SB,  as filed on  November  15, 1996 and is
incorporated herein by this reference. See the Exhibit Index, Part III.

     Following the completion of its public  offering,  the Company entered into
two phases of business activity: the research,  development,  sale, manufacture,
distribution,  maintenance,  and  operation  of  micro-hydro  power  units which
consist of water-powered  electrical generating machines,  and the engagement in
all aspects of the natural  resource  mining  industry.  These  operations  were
unsuccessful and the Company ceased business operations in November of 1988.

     On September 20, 1996, the Company filed with the Secretary of State of the
State of Utah  Articles of  Amendment to its  Articles of  Incorporation,  which
provided  for a reverse  split the  Company's  30,000,000  of $0.00001 par value
common stock on a basis of one for 100, while retaining the authorized shares at
30,000,000 and the par value at $0.00001 per share, with appropriate adjustments
being made in the additional paid in capital and stated capital  accounts of the
corporation, resulting in a total of 300,010 shares of $0.00001 par value common
voting  stock  being  issued  and  outstanding;   provided,   however,  that  no
stockholders holding shall be reduced to less than 100 shares as a result of the
reverse split; and provided, however, further, the 100 share minimum shall be as
determined by the President, whether on a stockholder or per certificate basis.;
and (ii) the amendment  adopting the reverse split of the Company's common stock
was adopted by the  stockholders at a meeting held July 23, 1996, at which time,
15,123,100 of the Company's  30,000,000 issued and outstanding  shares of common
stock  voted in favor of the  reverse  split;  and (iii) The  amendment  was not
adopted  by the  incorporators  or the Board of  Directors  without  stockholder
action.  A copy of the Articles of  Amendment  to the Articles of  Incorporation
effecting these changes is attached as an exhibit to the Registration  Statement
on Form 10-SB, as filed on November 15, 1996, and is incorporated herein by this
reference. See the Exhibit Index, Part III



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.


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; 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,  1996 and 1995,  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 the Index to Financial Statements, Note 2.
<PAGE>
     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.
Because the Company has not yet identified any assets, property or business that
it may  potentially  acquire,  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 identified a potential
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.

     Unspecified Industry and Acquired Business; Unascertainable Risks. To date,
the Company has not identified  any particular  industry or business in which to
concentrate  its  acquisition  efforts.   Accordingly,   prospective   investors
currently  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,  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.

     Uncertain  Structure  of  Acquisition.  Management  has had no  preliminary
contact or discussions  regarding,  and there are no present plans, proposals or
arrangements to acquire any specific assets, property or business.  Accordingly,
it is unclear whether such an acquisition  would take the form of an exchange of
capital stock, a merger or an asset  acquisition.  However,  because the Company
has  virtually no resources  as of the date of this Report,  management  expects
that any such acquisition would take the form of an exchange of capital stock.

     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,  Inc.,  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, Inc., 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 April 2,
1998,  all of Jenson  Services  Stock  will have been  officially  owned for one
years,  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  Registration
Statement.

     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  on or  before  1984,  and may be sold  under  the
applicable provisions of Rule 144 of the Securities and Exahange Commission. For
additional  information  concerning  common  stock  ownership  of Mr.  and  Mrs.
Lambert, see Part III, Item 9 of this Registration Statement.

     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 they 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
intends to submit for listing of its common stock on the OTC  Bulletin  Board of
the National  Association  of Securities  Dealers,  Inc. (the "NASD"),  there is
currently  no 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 Item 5, Part
II, 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.  At such time as the  Company  completes a merger or
acquisition  transaction,  if at all,  it may  attempt to qualify for listing on
either NASDAQ or a national  securities  exchange.  However, at least initially,
any  trading  in  its  common  stock  will  most  likely  be  conducted  in  the
over-the-counter  market in the "pink sheets" or the "Electronic Bulletin Board"
of the National Association of Securities Dealers, Inc. (the "NASD").
<PAGE>

     There are presently no market makers for the Company's common stock. In the
event  that  it is  unsuccessful,  after  completing  a  merger  or  acquisition
transaction, in obtaining a listing on NASDAQ or a national securities exchange,
it 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. Mr. Hamilton has been involved as an officer and director of
Olympus  M.T.M.  Corporation  since July 1996. At this time,  Olympus M.T.M.
Corporation,  Inc., 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, now known as "Phoenix Associates Land Syndicate", from January 1996
until its  reorganization  in October 1996.  Ro-Mac Gold, Ltd., 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 from April
1995 to September 1995.  During this period,  React Systems,  Inc. 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.
At this time,  United States Mining and Exploration,  Inc. may be deemed to be a
"blank  check"  company.  Other than the  aforementioned,  Mr.  Howells has been
neither an officer, director of affiliate of any "blank check" companies for the
previous 5 years.

     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 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.,  from  January  1995 until its  reorganization  in July,  1995.
Tengasco,  Inc., 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.  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.
<PAGE>

     Jenson  Services,  Inc.,  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,  Inc., a Utah corporation,  and financial  consulting
firm ("Jenson Services"),  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.


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

     On July 23, 1996, a special meeting of the  stockholders of the Company was
held.  Present in person or by proxy  were  15,123,100  shares of common  voting
stock, representing a quorum of the 30,000,000 issued and outstanding shares. It
was unanimously resolved, without any dissenting votes, as follows, to-wit:

          1.   That Jeffrey D. Jenson,  Kathleen L. Morrison and Thomas J.
               Howells be elected as directors  until the next annual meeting
               of the  stockholders and until their  successors  shall be
               elected and  qualified,  and that Mr. Jenson serve as President,
               Mr.  Howells  serve as Vice  President and Ms. Morrison serve as
               Secretary; and

        2.     That the outstanding voting securities of the Company be reverse
               split on the basis of 100 shares for one, while retaining the
               authorized capital at $300 divided into 30,000,000 shares of
               $0.00001 par value common voting stock, with appropriate
               adjustments in the additional paid in capital and stated capital
               accounts of the Company; provided, however, that no stockholder's
               holdings shall be reduced to less than 100 shares as a result of
               the reverse split; and provided, however, further, the 100 share
               minimum shall be as determined by the President, whether on a
               stockholder or per share basis.

<PAGE>

                                     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  intends to submit for a quotation  of is common  stock the OTC Bulletin
Board of the National  Association  of  Securities  Dealers  ("NASD");  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 past or present members of management
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 25,
1997  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.


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, 1996, or since on 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.

     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.
Management  does not anticipate  that the Company will have to raise  additional
funds during the next 12 months.


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, Inc.


Item 7.  Financial Statements.

For the periods ended December 31, 1996 and 1995
------------------------------------------------

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, 1996 and 1995










<PAGE>


                                    MICRO-HYDRO POWER, INC.




                                       TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S>                                                                              <C>

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


        Balance Sheet - December 31, 1996 and 1995. . . . . .                        2


        Statements of Operations for the
        years ended December 31, 1996 and
        December 31, 1995 . . . . . . . . . . . . . . . . . .                        3


        Statements of Stockholders' Deficit for
        the years ended December 31, 1996 and
        December 31, 1995 . . . . . . . . . . . . . . . . . .                        4


        Statements of Cash Flows for the
        years ended December 31, 1996 and
        December 31, 1995 . . . . . . . . . . . . . . . . . .                        5


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





</TABLE>


<PAGE>


MANTYLA, McREYNOLDS                                   Donald G. Mantyla, C.P.A.
AND ASSOCIATED, C.P.A'S                               Kim G. McReynolds, C.P.A.
A Professional Corporation                            James C. Oveson, C.P.A.
                                                         -------------------
                                                      S. Andrew Trumbo, C.P.A.
                                                      Randall H. Gray, C.P.A.
                                                      Jon E. Lelegren, C.P.A.




                                 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, 1996 and 1995,  and the related  statements  of  operations,
stockholders'  deficit, and cash flows for the years ended December 31, 1996 and
1995.  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, 1996 and 1995,  and the results of their  operations  and their
cash flows for the years ended  December 31, 1996 and 1995, 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 9, 1997





<PAGE>
<TABLE>
<CAPTION>



                                    MICRO-HYDRO POWER, INC.
                                         Balance Sheet
                                  December 31, 1996 and 1995


<S>                                                      <C>                    <C>


ASSETS                                                       1996                  1995
------                                                       ----                  ----

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

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



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

Current Liabilities:
        Income taxes payable                              $    100              $     764
        Accounts payable                                     2,894                  2,619
        Stockholder loan - Note 4                            5,293                  2,064
                                                             -----                  -----
               Total Current Liabilities                     8,287                  5,447

               Total Liabilities                             8,287                  5,447

Stockholders' Deficit:
        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                               (172,266)              (169,426)
                                                          --------               --------
               Total Stockholders' Deficit                  (8,287)                (5,447)
                                                            ------                 ------

                      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, 1996 and December 31, 1995


<S>                                                      <C>          <C>

                                                              1996         1995
                                                              ----         ----

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

               Total Revenue                                     -0-          -0-


General and Administrative Expenses                             2,640        2,064
                                                                -----        -----

               Net Income Before Taxes                         (2,640)      (2,064)

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

               Net loss                                   $    (2,840) $    (2,164)
                                                          ===========  ===========


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, 1996 and December 31, 1995


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


                                                              Additional                               Net
                                      Common     Common         Paid in         Accumulated       Stockholders'
                                      Shares      Stock         Capital           Deficit            Deficit
Balance, December 31, 1994
  Restated for split (note 5)          300,010  $      3    $   163,976         $  (167,262)      $   (3,283)

Net loss for the year ended
 December 31, 1995                                                                   (2,164)         (2,164)
                                                                                      ------          ------
Balance, December 31, 1995             300,010  $      3    $   163,976         $  (169,426)       $  (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)
                  === ====             =======  =========    ===========        ===========        =========






                 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, 1996 and December 31, 1995

<S>                                                      <C>                    <C>

                                                              1996                 1995
                                                              ----                 ----

Cash Flows Provide by/(Used for)
  Operating Activities:
Net Loss                                                  $  (2,840)            $  (2,164)
Adjustments to reconcile net income
 to net cash used for operating
 activities:
         Expenses paid on behalf
          of company by a
          stockholder                                         3,229                 2,064

        Increase in accounts payable                            275

        Increase(decrease)in taxes payable                     (664)                  100
                                                               ----                   ---

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                                                    $     907             $     -0-
                                                             =========              =======








                        See accompanying notes to financial statements

                                              5
</TABLE>
<PAGE>

                                   MICRO-HYDRO POWER, INC.
                                Notes to Financial Statements
                                      December 31, 1996



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, 1995.

               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,
               1996  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, 1996.




                                                     6


<PAGE>




Note 2         Liquidity

               The Company has  accumulated  losses  through  December  31, 1996
               amounting to $172,266,  has no assets,  has a net working capital
               deficiency  of  $8,287  at  December  31,  1996,   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,
               1996 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 $3,229 during 1996 and $2,064 during 1995.  The company
               has recorded a liability for these  expenses to the  stockholder.
               This unsecured loan bears no interest and is due on demand.




                                                     7
<PAGE>




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,
               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.






                                                     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 years ending  December 31, 1995 and 1996,  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

Jeff D. Jenson               President             12-22-93             09-03-96
                             & Director

Travis T. Jenson             Vice President        11-15-94             08-12-96
                             & 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,  Secretary,  Treasurer and Director is 25 years old. Mr.
Hamilton  attended the  University  of Utah from 1990 to 1995,  at which time he
graduated   with  a  B.A.   Mr.   Hamilton   has  been  working  as  an  account
representative/coordinator  with  the  marketing  firm  of  Scopes,  Garcia  and
Carlisle, located in Salt Lake City, Utah, for the past two years
<PAGE>

     Thomas J. Howells, Director and Vice President is 24 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 year. 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 Intelligence.

     Kathleen L. Morrison, Director and Secretary/Treasurer. Mrs. Morrison is 40
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
--------------------

     Jeff D. Jenson and Travis T. Jenson, whom are former officers and directors
of the Company are brothers.  Jeff D. and Travis T. Jenson are also employees of
Jenson Services,  Inc. a consultant to the Company. In addition,  Jeff D. Jenson
is Vice-President of Jenson Services.


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  him  from or  otherwise  limiting,  the
following activities:

     (i) Acting as a futures commission merchant,  introducing broker, commodity
trading advisor,  commodity pool operator,  floor broker,  leverage  transaction
merchant,  associated  person  of  any  of the  foregoing,  or as an  investment
adviser,  underwriter,  broker  or  dealer in  securities,  or as an  affiliated
person,  director or employee of any investment company,  bank, savings and loan
association  or insurance  company,  or engaging in or continuing any conduct or
practice in connection with such activity;

     (ii)   Engaging in any type of business practice; or

     (iii)  Engaging in any activity in connection  with the purchase or sale of
any  security or  commodity or in  connection  with any  violation of federal or
state securities laws or federal commodities laws;

     (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 or by
the  Securities  and Exchange  Commission  to have violated any federal or state
securities  law,  and the  judgment  in such  civil  action  or  finding  by the
Securities  and  Exchange   Commission  has  not  been  subsequently   reversed,
suspended, or vacated; or

     (6) Was found by a court of competent  jurisdiction in a civil action or by
the  Commodity   Futures  Trading   Commission  to  have  violated  any  federal
commodities  law,  and the  judgment  in such  civil  action or  finding  by the
Commodity  Futures  Trading  Commission  has  not  been  subsequently  reversed,
suspended or vacated.
<PAGE>


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

     In con-junction with Section 16(a) of the Exchange act, the following table
identifies the "reporting  persons" which have filed Form 3, "Initial  Statement
of Beneficial Ownership of Securities".

<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>

<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      (#)       ($)       Compensa-
           1994,                      sation($)                                 tion ($)
           1995 &
           1996

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
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
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, 1996,  1995 or 1994, 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.


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

<PAGE>

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

Jeffrey D. Jenson**                                104,128                35%
Jenson Services, Inc.
5525 S. 900 E. #110
S.L.C., UT 84117

Travis T. Jenson                                         0                 0
5525 S. 900 E. #110
S.L.C., UT 84117




</TABLE>
*Retroactively reflects 100 for one reverse split effective July 23, 1996.
**These individuals may be considered beneficial owners of the aforementioned
     shares due to certain business relationships.
<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
---------------------------------------

     Except as indicated in Item 1, Part I, "Business  Development,"  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 Item 1, Part I, "Business  Development,"  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 Item 1, Part I, "Business  Development,"  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 Item 1, Part I, "Business  Development,"  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>
(3.1)          Initial Articles of Incorporation**

(3.2)          Articles of Amendment to the Articles of Incorporation
                  dated 11-07-80**

(3.3)          Articles of Amendment to the Articles of Incorporation
                  dated 09-20-96**

(3.4)          By-Laws**



</TABLE>

     *A summary of any Exhibit is modified in its  entirety by  reference to the
actual  Exhibit.

     **These  documents and related  exhibits were filed with the Securities and
Exchange Commission as exhibits to the Company's  Registration Statement on Form
10-SB on November 15, 1996 and are incorporated herein by this 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:/S/3-31-96               By/S/Quinton Hamilton
                              Quinton N. Hamilton, President
                              and Director



Date:/S/3-31-96               By/S/Thomas J. Howells
                              Thomas J. Howells, Vice President
                              and Director



Date:/S/3-31-96               By/S/Kathleen L. Morrison
                              Kathleen L. Morrison,
                              Sec'y/Treasurer 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/ 3-31-96                         By/S/Quinton Hamilton



Date:  By/S/ 3-31-96                         By/S/Thomas J. Howells



Date:  By/S/ 3-31-97                         By/S/Kathleen L. Morrison