FORM 10-K/A

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

(MARK ONE)
[X]	 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934 [NO FEE REQUIRED]
     FOR THE FISCAL YEAR ENDED OCTOBER 31, 1997   COMMISSION FILE NUMBER: 0-7235

[X]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
     FOR THE TRANSITION PERIOD FROM ................ TO ................

                           FEDERATED PURCHASER, INC.
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              NEW YORK                                  22-1589344
    (STATE OR OTHER JURISDICTION                     (I.R.S. EMPLOYER
  OF INCORPORATION OR ORGANIZATION)               IDENTIFICATION NUMBER)

        268 CLIFFWOOD AVENUE
        CLIFFWOOD, NEW JERSEY                              07721
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                (ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE: (732) 290-2900
                               _________________

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                             TITLE OF EACH CLASS:

                         Common Stock, $.10 par value

   Indicate  by  check  mark  whether  the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d)  of  the Securities Exchange Act of
1934  during  the  preceding  12 months (or for such shorter  period  that  the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
                                  Yes    X   No ______

   Indicate by check mark if disclosure  of  delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein,  and  will  not be contained, to
the  best  of  the Registrant's knowledge, in definitive proxy  or  information
statements incorporated  by  reference  in  Part III of this Form 10-K/A or any
amendment to this Form 10-K/A.  [ X ]

   The aggregate market value of the 1,158,240  shares  of  the common stock of
the Registrant held by non-affiliates on January 7, 1998 based upon the average
of the bid and asked prices was approximately $122,158.  The  number  of shares
of  the  registrant's  common  stock  outstanding  as  of  January  7, 1998 was
1,611,317 shares, par value $.10 per share.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                     None


<PAGE>
   This  Amendment 2 on Form 10-K/A to the Registrant's Annual Report  for  the
year ended  October 31, 1997 on Form 10-K is submitted to reflect the amendment
of Items 7 and 8.  No other Items of the Registrant's Annual Report on Form 10-
K are amended.

   Federated Purchaser, Inc. ("Federated") announced on October 1, 1997 that it
has signed an  agreement (the "Agreement") with Wise Components, Inc. ("Wise"),
and its chairman  and  sole shareholder, Martin L. Blaustein ("Mr. Blaustein"),
under which Federated will  issue  4,491,988  shares of its common stock to Mr.
Blaustein in a tax-free exchange (the "Exchange")  for  all  of the outstanding
shares  of  Wise's  stock.   Upon  closing,  Wise  will  become  a wholly-owned
subsidiary  of  Federated  and Mr. Blaustein will become Federated's  principal
shareholder,  owning  approximately  74%  of  Federated's  common  stock.   The
remaining 26% will continue  to  be  held by current shareholders of Federated.
The Agreement also provides that upon  the  occurrence of certain events during
the  six  months  subsequent to the Exchange, Federated  may  issue  up  to  an
additional 390,656  shares  of  Common  Stock to Mr. Blaustein.  Accordingly, a
total of 4,882,644 shares of Common Stock are to be issued.

   A Current Report on Form 8-K reporting  the  Exchange  was  filed  with  the
Securities and Exchange Commission on October 1, 1997.




                             -1-

<PAGE>
                                    PART I

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS.

      The  Company  has experienced significant operating losses throughout the
past five operating periods.  For fiscal 1997, fiscal 1996, fiscal 1995, fiscal
1994, and fiscal 1993,  the  Company  incurred  losses  of  $281,901, $414,826,
$546,062, $373,849, and $315,621, respectively.  As a result  of  negative cash
flows associated with these losses, as of October 31, 1997, working capital had
decreased 88.5% to $274,835 from $2,389,580 at October 31, 1991 and the Company
had  an  accumulated  deficit  of  $1,335,234.  While management is seeking  to
address these problems by increasing  sales and reducing operating costs, there
can be no assurances that the Company will  be  successful  in  its  efforts to
improve  either  its  liquidity  position  or  operating results.  In addition,
because the Company currently has no access to any  outside  source  of capital
(except for an existing equipment financing arrangement), management must  meet
its  short-term  capital requirements solely from cash from operations (if any)
and existing cash reserves.  There can be no assurances that the Company's cash
reserves will be sufficient  to  satisfy  the Company's capital requirements or
that the Company's inability to obtain capital  from  outside  sources will not
force  the Company to seek protection under the United States Bankruptcy  Code.
While there  can  be  no  assurances,  management  believes  that  the Proposed
Transaction  will  improve  the  Company's  operating performance and financial
condition.  See Note 14 - Consolidated Financial Statements.

      In  November  1994, the Company divested  its  subsidiary,  Freedom.   In
accordance with generally  accepted  accounting  principles, the divestiture of
the  operations  of  Freedom  has  not  been accounted for  as  a  discontinued
operation because Freedom was not a separate  business  entity.   As  a result,
management's  discussion  compares (i) the Company's results of operations  for
fiscal  1996  (which  do not include  Freedom)  to  the  Company's  results  of
operations for fiscal 1995  (which  do not include Freedom), (ii) the Company's
results of operations for fiscal 1995  (which  do  not  include Freedom) to the
Company's  results  of operations for fiscal 1994 (which include  Freedom)  and
(iii) Federated's results  of  operations  for  fiscal  1995 to Federated's Pro
Forma results for fiscal 1994 (which include Freedom). Management believes this
approach more accurately reflects the Company's recent financial performance.

      RESULTS OF OPERATIONS

      The Company recognized a net loss of $281,901 for the  year ended October
31, 1997 on net sales of $3,252,670, as compared to a net loss  of $414,826 for
the year ended October 31, 1996 on net sales of $3,980,560, and a  net  loss of
$546,062  for the year ended October 31, 1995 on net sales of $4,118,799.   The
loss of $546,062  for  the  year  ended  October  31,  1995  included a loss of
$182,791  on  the divestiture of the Company's subsidiary, Freedom  Electronics
Corp. ("Freedom").

      Despite the  relative  improvement  in  the  magnitude  of  the loss when
compared with the years ended October 31, 1996 and 1995, the loss represents  a
continuation  of repeated significant operating losses experienced by Federated
since prior to  1992.  As a result of negative cash flows associated with these
losses, as of October  31,  1997, working capital had decreased to $274,835 and
Federated  had  an  accumulated   deficit  of  $1,335,234.   Because  Federated
currently  has  no access to any outside  source  of  capital  (except  for  an
existing equipment  financing arrangement), management must meet its short-term
capital requirements  solely  from  cash  from operations (if any) and existing
cash reserves.  At October 31, 1997, Federated's  cash  reserves  were $69,358.
There can be no assurances that Federated's cash reserves will be sufficient to
satisfy  Federated's  capital  requirements  or  that Federated's inability  to
obtain capital from outside sources will not force Federated to seek protection
under the United States Bankruptcy Code.  While there  can  be  no  assurances,
management  believes  that  the Proposed Transaction will improve the Company's
operating performance and financial  condition.   See  Note  14  - Consolidated
Financial Statements.


                             -2-

<PAGE>

      Net sales were $3,252,670 for the year ended October 31, 1997 as compared
to $3,980,560 for the year ended October 31, 1996, or a decrease of $727,890 or
18.2%  over  the  prior  year.   Net  sales were $3,980,560 for the year  ended
October 31, 1996 as compared to $4,118,799 for the year ended October 31, 1995,
a decrease of $138,239 or 3.4% over the  prior year.  The decrease in sales for
the year 1997 as compared to 1996 of $727,890 and the decrease in sales for the
year  1996  as compared to 1995 of $138,239  is  due  to  intense  competition,
particularly in the Northeast United States, and trends adversely affecting the
electronics industry  as  a  whole  (as described in more detail below).  These
competitive circumstances have continued  to  reduce  Federated's sales volume,
which,  along  with gross margins, must improve in the short-term  and  in  the
long-term, for Federated  to  reverse  its negative results of operations.  The
likelihood of achieving the necessary increases  in both sales volume and gross
margins continues to be compromised by several factors,  including  the loss of
certain customers due to the departure of key sales personnel, intense industry
competition  which  has resulted in management seeking additional sales  volume
through price reductions,  and  certain  other  industry trends which adversely
impact   smaller   electronics   distributors.    These  trends   include   the
consolidation  of  other  small  distributors,  the  increase  in  the  use  of
technology (which Federated's limited capital resources  have  not permitted it
to  acquire),  the  diminished  availability  of  capital  within the business,
marketplace  changes  favoring  value-added  services,  and  the  reduction  of
franchises by major vendors.  While management continues its effort  to improve
sales volume while preserving Federated's current customer base, there  can  be
no  assurances  that  management will succeed in achieving the sales increases,
improved margins and cost reductions which are necessary to reverse Federated's
negative results of operations.

      Cost of sales were  $2,493,482  or  76.6%  of  sales  for  the year ended
October 31, 1997 as compared to $3,128,019 or 78.6% of sales for the year ended
October  31,  1996 and $3,172,060 or 77.0% of sales for the year ended  October
31, 1995.  The  decrease in cost of sales for the years ended October 31, 1997,
1996 and 1995 are  the  result  of  Federated's  decrease in sales volume.  The
gross  profit  percentage for the year ended October  31,  1997  was  23.4%  as
compared to 21.4%  for  the  year ended October 31, 1996 and 23.0% for the year
ended October 31, 1995.  The increase  of  2.0%  in gross profit percentage for
the  year  ended October 31, 1997 when compared to October  31,  1996,  is  the
result of management's  attempt  to  increase  sales  prices  to  customers and
decrease prices paid to suppliers.  The decrease in gross profit percentage  of
1.6% from 23.0% for the year ended October 31, 1995 to 21.4% for the year ended
October  31,  1996  was the result of increased competition within the industry
and management's decision  to attempt to improve the Company's sales volume and
operating results by reducing  prices  to  its  customers.   There  can  be  no
assurances  that  the  minor  improvement  in  Federated's  gross margin can be
sustained, or that lower gross profits associated with the reduction  in  sales
volume  will  not  force  Federated  to seek protection under the United States
Bankruptcy Code.

      Selling, shipping and general and  administrative ("SSG&A") expenses were
$1,061,382 for the year ended October 31,  1997, compared to $1,286,444 for the
year ended October 31, 1996 and $1,353,609 for the year ended October 31, 1995.
Fiscal year 1997 thus showed a decrease in SSG&A  of  $225,062 when compared to
year  ended October 31, 1996.  The decrease of $225,062  is  the  result  of  a
reduction of sales salaries of 18.6%, a reduction of administrative salaries of
14.0% a  reduction  of  telephone  expense  of 32.2% and a reduction of general
expenses of 36.2%.  The decrease of $225,062  for  the  year  ended October 31,
1997  when  compared  to  the year ended October 31, 1996 represented  a  17.4%
decrease in SSG&A expenses.  SSG&A expenses for the year ended October 31, 1996
were $1,286,444 compared to  $1,353,609  for the year ended October 31, 1995, a
decrease of $67,165 over the prior year.  The decrease of $67,165 is the result
of a reduction in warehouse salaries of 48.6%,  a  reduction  of administrative
salaries of 10.3%, a reduction of insurance costs of 36.0%, a reduction  of bad
debt  expense  of  64.1%,  partially offset by an increase in sales salaries of
7.7%.  Management anticipates that further reductions in SSG&A expenses will be
necessary to reverse Federated's negative results of operations.

      Interest earned on the  Company's cash reserves and notes receivable were
$11,054 for the year ended October 31, 1997 as compared to $14,830 for the year


							 -3-

<PAGE>


ended October 31, 1996 and $32,530  for  the  year ended October 31, 1995.  The
decrease of $3,776 for the year ended October 31,  1997  as compared to October
31, 1996 was attributable to lower cash balances, which continue to deteriorate
as  a  result  of  the  Company's  operating  losses and lower note  receivable
balances.  The decrease of $17,700 for the year  ended  October  31,  1996 when
compared  to  October  31,  1995 was due to lower cash balances as a result  of
recurring operating losses.

      LIQUIDITY AND CAPITAL RESOURCES

      The Company's liquidity  position  has been and continues to be adversely
affected by a variety of factors, including  the  $281,901  loss  for  the year
ended  October  31,  1997, the loss of $414,826 for the year ended October  31,
1996 and the loss of $546,062  for  the year ended October 31, 1995.  Moreover,
the Company's liquidity position may  be  further  negatively  impacted  to the
extent   that   certain  trends,  including  intense  competition  from  larger
competitors in the  electronics industry and the migration of certain customers
from smaller to larger  distributors,  continue  to  decrease Federated's sales
levels, gross profit margins, or both.  While Federated enhanced its short-term
liquidity position when it received a one-time cash payment  of  $755,845  from
its  November 15, 1994 divestiture of a former subsidiary, Freedom Electronics,
those  proceeds  have  been  used to sustain operations since that time.  Thus,
Federated's ability to satisfy its fixed costs of operations in the future will
depend upon management's success  in increasing sales, improving gross margins,
reducing operations costs, securing  additional  lines  of  credit from outside
lenders  or  entering  into  strategic alliances.  Due to Federated's  impaired
liquidity position, negative financial performance, reliance on cash to sustain
operations and certain other factors,  Federated's  independent  auditors raise
substantial doubt regarding Federated's ability to continue as a going  concern
in Federated's annual report for the year ended October 31, 1997.  If Federated
is  not successful in achieving any or all of its strategic objectives, it  may
have  to  seek protection under the United States Bankruptcy Code.  While there
can be no assurances,  management  believes  that the Proposed Transaction will
improve  the  Company's  operating performance and  financial  condition.   See
"Going Concern Question",  below,  and  Note  14  to the Consolidated Financial
Statements.

      Cash and cash equivalents decreased by $26,560 for the year ended October
31, 1997 as compared to a decrease of $90,597 for the  year  ended  October 31,
1996  and  an increase of $23,655 for the year ended October 31, 1995.   During
the year ended  October  31,  1997,  the  Company used net cash of $71,461 from
operating activities primarily from the net  loss  of  $281,901,  a decrease of
$118,762  in  accounts receivable, a decrease of $85,864 in inventories  and  a
increase of $30,741  in  accounts  payable  and  accrued expenses.  The Company
generated cash of $55,525 for the year ended October 31, 1997, primarily though
collections of a note receivable from Freedom Electronics  of  $55,000.  During
the year ended October 31, 1997, the Company used cash of $10,624  for payments
on long-term debt.

      During  the  year  ended  October 31, 1996, the Company used net cash  of
$190,456 from operating activities,  primarily  because of the net loss for the
year, the decrease of $77,835 in inventories and  the  increase  of $127,913 in
accounts payable and accrued expenses.  The Company generated cash  of $110,601
for  the year ended October 31, 1996, primarily through the receipt of  $99,744
on the  redemption  of  marketable  securities and the collection of $35,000 in
notes receivable; these decreases were partially offset by the $23,672 increase
in association membership costs.  The collection of $35,000 in notes receivable
is due to Federated's renegotiation of  certain  terms relating to debt owed by
Freedom to Federated as a result of the divestiture.   During  the  year  ended
October  31,  1996,  the Company used cash of $10,742 for payments on long-term
debt.

      During the year  ended  October  31,  1995,  the Company used net cash of
$474,722 from operating activities, primarily because  the  net  loss  for  the
year.  The Company generated cash from investing activities of $573,001 for the
year  ended  October  31,  1995,  primarily  from  the $755,845 proceeds on the
divestiture  of  Freedom,  and  used  cash of $286,224 to  purchase  marketable
securities, while redeeming marketable securities of $192,439.  During the year

							 -4-

<PAGE>

ended October 31, 1995, the Company used  cash  of  $74,624  to  pay off a note
payable in the amount of $63,999 and long-term debt in the amount  of  $10,625.
The note was pursuant to a credit line agreement with New Jersey National Bank,
which  had  previously  been  withdrawn  by  the bank.  The note was secured by
accounts receivable and inventory of the Company.  As part of the consideration
received in connection with the divestiture of  Freedom, Federated was relieved
of its obligations under a note payable to United  Jersey Bank in the amount of
$250,000.  Federated had been a guarantor of this obligation of Freedom.

      Based upon the Company's continuing losses, the  Company  has experienced
periods of declining cash balances, which have negatively impacted the accounts
payable balances of trade creditors.  The Company has been slow in  the payment
of its accounts payable and approximately 47% of its accounts payable  are over
30 days old and 21% are over 60 days old as of October 31, 1997.  On open trade
accounts  payable for unsecured creditors, the Company has no knowledge of  any
pending or  threatened  legal  actions  which  would  force  the  Company  into
bankruptcy.   As  of  October 31, 1997, open trade accounts payable and accrued
expenses for unsecured  creditors totaled $500,463.  Secured creditors on long-
term debt, namely for the purchase of computer equipment totaled $8,331.  As of
October 31,1996, open trade accounts payable and accrued expenses for unsecured
creditors totaled $469,712, and secured creditors on long-term debt, namely for
the purchase of computer  equipment  totaled  $18,955.  The Company anticipates
that the increased cash flow and greater efficiency resulting from the Exchange
will enable it to resume a current payment schedule, and plans to do so as soon
as it becomes practicable.

      CAPITAL RESOURCES - WORKING CAPITAL REQUIREMENTS

      Federated  currently  has no access to any  outside  source  of  capital,
except  for  approximately  $8,300  outstanding  under  an  existing  equipment
financing arrangement.  While  management  continues  to  seek  new  sources of
financing from other financial institutions, no such arrangements has  yet been
established.  As a result, management must meet substantially all of its short-
term capital requirements from cash from operations (if any) and existing  cash
reserves  which  continue to deteriorate as a result of the Company's recurring
operating losses.   There  can be no assurances that the Company's current cash
reserves will be sufficient  to satisfy the Company's financing requirements or
that the Company's inability to  obtain  capital  from outside sources will not
impair  its  ability  to  continue future operations. While  there  can  be  no
assurances, management believes  that the Proposed Transaction will improve the
Company's  operating  performance and  financial  condition.   See  Note  14  -
Consolidated Financial Statements.

      A  supplier  of  electronic   parts  to  Federated  Purchaser  terminated
Federated  Purchaser's  franchise  agreement   as   an   Industrial  Electronic
Distributor effective July 1, 1997.  Federated expects to  continue  to be able
to  obtain  electronic parts from the supplier through a cooperative purchasing
group.

      Federated  maintains  its  records  on  the  accrual basis of accounting.
Income  is  recorded  when  earned  and  expenses are recorded  when  incurred.
Federated's accounting policies with respect to customer right of returns is to
require written authorization by Federated,  except  for  special  order items,
which are handled on a case by case basis.

      The  Company's  balance  sheet  reflects working capital of $274,835  and
$490,614 at October 31, 1997 and 1996,  respectively, a decrease of $215,779 or
43.9% for the year 1997.

      The Company's stockholders' equity  amounted  to  $468,006 at October 31,
1997, equivalent to a book value per common share of $.29.   As  of October 31,
1996, stockholders' equity amounted to $749,907 equivalent to a book  value per
common share of $.47.

      On October 1, 1997, Federated Purchaser, Inc. signed an agreement whereby
Federated  will  acquire  all  of  the  outstanding  shares  of  stock  of Wise
Components,  Inc.  in  an  exchange  of  stock which will be accounted for as a
purchase.

							-5-

<PAGE>

      On November 15, 1994, by unanimous vote  of all non-interested directors,
Federated  divested  its  subsidiary,  Freedom.   In   consideration   of   the
divestiture  of  100%  of the outstanding shares of Freedom, Federated received
approximately $360,500,  including $100,000 in cash, a $210,000 promissory note
and 88,889 shares of common  stock  of  Federated  (representing  4.9%  of  the
outstanding class of common shares) held personally by Freedom's President.  In
addition, the parties entered into customary covenants not to compete, pursuant
to  which Federated became entitled to receive $90,000 over a four year period.
As part of this transaction, certain intercompany indebtedness to Federated was
satisfied  by  payment  of an additional $656,000.  While there are no written,
oral or other binding agreements  between Federated and Freedom regarding their
ongoing business relationship, both  Federated  and  Freedom anticipate selling
certain goods to each other on mutually beneficial terms.   During  the  period
November  16,  1994  to  October 31, 1995, the period immediately following the
divestiture of Freedom, Freedom  sold  goods  to  Federated  in  the  amount of
$76,112 and Federated sold goods to Freedom for $69,193.  During the year ended
October 31, 1996, Federated purchased goods from Freedom totaling $776  and did
not  sell  any  goods to Freedom during the same period.  During the year ended
October 31, 1997, Federated did not purchase any goods from Freedom, nor did it
sell any goods to Freedom.

      The loss on  the  divestiture of Freedom amounted to $182,791 or $.11 per
share.

      GOING CONCERN QUESTION

      The Company is addressing  the  threat  to  its  ability to continue as a
going concern primarily by pursuing the Exchange with Wise  and  Mr. Blaustein,
and by continuing its efforts to diminish costs and increase sales  --  both of
which will be much easier to attain with the addition of Wise's resources.   It
is  estimated  that  $150,000 would constitute sufficient funds to overcome the
threat to Federated's  ability  to  continue  as  a  going  concern.  Under the
Exchange, neither Wise nor Blaustein have committed to provide these funds, and
it  is  doubtful  that  the  Company  will be able to raise these funds  either
through results of operations or by other  means.  Based on Federated's current
impaired liquidity, in the event the Exchange  is  not  consummated, management
believes  that  Federated  can continue operations for the next  two  to  three
months without the protection  of the federal bankruptcy laws.  There can be no
assurances that Federated will not  seek  bankruptcy  protection  at an earlier
date.  However, assuming consummation of the Exchange, management believes that
as  the  two  firms  integrate  their  operations,  the  losses experienced  by
Federated  will  be  offset  by  the  much  stronger operations of  Wise.   The
combination of the two firms will also allow Federated to reduce certain of its
operating   expenses   by   eliminating   overlapping   operations.    Assuming
consummation of the Exchange, the Company's  auditors have indicated that their
report  for the year ending December 31, 1998 will  not  include  any  question
regarding Federated's ability to continue as a going concern.







							 -6-


<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.









                     FEDERATED PURCHASER, INC.


                   CONSOLIDATED FINANCIAL STATEMENTS

                    OCTOBER 31, 1997, 1996 AND 1995





























                                      -7-


<PAGE>

                     FEDERATED PURCHASER, INC.

                     OCTOBER 31, 1997, 1996 AND 1995










                                   CONTENTS



      PAGE


Independent Auditors' Report                                                 9


Consolidated Balance Sheets                                                 10


Consolidated Statements of Operations                                       11


Consolidated Statements of Stockholders' Equity                             12


Consolidated Statements of Cash Flows                                    13-14


Notes to Consolidated Financial Statements                               15-19













                                       -8-


<PAGE>










                         INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders of
Federated Purchaser, Inc.
Cliffwood, New Jersey

We have audited  the  consolidated  balance sheets of Federated Purchaser, Inc.
and  its  subsidiaries  as  of  October 31,  1997  and  1996  and  the  related
consolidated statements of operations,  stockholders' equity and cash flows for
the years ended October 31, 1997, 1996 and  1995.  These consolidated financial
statements   are  the  responsibility  of  the  Companies'   management.    Our
responsibility  is  to  express  an  opinion  on  these  consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material  respects,  the   financial  position  of  Federated
Purchaser, Inc. and its subsidiaries as of October  31,  1997 and 1996, and the
results of its operations and its cash flows for the years  ended  October  31,
1997,   1996   and  1995  in  conformity  with  generally  accepted  accounting
principles.

The accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue as a going concern.  As discussed  in  Note  2  to  the
financial statements, the Company has suffered recurring losses from operations
which raise substantial doubt about its ability to continue as a going concern.
Management's plans  regarding  those matters also are described in Note 2.  The
financial statements do not include  any adjustments that might result from the
outcome of this uncertainty.



                                                    BEDERSON & COMPANY LLP



January 8, 1998
West Orange, New Jersey

                                       -9-


<PAGE>
                     FEDERATED PURCHASER, INC.
                     CONSOLIDATED BALANCE SHEETS
                      OCTOBER 31, 1997 AND 1996

                                    ASSETS
<TABLE>
<CAPTION>



                                                       		  1997          1996

CURRENT ASSETS:
<S>															<C>				<C>
  Cash                                             			$   69,358		$   95,918
  Accounts receivable, less allowance for doubtful
    accounts of $16,803 and $26,339, respectively       	   384,059         493,285
  Inventories                                           	   228,583         314,447
  Prepaid expenses and sundry receivables                	    49,754          22,925
  Note receivable - Freedom Electronics Corporation      	    27,500          20,000
  Restrictive covenant receivable                       	    24,375          24,375

  TOTAL CURRENT ASSETS                                  	   783,629         970,950

PROPERTY AND EQUIPMENT, net of accumulated
  depreciation and amortization                         		20,600          32,028

OTHER ASSETS:
  Note receivable - Freedom Electronics Corporation,
    net of current portion                               		92,500         155,000
  Restrictive covenant receivable, net of current portion      	     -          24,375
  Security deposits                                     		10,845          10,845
  Association membership                               		    93,601          94,126

  TOTAL OTHER ASSETS                                   		   196,946         284,346

TOTAL ASSETS                                        		$1,001,175		$1,287,324

</TABLE>

                     LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

CURRENT LIABILITIES:
<S>															<C>				<C>
  Current portion of long-term debt               			$    8,331		$   10,624
  Accounts payable                                     		   468,479		   375,851
  Accrued expenses                                      		31,984          93,861

  TOTAL CURRENT LIABILITIES                            		   508,794		   480,336

LONG-TERM DEBT, less current portion                    			 -		     8,331

DEFERRED INCOME                                         		24,375          48,750

TOTAL LIABILITIES                                      		   533,169         537,417

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Common stock, $.10 par value, authorized, 
    5,000,000 shares, 1,719,758 shares issued                  171,976         171,976
  Additional paid-in capital                         		 1,692,342       1,692,342
  Accumulated deficit                               		(1,335,234)    	(1,053,333)
    Total                                             		   529,084         810,985
  Less:  Treasury stock, 108,441 shares, at cost     		    61,078          61,078

  TOTAL STOCKHOLDERS' EQUITY                           		   468,006         749,907

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          		$1,001,175      $1,287,324
</TABLE>

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

                                      -10-


<PAGE>
                     FEDERATED PURCHASER, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                  YEARS ENDED OCTOBER 31, 1997, 1996 AND 1995





<TABLE>
<CAPTION>

                                         				  1997         1996        1995

REVENUES:
<S>														<C>			<C>			<C>			
  Sales, net                            				$3,252,670	$3,980,560	$4,118,799

COSTS AND EXPENSES (INCOME):

  Cost of sales                          				 2,493,482	 3,128,019   3,172,060

  Selling, shipping, and general and administrative		 1,061,381	 1,286,444	 1,353,609

  Loss on sale of subsidiary					                 -           -     182,791

  Depreciation and amortization             			    11,427      11,575      11,260

  Interest expense                           				 2,850       2,828       3,811

  Interest income                          				   (11,054)    (14,830)    (32,530)

  Restrictive covenant                   				   (24,375)    (20,625)    (20,625)

  Other income		                                          (240)          -		(9,878)

  TOTAL COSTS AND EXPENSES (INCOME)      				 3,533,471   4,393,411	 4,660,498

LOSS BEFORE PROVISION FOR INCOME TAXES    				  (280,801)   (412,851)   (541,699)

PROVISION FOR INCOME TAXES                   				 1,100       1,975       4,363

NET LOSS                               					$ (281,901)	$ (414,826)	$ (546,062)

LOSS PER SHARE                      					$     (.17)	$     (.26)	$     (.34)

</TABLE>











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

                                      -11-


<PAGE>
                          FEDERATED PURCHASER, INC.
                  CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                      YEARS ENDED OCTOBER 31, 1997, 1996 AND 1995










<TABLE>
<CAPTION>
																						 Common Stock
                                                			Additional                      Held in
                                  COMMON STOCK          	Paid-in		Accumulated		 Treasury At Cost
                             	SHARES    	AMOUNT     		CAPITAL   	(DEFICIT)  		SHARES		AMOUNT

<S>								<C>			<C>				<C>			<C>				<C>			<C>
BALANCES - October 31, 1994		1,719,758	$   171,976		$1,692,342	$   (92,445)	19,552		$  16,633

  Purchase of treasury stock		    -    		  -   	         -      	  -     88,889    	   44,445

  Net loss                  			-             -              -     (546,062)         -              -

BALANCES - October 31, 1995		1,719,758 	    171,976      1,692,342     (638,507)   108,441    	   61,078

  Net loss				                -        	  -         	 -     (414,826)         -              -

BALANCES - October 31, 1996		1,719,758 		171,976  	 1,692,342   (1,053,333)   108,441         61,078

  Net loss                  			-          	  -          	 -     (281,901)         -              -

BALANCES - October 31, 1997		1,719,758	$   171,976		$1,692,342	$(1,335,234)   108,441		$  61,078

</TABLE>














                               The accompanying notes are an

                        integral part of these financial statements.

                                            -12-


<PAGE>
                     FEDERATED PURCHASER, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED OCTOBER 31, 1997, 1996 AND 1995




<TABLE>
<CAPTION>
                                          				1997          1996         1995

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>													   <C>			<C>			 <C>
  Net loss                               			   $(281,901)   $ (414,826)   $(546,062)
  Adjustments to reconcile net loss to net cash
    from operating activities:
      Depreciation and amortization        				  11,427        11,575       11,260
      Allowance for doubtful accounts      				  (9,525)        4,751        4,001
      Accrued interest income               				   -             -       (5,959)
      Loss on divestiture of Freedom Electronics, Corp.    	   -     	     -      182,791
      (Increase) decrease in current assets:
        Accounts receivable                				 118,762       (11,647)    (100,164)
        Inventories                         			  85,864        77,835       48,370
        Prepaid expenses and sundry receivables  		 (26,829)	    13,943	     (6,033)
        Tax refund receivable        					       -             -        5,119
        Decrease in security deposits       				   -		     -		  9,228
      Increase (decrease) in current liabilities:
        Accounts payable                   				  92,628        92,526      (47,095)
        Accrued expenses                 			     (61,887)	    35,387      (30,178)

  NET CASH USED BY OPERATING ACTIVITIES   				 (71,461)     (190,456)    (474,722)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds on divestiture of Freedom Electronics, Corp.	       -     		 - 	    100,000
  Investment in subsidiary                 					   -	         -      (50,471)
  Purchase of marketable securities					           -             -     (286,224)
  Sale of marketable securities					               -        99,744      192,439
  Advance to subsidiary                    					   -             -      (15,500)
  Purchase of property and equipment				       	   -		  (471)	     (2,688)
  Collection of note receivable             			  55,000        35,000      655,845
  (Increase) decrease in association membership costs	     525	   (23,672)		(20,400)

  NET CASH PROVIDED BY INVESTING ACTIVITIES     		  55,525	   110,601	    573,001

CASH FLOWS USED BY FINANCING ACTIVITIES:
    Payments on notes payable and long-term debt		 (10,624)	   (10,742)	    (74,624)

NET INCREASE (DECREASE) IN CASH            				 (26,560)	   (90,597)	     23,655

CASH - beginning of year                    			  95,918       186,515      162,860

CASH - end of year                      				$ 69,358	$   95,918	  $ 186,515
</TABLE>

                                  (Continued)

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

                                      -13-


<PAGE>
                     FEDERATED PURCHASER, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED OCTOBER 31, 1997, 1996 AND 1995




<TABLE>
<CAPTION>

                		                         1997          1996         	1995

SUPPLEMENTAL DISCLOSURES OF CASH FLOW
  INFORMATION:
    Cash paid during the year for:
<S>												<C>				<C>				<C>
      Interest                        			$      2,850	$      2,828	$    3,811

      Income taxes                   			$        404	$          -    $      421




NON-CASH INVESTING AND FINANCING ACTIVITY:
  Divestiture of Freedom Electronics Corp.,
    summarized as follows:
      Selling price                				$          -	$          -	$1,100,290


      Less:         
	  Note receivable						               -             -        (210,000)
        Restrictive covenant                			   -               -       (90,000)
        Treasury stock                      			   -               -       (44,445)

      Cash received								$          -	$          -	$  755,845


  Cash received                    				$          -	$          -    $  755,845

  Applied to:
    Sale of stock                           			   - 	           -      (100,000)
    Intercompany indebtedness               			   -               -      (655,845)

                                            		       -               -      (755,845)

                                  				$          -	$          -	$        -

</TABLE>








                                  (Concluded)

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

                                      -14-


<PAGE>
                     FEDERATED PURCHASER, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      OCTOBER 31, 1997, 1996 AND 1995

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        NATURE OF BUSINESS
        The  Companies  are engaged in the sale of electronic parts, components
        and related equipment.

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

        REVENUE RECOGNITION
        Federated  Purchaser,  Inc.  and  its subsidiaries, ("the  Company"  or
        "Federated") maintain their records on the accrual basis of accounting.
        Income is earned and recorded at the  time  of  shipment, which is when
        title  passes.  Expenses are recorded when incurred.   Any  merchandise
        returned  by  customers  in  the normal course of business must be pre-
        approved by management.

        DEFERRED REVENUE
        In conjunction with the sale of  all  the  common  stock of its wholly-
        owned  subsidiary,  Freedom  Electronics Corporation, on  November  14,
        1994, Federated entered into a noncompete agreement with the purchaser.
        The $90,000 noncompete agreement  is  being recognized into income over
        the  four-year term of the agreement based  upon  monthly  installments
        received.

        PRINCIPLES OF CONSOLIDATION
        The consolidated  financial  statements  include  the  accounts  of the
        Company  and  its  subsidiaries,  all  of  which are wholly-owned.  All
        significant  intercompany items have been eliminated.   (See  Note  13,
        Sale of Subsidiary.)

        INVENTORIES
        Inventories are stated at lower of cost (first-in, first-out method) or
        market.

        PROPERTY AND EQUIPMENT
        Property and equipment, including significant betterments, are recorded
        at cost.  Upon  retirement  or  disposal  of  properties,  the cost and
        accumulated depreciation are removed from the accounts, and any gain or
        loss  is included in income.  Maintenance and repair costs are  charged
        to expense as incurred.  Provisions for depreciation are made using the
        straight-line method over the estimated economic lives of the assets.

        ADVERTISING
        Advertising  costs  are  expensed  as incurred and included in Selling,
        Shipping and General and Administrative Expenses.  Advertising expenses
        for  the  years ended October 31, 1997,  1996  and  1995  were  $6,898,
        $19,792 and $20,149, respectively.

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

                                      -15-


<PAGE>
                     FEDERATED PURCHASER, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        OCTOBER 31, 1997, 1996 AND 1995

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

    RECLASSIFICATION
    Certain prior year amounts have  been  reclassified to conform with current
    year presentation.  Such reclassifications  had  no  effect on reported net
    losses.

    NET LOSS PER COMMON SHARE
    The computations of losses per share are based upon the  Company's net loss
    of  $281,901, $414,826 and $546,062 for the years ended October  31,  1997,
    1996  and  1995,  respectively,  divided  by the weighted average number of
    shares outstanding of 1,611,317 in 1997 and 1996 and 1,614,726 in 1995.

    There were no common stock equivalents or other reconciling items affecting
    either  the  numerator or denominator in calculating  earnings  (loss)  per
    share.

    LONG-LIVED ASSETS
    Effective November  1,  1996,  the  Company  adopted Statement of Financial
    Accounting Standards ("SFAS") No. 121, ACCOUNTING  FOR  THE  IMPAIRMENT  OF
    LONG-LIVED  ASSETS  AND  FOR  LONG-LIVED  ASSETS  TO  BE  DISPOSED  OF.  In
    accordance  with  SFAS No. 121, the Company reviewed long-lived assets  for
    impairment whenever  events or changes in business circumstances occur that
    indicate that the carrying  amount  of  the  assets may not be recoverable.
    The Company assesses the recoverability of long-lived assets held and to be
    used based on undiscounted cash flows, and measures the impairment, if any,
    using discounted cash flows.  Adoption of SFAS  No.  121  did  not  have  a
    material  impact  on the Company's financial position, operating results or
    cash flows.

    FAIR VALUE OF FINANCIAL INSTRUMENTS
    The Company measures  its  financial  assets  and liabilities in accordance
    with  generally  accepted  accounting  principles.    For  certain  of  the
    Company's financial instruments, including cash, trade accounts receivable,
    notes receivable, accounts payable, accrued expenses, the  carrying amounts
    approximate  fair  value  due to their short term maturities.   The  amount
    shown for long-term receivables  also  approximate  fair  value.   The fair
    value  of  the  Company's  long-term  debt  is  based  upon rates currently
    available  to  the  Company  for  loans  with  similar  terms  and  average
    maturities.  The fair value of the long-term debt approximates its carrying
    value.

NOTE 2 - GOING CONCERN

    The  Company's  financial statements have been prepared on a going  concern
    basis which contemplates  the realization of assets and the satisfaction of
    liabilities in the normal course of business.

    As shown in the financial statements,  the  Company has incurred net losses
    of $281,901, $414,826 and $546,062 for the fiscal  years  ended October 31,
    1997,  1996  and  1995,  respectively  and  sales and working capital  have
    continued  to  decline.  These factors raise substantial  doubt  about  the
    Company's ability to continue as a going concern.

    The Company's continued  operations  will  depend  on  its ability to raise
    additional  funds  through  a  combination  of  equity  or debt  financing,
    strategic alliances, increased revenues and reduction of  operating  costs.
    See Note 14 - Proposed Acquisition.

    The  Company's  long-term  liquidity  will  depend  on its ability to raise
    substantial additional funds.  There can be no assurances  that  such funds
    will be available to the Company on acceptable terms, if at all.

NOTE  3  - CONCENTRATION OF CREDIT RISK AND RISK ARISING FROM CASH DEPOSITS  IN
EXCESS OF INSURED LIMITS

    The Company  sells  its  products  to  various  customers  primarily in the
    Northeast  United States.  The Company performs ongoing credit  evaluations
    on its customers  and  generally  does not require collateral.  The Company
    maintains reserves for potential credit  losses  and  such losses have been
    within management's expectations.  At times throughout the year the Company
    may maintain certain bank accounts in excess of the FDIC insured limits.

                                      -16-


<PAGE>
                     FEDERATED PURCHASER, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        OCTOBER 31, 1997, 1996 AND 1995

NOTE 4 - INVENTORIES
<TABLE>
<CAPTION>

    Inventories consist of the following:              				  1997        	  1996
<S>																	<C>				<C>
      Merchandise for resale                          				$228,583    	$314,447

</TABLE>

<TABLE>
<CAPTION>


NOTE 5 - PROPERTY AND EQUIPMENT

    Property and equipment consist of the following:

                                          				1997          1996        	USEFUL LIFE
 <S>													<C>			<C>				<C>
           Leasehold improvements       				$  12,522   $  12,522      	5 - 31 years
           Furniture, fixtures and equipment 			  110,626      110,626     	5 - 15 years
           Automotive equipment            				   24,139       24,139     	4 years
             Total                        				  147,287      147,287
</TABLE>

<TABLE>
<CAPTION>
<S>														<C>			<C>
           Less:  Accumulated depreciation
                      and amortization    				  126,687      115,259

           Net property and equipment   				$  20,600   $  32,028
</TABLE>


NOTE 6 - ASSOCIATION MEMBERSHIP

        The  Company  is a member of a cooperative buying group  and  has  been
        purchasing stock in such group pursuant to group guidelines.  The total
        investment as of  October  31,  1997  and 1996 was $93,601 and $94,126,
        respectively.  In the event that the Company  were  to leave the group,
        the group would be obligated to refund all invested amounts over a five
        year  period.   The  association  membership is valued at  cost,  which
        approximates the current market value.

<TABLE>
<CAPTION>

NOTE 7 - LONG-TERM DEBT

        Long-term debt payable consist of the following:
                                                       				  1997         	  1996
<S>																	<C>				<C>
           IBM Credit Corporation, payable in monthly
           installments of $1,122, including interest
           at 11% through July 1998, secured by data
           processing equipment.                      				$  8,331    	$ 18,955

           Less:  Current portion                         			   8,331          10,624

           Total long-term debt                     				$      - 		$  8,331

NOTE 8 - ACCRUED EXPENSES

        Accrued expenses as of October 31, consist of the following:

                                                       	  			  1997       	  1996

           Payroll                                     				$12,944			$ 17,693
           Professional fees                             			 11,680      	  63,470
           Sundry                                        			  7,360      	  12,698

           Total accrued expenses                      				$31,984     	$ 93,861

</TABLE>


                                      -17-


<PAGE>
                     FEDERATED PURCHASER, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        OCTOBER 31, 1997, 1996 AND 1995

NOTE 9 - RETIREMENT PLAN

        The Company sponsored a profit sharing  plan covering substantially all
        employees.  There was no charge to income for 1996 and 1995.  The Board
        of Directors adopted a resolution on December  1, 1995 to terminate the
        Company's  sponsored  profit  sharing plan covering  substantially  all
        employees.

NOTE 10 - INCOME TAXES DEFERRED AND PAYABLE

        Components of provision for income taxes are as follows:
<TABLE>
<CAPTION>
<S>									<C>			<C>				<C>
                                      1997        1996       1995
           Current:
             Federal               	$      -	$     -     $     -
             State                     1,100      1,975       4,363

               Total                   1,100      1,975       4,363

           Deferred:
             Federal                       -          -           -

           Total taxes         		$  1,100    $ 1,975		$ 4,363

</TABLE>


        Accounting  for  income  taxes provides  for  an  asset  and  liability
        approach to accounting for income taxes that require the recognition of
        deferred  tax  assets  and liabilities  for  the  expected  future  tax
        consequences of events that  have  been  recognized  in  the  Company's
        financial statements or tax returns.

        In  estimating  future  consequences,  all expected future events other
        than proposed changes in the tax law or  rates  prior  to enactment.  A
        valuation  allowance is provided when it is more likely than  not  that
        some portion or all of the deferred tax assets will not be realized.

        Temporary differences  between the financial statement carrying amounts
        and tax bases of assets  and  liabilities that give rise to significant
        portions of the net deferred tax asset relate to the following:

<TABLE>
<CAPTION>
        	                                               				   1997       1996
<S>																		<C>			<C>
           Accounts receivable, principally due to
             allowance for doubtful accounts         					$   7,225   $  11,326
           Carryforward losses                         	  				  801,423 	  672,025
           Valuation allowance                        	 				 (808,648)   (683,351)
           Net deferred tax assets and liabilities						$       -	$       -
</TABLE>

        At October 31, 1997, the Company  had  net operating loss carryforwards
        of approximately $1,796,000 that expire in the years 2008 to 2012.

        The consolidated income tax (benefit) was  different  than  the  amount
        computed  using  the  United  States  statutory income tax rate for the
        reasons set forth in the following table:

<TABLE>
<CAPTION>
 				                                            1997           1996       1995
<S>														<C>				<C>			<C>
           Expected tax (credit) at U.S.
             statutory income tax rate 					$  (95,472)		$(141,041)	$(184,178)
           State income taxes               				 1,100          1,975       4,363
           Valuation allowance             					95,472        141,041     184,178

                                      					$    1,100   	$   1,975  	$   4,363
</TABLE>

                                      -18-


<PAGE>
                     FEDERATED PURCHASER, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                        OCTOBER 31, 1997, 1996 AND 1995

NOTE 11 - LEASE COMMITMENT

        As of September 30, 1992, the Company moved  to a new facility under an
        operating lease agreement which will expire on  December  31, 1998 at a
        minimum  annual  lease  rental of $106,970.  The lease was modified  on
        June  1,  1995  to remove the  premises  used  by  Freedom  Electronics
        Corporation at a  minimum  annual lease rental of $58,000.  In addition
        to minimum rentals, the Company  will  be  responsible  for real estate
        taxes  and  a  pro-rata  share of all common charges.  Rent charged  to
        operations was $76,528, $80,979  and  $82,885,  respectively,  for  the
        years ended October 31, 1997, 1996 and 1995.

        The future aggregate minimum rental payments under this operating lease
        agreement are as follows:

               Years Ended
               OCTOBER 31,

                   1998                               $ 58,000
                   1999                                  9,667
                                                      $ 67,667

NOTE 12 - MAJOR SUPPLIER INFORMATION

        The  Company  had  one  supplier  from  whom it purchased approximately
        $418,000 or 17% of purchases for the year  ended  October  31, 1997 and
        one  supplier from whom it purchased approximately $523,000 or  16%  of
        purchases for the year ended October 31, 1996.

NOTE 13 - SALE OF SUBSIDIARY

        On  November   15,  1994,  by  unanimous  vote  of  all  non-interested
        directors,  Federated   Purchaser,   Inc.   (Federated)   divested  its
        subsidiary, Freedom Electronics Corporation (Freedom).

        In  consideration of the divestiture of 100% of the outstanding  shares
        of Freedom,  Federated Purchaser, Inc. received approximately $354,000,
        including $100,000  in  cash,  a  $210,000  7%  promissory  note due on
        November  15,  1998  and  88,889  shares  of  common stock of Federated
        (representing  4.9%  of  the  class  outstanding)  held  personally  by
        Freedom's President.  In addition, the parties entered  into  customary
        covenants  not  to  compete,  pursuant  to which Federated would become
        entitled to receive $90,000 over a period  of  four  years.  As part of
        this  transaction  certain intercompany indebtedness to  Federated  was
        satisfied by payment of an additional $656,000.

        The loss on the divestiture of Freedom amounted to $182,791 or $.11 per
        share.

NOTE 14 - PROPOSED ACQUISITION

        On October 1, 1997,  Federated  Purchaser,  Inc.  signed  an  agreement
        whereby  Federated  will exchange 4,491,988 newly issued shares of  its
        common  stock  having a  per  share  value  of  $.22  for  all  of  the
        outstanding capital  stock  of  Wise  Components,  Inc. ("Wise").  As a
        result of this transaction the controlling interest  of  Wise will also
        become the controlling interest of Federated.  For financial  statement
        purposes,  Wise  is  deemed  to  be  the  acquiror of Federated and the
        transaction  will  be recorded by Wise under  the  purchase  method  of
        accounting.  Once the  transaction  has  been  concluded, the financial
        position  and  results of operations of Federated  will  thereafter  be
        consolidated with Wise.

        In order to conclude  the  transaction  referred  to  in  the preceding
        paragraph, Federated will increase the number of common shares  it  has
        authorized,  from  5,000,000  to 10,000,000  shares.  This increase has
        not yet been approved by the shareholders  of  Federated;  accordingly,
        the issuance has not been recorded as of October 31, 1997.

                                      -19-


<PAGE>
















                         INDEPENDENT AUDITORS' REPORT





To the Board of Directors and Stockholders of
Federated Purchaser, Inc.
Cliffwood, New Jersey


We have audited the financial statements of Federated Purchaser, Inc.  and  its
subsidiaries  as  of  October 31, 1997 and have issued our report thereon dated
January 8, 1998; such financial statements and report are included elsewhere in
this Form 10K.  Our audit  also  included the financial statements schedules of
Federated  Purchaser, Inc. and its  subsidiaries  listed  in  Item  14.   These
financial  statement   schedules   are  the  responsibility  of  the  Company's
management.  Our responsibility is to  express  an  opinion based on our audit.
In our opinion, such financial statement schedules, when considered in relation
to  the  basic  financial statements taken as a whole, present  fairly  in  all
material respects the information set forth therein.


                                                    BEDERSON & COMPANY LLP






January 8, 1998
West Orange, New Jersey







                                      -20-


<PAGE>
                                                                 SCHEDULE VIII



                     FEDERATED PURCHASER, INC.
                VALUATION AND QUALIFYING ACCOUNTS AND RESERVES










   COLUMN A                     COLUMN B     COLUMN C    COLUMN D     COLUMN E

                                            	Additions
                                            	Charged to
                                    Balance at  Profit and  Deductions  Balance
                                    Beginning   Loss or       From      at Close
CLASSIFICATION                   	OF PERIOD	INCOME		RESERVES	OF PERIOD


Year ended October 31, 1997:
  Allowance for doubtful accounts	$ 26,339	$   6,000	$ 15,536	$ 16,803



Year ended October 31, 1996:
  Allowance for doubtful accounts	$ 22,835	$   4,751	$  1,247	$ 26,339



Year ended October 31, 1995:
  Allowance for doubtful accounts	$ 28,682	$  13,235	$ 19,082	$ 22,835















                                      -21-


<PAGE>

                                  SIGNATURES


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

                                          FEDERATED PURCHASER, INC.



                                          By:/S/ HARRY J. FALLON
                                          HARRY J. FALLON, President
April 16, 1998


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

SIGNATURES:                        TITLE                        DATE


/S/ HARRY J. FALLON          Acting Chairman, President,   April 16, 1998
HARRY J. FALLON              Principal Executive Officer,
                             Principal Financial
                             Officer, Principal
                             Accounting Officer and
                             Director


/S/ EDMUND L. HOENER         Director                      April 16, 1998
EDMUND L. HOENER


/S/ EDWIN S. SHORTESS        Director                      April 16, 1998
EDWIN S. SHORTESS


/S/ JANE A. CHRISTY          Director, Vice                April 16, 1998
JANE A. CHRISTY              President Operations















                                      -22-