FORM 10-K

                      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

[   ]  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 or any
amendment to this Form 10-K.  [ 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

PART III:               Certain  portions of the Proxy Statement for the 1998
			Annual Meeting of Shareholders.


<PAGE>
                           FEDERATED PURCHASER, INC.

                             Cross Reference Sheet


     Form 10-K                Heading(s) in Proxy Statement for
     ITEM NO.                 THE ANNUAL MEETING OF SHAREHOLDERS

10.  Directors and            Election of Directors
     Executive                Executive Officers
     Officers of the
     Registrant

11.  Executive                Compensation of Directors
     Compensation              and Executive Officers

12.  Security                 Voting Securities and Principal
     Ownership of               Holders
     Certain Bene-
     ficial Owners
     and Management

13.  Certain Relation-        Compensation Committee Interlocks
     ships and Related         and Insider Participation
     Transactions

               The balance of this page is intentionally blank.


				       -1-


<PAGE>
                               TABLE OF CONTENTS

                  ITEM                                               PAGE


PART I.     1.  Business                                              3

            2.  Properties                                            6

            3.  Legal Proceedings                                     6

            4.  Submission of Matters to a Vote of
                  Security Holders                                    6


PART II.    5.  Market for Company's Common
                  Equity and Related Stockholder
                  Matters                                             7

            6.  Selected Financial Data                               8

            7.  Management's Discussion and Analysis
                  of Financial Condition and Results
                  of Operation                                        9

            8.  Financial Statements and Supplementary
                  Data                                               15

            9.  Disagreements on Accounting and
                  Financial Disclosure                               28


PART III.   10. Directors and Executive Officers of
                  the Company                                        28

            11. Executive Compensation                               28

            12. Security Ownership of Certain
                  Beneficial Owners and Management                   28

            13. Certain Relationships and Related
                  Transactions                                       28


PART IV.    14. Exhibits, Financial Statement Schedules
                  and Reports on Form 8-K

SIGNATURES


				       -2-
<PAGE>
                                    PART I

ITEM 1. BUSINESS.

      A. GENERAL DEVELOPMENT OF BUSINESS

      Federated Purchaser, Inc. ("Federated")  was incorporated in the state of
New  York  in  1928.   On  November  15,  1994, the Company  divested  Freedom,
Electronics, Inc. a subsidiary acquired in July 1989 (the "Divestiture").  This
Divestiture was based upon a strategic decision  by  management to re-focus its
efforts on the Company's traditional core business:  the  marketing  of a broad
range of electronics components and related equipment to industrial customers.

      Unless   otherwise  noted,  references  herein  to  the  "Company"  means
Federated and its subsidiary.

      B. SIGNIFICANT FACTORS

	1. PROPOSED ACQUISITION

	On October 1, 1997, Federated Purchaser, Inc. ("Federated")
announced that it signed an agreement with Wise Components, Inc.
("Wise"), and its chairman and sole shareholder, Martin L.
Blaustein ("Blaustein"), under which Federated will issue
approximately 4.5 million shares of its common stock to Blaustein
in a tax-free exchange for all of the outstanding shares of
Wise's common stock (the "Proposed Transaction").  Upon closing,
Wise will become a wholly owned subsidiary of Federated and
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 transaction is expected to close in the second quarter of
fiscal 1998.

        2. CONTINUING SIGNIFICANT LOSSES; ACCUMULATED DEFICIT

        The Company has experienced significant and continuous operating losses
amounting to $1,932,259  during the past five operating periods.  For the years
ended October 31, 1997 ("fiscal  1997"),  October  31,  1996  ("fiscal  1996"),
October  31, 1995 ("fiscal 1995"), October 31, 1994 ("fiscal 1994") and October
31, 1993 ("fiscal  1993"),  the  Company incurred losses of $281,901, $414,826,
$546,062, $373,849, and $315,621,  respectively.   As  of October 31, 1997, the
Company's  accumulated  deficit  was  $1,335,234.   See  Item  7  "Management's
Discussion  and  Analysis of Financial Condition and Results  of  Operations  -
Results of Operations".

        3. IMPAIRED LIQUIDITY

        The Company's liquidity position has been and continues to be adversely
affected by a variety  of  factors, including continued losses from operations.
During  fiscal 1997, the Company  used  net  cash  of  $71,461  for  operating
activities,  primarily  as  a  result of the net loss of $281,901 for the year.
Since 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.   While  the  Company  enhanced  its  short-term
liquidity  position  through the one-time receipt of $762,345 in cash from  the
Divestiture, those proceeds  have been used to finance the Company's operations
during the past two operating  periods.   At  October  31, 1997, the Company's


				       -3-


cash reserves amounted to $69,358, which could be insufficient  to  finance the
Company's  operations throughout the upcoming operating period unless  (i)  the
Company's results  of  operations  improve significantly, or (ii) management is
able to secure financing from an outside  source.  To date, management has been
unable to negotiate such financing from any outside source on acceptable terms.
There can be no assurances that the Company's  cash reserves will be sufficient
to  satisfy  the  Company's operating or financing  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.  See Item 7
"Management's Discussion and  Analysis  of  Financial  Condition and Results of
Operations - Liquidity and Capital Resources."  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.

        4. AUDIT REPORT - UNCERTAINTY

           As  a  result of the Company's repeated operating  losses,  impaired
liquidity and current  lack  of  access to any outside source of financing, the
Company's  independent  accountants  have  included  an  explanatory  paragraph
raising substantial uncertainty  as  to  the Company's ability to continue as a
going concern in their audit report.  See  Note 2 of the Company's Consolidated
Financial Statements.


        5.  NEGATIVE TRENDS IMPACTING SMALL ELECTRONICS  DISTRIBUTORS;  INTENSE
COMPETITION

        The Company's  sales levels have been and may continue to be negatively
impacted by a variety of  factors,  including  the  slowdown in the electronics
segment of the national economy and the loss of certain  customers  due  to the
departure  of  key  sales  personnel  to competitors.  Management believes that
certain industry trends, such as customers  migrating  from  smaller  to larger
distributors  and  the  increase  in  the relative volume of business conducted
directly between suppliers and manufacturers,  have negatively impacted smaller
electronics distributors such as the Company.  In  addition,  the Company faces
intense competition from numerous substantially larger companies having greater
resources,  larger staffs, more extensive facilities and equipment,  and  which
offer a broader range of products, than the Company.  In view of these factors,
there can be  no  assurances  that  the  Company  will  be  able  to  return to
profitability.


      C. NARRATIVE DESCRIPTION OF BUSINESS

      PRINCIPAL PRODUCTS AND SERVICES

      Federated  and its wholly-owned subsidiary are engaged in one segment  of
the electronics industry:  marketing  of  a  broad range of electronic  parts,
components  and related equipment (including, for  example, such items as
semi-conductors, wire,  transformers,  relay  systems, capacitors and electronic
tubes) to industrial customers.

      The Company conducts its business through its two locations in Cliffwood,
New Jersey, and Allentown, Pennsylvania, and through the direct solicitation of
certain industrial customers by the Company's own sales personnel.

      The  Company  assembles  and markets a broad range of products,  none  of
which accounted for 15% or more  of  the Company's consolidated revenues during
fiscal 1997, fiscal 1996 or fiscal 1995.

				       -4-


      SOURCES AND AVAILABILITY OF RAW MATERIALS

      The products marketed and distributed  by the Company are obtained either
through distributorship agreements or are otherwise  normally  available to the
Company from a number of commercial sources on a competitive basis.   While the
Company  has not generally experienced difficulties in obtaining such products,
a  supplier   of   electronic  parts  to  Federated  terminated  the  Company's
appointment as a distributor  in  1993 and 1997.   There  can  be no assurances
that the Company will not be terminated by any of its other suppliers  or  that
any such termination will not have a material adverse impact on the Company's
results of operations.   See  Item  7  "Management's  Discussion and Analysis of
Financial Condition and Results of Operations."

      PATENTS, TRADEMARKS AND LICENSES

      The Company does not hold any patents,  trademarks,  licenses, franchises
or concessions with respect to its continuing operations.

      SEASONAL BUSINESS

      The Company's business is generally not affected by seasonal factors.

      WORKING CAPITAL ITEMS

      Management  believes  that  the Company's inventory practices  and  other
practices which impact working capital  are  similar to those employed by other
similarly sized distributors doing business in  this segment of the electronics
industry.  See Item 1 "Business - Significant Factors" and Item 7 "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

      MATERIAL CUSTOMERS

      During  fiscal 1997, net sales by the Company  to  its  largest  customer
comprised approximately  4%  of the Company's consolidated net sales. Given the
Company's current liquidity situation  and  the Company's need to significantly
improve its sales revenues, there can be no assurances that the loss of this or
any other customer would not have a material adverse effect on the Company.

      All but a nominal amount of the Company's  sales  are  made to industrial
customers within the continental United States.

      BACKLOG

      As  of October 31, 1997, the Company had a firm backlog of  approximately
$550,000 compared  to  a  firm  backlog  at  October  31, 1996 of approximately
$666,687.

      GOVERNMENT CONTRACTS

      No  portion  of  the  Company's business is subject to  renegotiation  of
profits or to termination of  contracts  or subcontracts at the election of the
Government.

				       -5-

      COMPETITIVE CONDITIONS

      The Company faces intense competition  from numerous companies assembling
and  marketing products similar to those sold by  the  Company.   Many  of  the
Company's  competitors  are substantially larger than the Company, have greater
resources, larger staffs,  more extensive facilities and equipment, and offer a
broader range of products than  the  Company.   Competition  is generally based
upon  price,  service and breadth of product lines offered.  In  addition,  the
Company believes  that the industry is moving towards a reduction in the number
of distributors which  service each customer, a trend which management believes
favors the larger distributors and negatively impacts the Company.  As a result
of these factors, there  can  be no assurances that the Company will be able to
reverse its negative operating results and return to profitability.

      RESEARCH AND DEVELOPMENT

      During fiscal 1996 and the  interim  periods  of fiscal 1997, the Company
did not spend any amount on research and development activities.

      ENVIRONMENTAL MATTERS

      Management believes that the Company's capital expenditures, earnings and
competitive position have not been affected by compliance  with  Federal, State
and local laws relating to the protection of the environment.

      NUMBER OF EMPLOYEES

      As  of  October  31,  1997, the Company had 17 employees, 2 of whom  were
engaged in administration, 9  in  clerical  and  shipping  positions,  and 6 in
sales.   This  represents  a reduction of 4 employees from fiscal 1995, all  of
whom were laid off in February,  1996  as  part  of management's plan to reduce
overhead  expenses.  The Company is not a party to  any  collective  bargaining
agreement and considers its employee relations to be satisfactory.

ITEM 2. PROPERTIES.

      The Company  currently  operates  its principal administrative, sales and
warehousing facilities from an 11,600 square foot facility located in Cliffwood,
New Jersey.  The annual rental during the  current term under the terms of a 6-
year net lease (i.e., the annual rental is exclusive  of property taxes and all
other  property-connected  charges  payable by the Company)  is  $58,000.   The
Company also leases approximately 2,800 square feet in a building in Allentown,
Pennsylvania, on a month-by-month basis for a minimum annual rental of $10,800.

      Management believes that the present  facilities are adequate to meet the
Company's current and reasonably foreseeable needs.

ITEM 3. LEGAL PROCEEDINGS.

      The Company is not a party to, nor is any of its property the subject of,
any material pending legal proceedings, other  than ordinary routine litigation
incidental to its business.

				       -6-



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

      The Company did not submit any matters to  a  vote  of  its shareholders,
through the solicitation of proxies or otherwise, during the fourth  quarter of
fiscal 1996.


				       -7-

<PAGE>
                                    PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

      Since  July  14,  1992,  Federated's  stock  has been quoted on the "pink
sheets"  by  the  National Quotation Bureau, Inc.  These  quotations  represent
prices  between dealers  and  do  not  include  retail  mark-up,  mark-down  or
commissions and may not represent actual transactions.

<TABLE>
<CAPTION>
                                                     BID PRICES                        ASKED PRICES
<S>                                               <C>            <C>              <C>            <C>
Quarter ended:                                     HIGH           LOW              HIGH           LOW
January 31, 1995                                   5/16           1/4     	    3/4           9/16
April 30, 1995                                     5/16           1/16     	    3/4           5/16
July 31, 1995                                      1/4            1/8          	    3/4           7/16
October 31, 1995                                   1/4            1/8          	    3/4           1/2
January 31, 1996                                   1/4            1/4      	    1/2           7/16
April 30, 1996                                     1/4            1/8        	    7/16          3/8
July 31, 1996                                      7/32           7/32      	    3/8           3/8
October 31, 1996.                                  7/32           7/32      	    3/8           3/8
January 31, 1997                                   3/8            1/8        	    7/16          1/4
April 30, 1997                                     5/16           1/8        	    5/16          1/4
July 31, 1997                                      5/32           1/8        	    5/16          5/16
October 31, 1997                                   1/8            1/8        	    5/16          5/16
January 20, 1998                                   3/8            3/8         	    9/32          9/32
</TABLE>

      At  January 20, 1998, there were approximately 785 shareholders of record
of Federated's Common Stock.

      Given  Federated's  repeated  operating  losses, accumulated deficit, and
impaired  liquidity  position,  management  intends  to  retain  all  remaining
available  cash  for  the  operation  of  Federated's  business  and  does  not
anticipate paying cash dividends on its common stock in the foreseeable future.
Any future determination as to the payment  of  dividends  on  the common stock
will depend upon future earnings, capital requirements, the financial condition
of Federated and any other factors the Board of Directors may consider.

      For  information  regarding  the effect of the Exchange on the  principal
holders  of Common Stock, see "Description  of  Capital  Stock  --  Voting  and
Principal Holders" above.  For information regarding the effect of the Exchange
on the Common  Stock  ownership  of  Federated's  directors  and  officers, see
"Directors  and  Officers"  above.  There are no commitments with any  of  such
persons with respect to the issuance of any class of Federated's common equity.


				       -8-

<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.

      The consolidated selected  financial  data  of  and  for each of the five
years in the period ended October 31, 1997 have been derived  from  the audited
financial  statements  of  Federated.  These data should be read in conjunction
with, and is qualified in its entirety to, the related financial statements and
notes included elsewhere in this Proxy Statement.


<TABLE>
<CAPTION>

                                                                  Year Ended
                                                                  October 31,
                   _____________________________________________________________________________________
<S>               <C>               <C>               <C>               <C>               <C>
                        1997              1996              1995               1994             1993
Net sales             $3,252,670        $3,980,560        $4,118,799        $6,281,006        $6,245,276
Net loss from
 continuing
 operations             (281,901)         (414,826)         (546,062)         (373,849)         (315,621)
Net loss per
 share from
 continuing
 operations                 (.17)             (.26)             (.34)             (.22)             (.19)
Cash
 dividends
 paid                         --                --                --                --                --
Cash
 dividends
 paid per
 share                       .00               .00               .00               .00               .00
Total assets           1,001,175         1,287,324         1,605,604         2,768,863         2,788,001
Working
 capital                 274,835           490,614           871,875         1,452,970         1,852,245
Current ratio              1.5:1             2.0:1             3.5:1             2.5:1             4.0:1
Long-term debt
                           8,331            18,955            29,697            44,989            69,613
Stockholders'
 equity                  468,006           749,907         1,164,733         1,755,240         2,129,089
Stockholders'
 equity per
 share                $      .29        $      .47        $      .72         $    1.03         $    1.25
</TABLE>

(1)    The data for fiscal years  1995  and  1996  reflect  the  divesture of a
       former  Federated  subsidiary,  Freedom.   See  further  discussion   at
       Management's  Discussion and Analysis of Financial Condition and Results
       of Operation for the fiscal years ended October 31, 1997, 1996 and 1995.


				       -9-

<PAGE>

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.

				       -10-

      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
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


				       -11-



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  $762,345  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 Note
14 - 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 a decrease of $38,500 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
$609,348 from operating  activities,  primarily  because  the  net loss for the
year.  The Company generated cash from investing activities of $645,472 for the
year  ended  October  31,  1995,  primarily from the $762,345 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
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

				       -12-


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; although its ability  to do so quickly is limited by
the fact that Federated is not receiving cash under the Exchange.

      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.


				       -13-

      On November 15, 1994, by unanimous vote  of all non-interested directors,
Federated divested its subsidiary, Freedom.  In  consideration of the divesture
of 100% of the outstanding shares of Freedom, Federated  received approximately
$360,500, including  $106,500 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.

				       -14-



<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                                          	PAGE


Independent Auditors' Report         		  16


Consolidated Balance Sheets       	          17


Consolidated Statements of Operations  		  18


Consolidated Statements of Stockholders' Equity	  19


Consolidated Statements of Cash Flows     	  20 - 21


Notes to Consolidated Financial Statements	  22 - 28
























				       -15-





<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



				       -16-



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

                                    ASSETS

<TABLE>
<CAPTION>
                                        	               1997             1996
<S>							  <C>		   <C>
CURRENT ASSETS:
  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

                     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  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

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

</TABLE>




				       -17-

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




<TABLE>
<CAPTION>


                                           1997          1996         1995
<S>					<C>	      <C>          <C>
REVENUES:

  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.


				       -18-

<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.


				       -19-

<PAGE>

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

<TABLE>
<CAPTION>
                              			            1997          1996         1995
<S>							  <C>		<C>	     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  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
      Freedom Electronics, Corp., net assets and
        liabilities disposed of                                 -             -       (160,457)
      Noncash operating expenses            			-             -          2,154
      Deferred income taxes                 			-             -         (1,947)
      (Increase) decrease in current assets:
        Accounts receivable                                 118,762       (11,647)    (114,540)
        Inventories                                          85,864        77,835       48,370
        Prepaid expenses and sundry receivables             (26,829)       13,943       33,967
        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)    (609,348)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds on divestiture of Freedom Electronics, Corp.     	-     	      -        762,345
  Purchase of marketable securities         			-             -       (286,224)
  Sale of marketable securities             			-          99,744      192,439
  Purchase of property and equipment        			-            (471)      (2,688)
  Collection of note receivable             		     55,000        35,000         -
   (Increase)  decrease in association membership costs         525       (23,672)     (20,400)

  NET CASH PROVIDED BY INVESTING ACTIVITIES     	     55,525       110,601      645,472

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

NET DECREASE IN CASH                                        (26,560)      (90,597)     (38,500)

CASH - beginning of year                                     95,918       186,515      225,015

CASH - end of year                                       $   69,358    $   95,918    $ 186,515

</TABLE>
                                  (Continued)

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


				       -20-
<PAGE>
                     FEDERATED PURCHASER, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED OCTOBER 31, 1997, 1996 AND 1995




<TABLE>
<CAPTION>

                                          1997          1996         1995
<S>				       <C>	     <C>          <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
  INFORMATION:
    Cash paid during the year for:
      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

     Add:  Management fee                  -              -            6,500

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

      Cash received                    $    -        $    -      $   762,345


  Cash received                        $    -        $    -      $   762,345

  Applied to:
    Management fee                          -             -           (6,500)
    Sale of stock                           -             -         (100,000)
    Intercompany indebtedness               -             -         (655,845)

                                            -             -         (762,345)

                                       $    -        $    -      $      -

</TABLE>



                                  (Concluded)

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


				       -21-

<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 when  title passes and 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.

					-22-


<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 on the weighted average
     number of shares outstanding during  the year:  1,611,317 in 1997 and 1996
     and 1,614,726 in 1995.

     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.


				       -23-



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.





				       -24-

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

NOTE 4 - INVENTORIES

     Inventories consist of the following:
                                        	           1997        1996

           Merchandise for resale    	            	 $228,583    $314,447

NOTE 5 - PROPERTY AND EQUIPMENT

     Property and equipment consist of the following:
		                                         1997         1996         USEFUL LIFE

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

           Net property and equipment                $  20,600    $  32,028

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.

NOTE 7 - LONG-TERM DEBT

        Long-term debt payable consist of the following:
                                                       	   1997        1996

           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


				       -25-


<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:

                                         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

        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:

                                                        1997        1996
           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   $     -     $     -

        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:

                                             1997         1996        1995
           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


				       -26-


<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 Electronics  Corporation, Federated Purchaser, Inc. received
        approximately $360,000, including  $106,500  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 acquire Wise Components, Inc. for an exchange of
        stock which will  be accounted for as a purchase.  The purchase of Wise
        Components, Inc. has not been consummated as of October 31, 1997.

        The  terms of the agreement  call  for  Federated  Purchaser,  Inc.  to
        exchange  4,491,988  newly issued shares of its common stock for all of
        the outstanding capital stock of Wise Components, Inc.



				       -27-

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



NOTE 14 - PROPOSED ACQUISITION (CONTINUED)

        The  following unaudited  proforma  information  for  the  years  ended
        October 31, 1997, 1996 and 1995 give retroactive effect of the proposed
        acquisition  of Wise Components, Inc., which will be accounted for as a
        purchase when  consummated.   The  unaudited proforma information gives
        retroactive effect to the foregoing  transaction  as if it had occurred
        at  the  beginning of each year presented.  Such information  does  not
        purport to  represent  what  the  Company's results of operations would
        actually  have been if the foregoing  transactions  had  actually  been
        consummated   on  such  dates  or  project  the  Company's  results  of
        operations for any future period or date.

                                          YEARS ENDED OCTOBER 31,
                                   1997           1996           1995
                            	    (Unaudited Proforma Information)

        Revenues, rounded            $15,559,000   $19,417,000    $19,296,000

        Net income (loss), rounded   $     3,000   $   189,000    $   100,000

        Income (loss) per share      $       .00   $       .03    $       .02

        Cash dividends per share     $         -   $        -     $         -

        Weighted average number
          of shares outstanding        6,103,305     6,103,305      6,106,714







				       -28-
<PAGE>

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

      None.

                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY.

       The information  required  in  response  to this item is incorporated by
reference  to  the  Company's  Proxy  Statement  for  the   1998 Annual  Meeting
of Shareholders, which the Company will file with the Securities  and  Exchange
Commission no later than 120 days after  October  31, 1997.


ITEM 11. EXECUTIVE COMPENSATION.

       The information  required  in  response  to this item is incorporated by
reference  to  the  Company's  Proxy  Statement  for  the   1998 Annual  Meeting
of Shareholders, which the Company will file with the Securities  and  Exchange
Commission no later than 120 days after  October  31, 1997.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

       The information  required  in  response  to this item is incorporated by
reference  to  the  Company's  Proxy  Statement  for  the 1998 Annual Meeting of
Shareholders, which the Company will file with the Securities  and  Exchange
Commission no later than 120 days after  October  31, 1997.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

       The information  required  in  response  to this item is incorporated by
reference  to  the  Company's  Proxy  Statement  for  the 1998 Annual Meeting of
Shareholders, which the Company will file with the Securities  and  Exchange
Commission no later than 120 days after  October  31, 1997.





				       -29-
<PAGE>
                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

      (A)(1) AND (2) FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

      These documents  are  included  in the response to Item 8 of this report.
See the index on page 14.

      (3)   EXHIBITS

       The following exhibits are filed with this report:

                                                            SEQUENTIALLY
EXHIBIT NUMBER          EXHIBIT DESCRIPTION                 NUMBERED PAGE

      22                Subsidiaries of the Company

      (C)   REPORTS ON FORM 8-K:

      On  October 1, 1997, Federated Purchaser,  Inc.  ("Federated")  announced
that it signed  an  agreement  with  Wise  Components,  Inc.  ("Wise"), and its
chairman and sole shareholder, Martin L. Blaustein ("Blaustein"),  under  which
Federated  will  issue  approximately 4.5 million shares of its common stock to
Blaustein in a tax-free exchange  for  all  of the outstanding shares of Wise's
common  stock.  Upon closing, Wise will become  a  wholly-owned  subsidiary  of
Federated  and  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 transaction is expected
to close in the second quarter of fiscal 1998.


      (D)   EXHIBITS:

      Exhibits are listed above in response to Item 14(a)3.

            FINANCIAL STATEMENT SCHEDULES:

      Schedule V - Valuation and Qualifying Accounts and Reserves

      All other schedules  are omitted because they are either inapplicable, or
not  required,  or  because  the   required  information  is  included  in  the
consolidated financial statements or notes thereto.

      Individual financial statements  of  the  Company are omitted because the
Company is primarily an operating company and the  subsidiaries included in the
consolidated financial statements filed herein are wholly-owned subsidiaries.





				       -30-
<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
January 28, 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,   January 28, 1998
HARRY J. FALLON              Principal Executive Officer,
                             Principal Financial
                             Officer, Principal
                             Accounting Officer and
                             Director


/S/ EDMUND L. HOENER         Director                      January 28, 1998
EDMUND L. HOENER


/S/ EDWIN S. SHORTESS        Director                      January 28, 1998
EDWIN S. SHORTESS


/S/ JANE A. CHRISTY          Director, Vice                January 28, 1998
JANE A. CHRISTY              President Operations





				       -31-

<PAGE>
                               INDEX TO EXHIBITS


                                                            SEQUENTIALLY
EXHIBIT NUMBER          EXHIBIT DESCRIPTION                 NUMBERED PAGE




      8                 Opinion Letter of Bederson & Co.
                        dated October 23, 1997

      10    (a)         Employment Agreement between Federated and Harry J.
                        Fallon

            (b)         Lease dated September 1, 1992 relating to Federated's
                        total operations (including Freedom Electronics)
                        located in Cliffwood, New Jersey (incorporated by
                        reference to Federated's Form 10-K Annual Report for
                        the year ended October 31, 1992)

            (c)         Lease Modification, dated July 18, 1995 between
                        Cliffwood Avenue Partners and Federated Purchaser
                        (incorporated by reference to Federated's Form 10-K
                        Annual Report for the year ended October 31, 1995)

            (d)         Agreement by and among Federated Purchaser, Wise
                        Components, Inc. and Martin L. Blaustein, dated October
                        1, 1997 (incorporated by reference to Federated's
                        Report on Form 8-K dated October 1, 1997)

            (e)         Employment Agreement between Wise Components, Inc. and
                        Robert Berwick, dated June 12, 1997.

      99.1              Press Release dated October 1, 1997 (incorporated by
                        reference to Federated's Report on Form 8-K dated
                        October 1, 1997)



      22                Subsidiaries of the Company (filed as an exhibit
                        hereto).

				       -32-

<PAGE>


                                  EXHIBIT 22


                          Subsidiaries of the Company


<PAGE>


                          SUBSIDIARIES OF THE COMPANY

                                                      Percentage of Voting
                              Jurisdiction of         Securities Owned by
SUBSIDIARY                    INCORPORATION           THE COMPANY

Federated Purchaser, Inc.     Pennsylvania                  100%







<PAGE>


                                        SCHEDULE V

                                 FEDERATED PURCHASER, INC.
                      VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

<TABLE>
<CAPTION>

   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

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

</TABLE>