SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

|X|  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995

|_|  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT
     OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _________

                           Commission File No. 0-18193

                          PLASTIGONE TECHNOLOGIES INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)
                

             Florida                                            59-2712878
 ------------------------------                                ---------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

2814 South Street, Fort Myers, Florida                                33916
--------------------------------------                                -----
(Address of principal executive offices)                             Zip Code

Issuer's telephone number:  (813) 334-2699

Securities registered under Section 12(b) of the Act:  None
                                                       ----
Securities registered under Section 12(g) of the Act:  
                                        Common Stock, $0.01 par value per share
                                        ---------------------------------------

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

                                  Yes_____     No  X

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

Issuer's  revenues for its most recent  fiscal  year:  For the fiscal year ended
December 31, 1995: $2,220,749.

The aggregate market value, calculated on the basis of the average bid and asked
prices of such stock on the National  Association of Securities Dealers Bulletin
Board,  of the voting stock held by  non-affiliates  of the Registrant at May 5,
1997, was approximately $2,154,818.

There were 14,028,265 shares of Common Stock outstanding at May 5, 1997.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None



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                                     Part I

Item 1. Description of Business
-------------------------------

The Company

     Plastigone  Technologies  Inc. (the "Company or Plastigone") was organized,
on April  24,  1986,  as a  Florida  corporation,  originally  under the name of
Ideamasters, Inc.

     The Company  manufactures and sells degradable and  non-degradable  plastic
film, primarily  agricultural mulch film. In addition, the Company sells a value
added  category  of films made from  different  blends of resins  for  different
applications  including red and green  reflective  films,  "super tuff" film and
"super  strength" film. The Company also sells  degradable  plastic compost bags
which are  manufactured  to the  Company's  specifications,  by others,  using a
patented degradable additive supplied by the Company. The degradable additive is
also sold to others for incorporation into their own degradable products.

     Plastigone holds the exclusive rights, in North and South America including
the Caribbean,  to use and resell a patented  degradable additive (See "Patents,
Trademarks and  Licenses")  that when blended with  polyethylene  plastic resins
creates a  biodegradable  plastic that is  activated by exposure to  ultraviolet
(UV) light.  The Company  through  different  formulations  of the  additive can
control  the length of time (from one month to two years)  that is  required  to
activate the degradation  process.  The plastic first  disintegrates  into small
flakes  and  subsequently  degrades  into  low  molecular  fragments.  Once  the
degradation process has been activated degradation continues even if the plastic
is buried  beneath the soil. The plastic will continue to biodegrade and it will
be completely  consumed by micro-organisms  and bacteria converting it back into
its  natural  elements  of carbon  dioxide  and  water.  Unlike  other so called
degradable  plastics  there is no  long-term  build up of  plastic  residues  or
toxicity in the soil.

     As  concerns  over   environmental   pollution   mount,   the  disposal  of
non-degradable   agricultural   mulch  film  and  plastics  in  general  becomes
increasingly difficult. Most states have laws banning the burning of plastic and
limiting  the use of plastic  bags in land fills.  Although  these laws have not
been strongly enforced historically,  this is beginning to change,  particularly
in  Florida  and  California.  Plastigone,  as  the  only  producer  of  a  true
photo-biodegradable  plastic in the  Americas,  is in a unique  position to take
advantage of these growing trends.

Agricultural  Mulch Film

     The use of plastic  mulch film has become  routine for  growing  high value
fruits and  vegetables.  The use of plastic mulch film offers many advantages to
the  farmer.  The film is spread over large  areas,  creating  controlled  micro
environments  to promote  plant  growth.  The mulch warms the soil by collecting
heat from the sun,  keeps in moisture,  protects  against wind and rain erosion,
retards leaching away of fertilizers and prohibits growth of weeds, consequently
minimizing the use of


                                       -2-

<PAGE>



fertilizers,  pesticides and weed-killing  chemicals.  The use of such films can
shorten the growing season and increase  yields by up to 115%.  Depending on the
crop, between 150 and 300 pounds of plastic are used per acre.

     Several factors have contributed to the expansion of the degradable plastic
mulch film market.  Spreading a thin film of  non-degradable  plastic over large
areas that must be disposed of after harvest poses problems of both disposal and
concentration  of  pollutants.  Burial of  non-degradable  plastic mulch film is
impractical,  as the  presence  of plastic  residue  in the soil  makes  further
cultivation  difficult by clogging machinery.  After harvest, the non degradable
film must be rolled up,  manually  loaded on trucks,  and disposed of by burial,
burning or dumping. Savings to farmers using Plastigone(R) degradable mulch film
instead of non-degradable  film currently can amount to as much as $125 per acre
and will increase as disposal and labor costs rise.  Savings will vary according
to regional  farming  practices and local disposal  regulations.  As a result of
recent governmental immigration regulations,  farm labor costs and plastic mulch
film removal  costs are  expected to continue  increasing,  consequently  making
degradable plastic film a more economical choice.

     Attempts at recycling non-degradable agricultural film have been difficult.
One hundred  pounds of plastic mulch film can weigh up to 300 pounds when picked
up due to organic material, debris, and soil clods which stick to the film while
lying in the field.  The film must be rolled up by hand or  machine,  completely
cleaned  of the  soil,  plant  residue  and  foreign  matter,  transported  to a
processing plant, ground up and reprocessed.  At present, this process,  without
subsidies,  is not economically  feasible and when non-degradable  mulch film is
removed and transported to holding locations, there is the additional problem of
concentrated leaching of pesticides,  herbicides, fumigants and fertilizers into
the water table.  The Company's  solution to these problems was the introduction
of  Plastigone(R)  degradable  agricultural  mulch film, now manufactured at its
Fort Myers, Florida location.  In 1995,  degradable plastic mulch film accounted
for approximately 40% of the Company's sales.

     The  Company's  customer base for plastic mulch film ranges from very small
to very large  farms in North  America and Mexico.  The  Company's  distribution
channels  consist of sales  directly to growers with no  mid-level  distribution
network, sales to farmers through commissioned agents, and sales to distributors
who sell and extend credit to small farmers and larger growers.

     Through a network of  distributors,  the Company is  continuing to assemble
and train a nationwide sales force. Distributors typically order products by the
truckload and sell to the farmers.  Distributor  relationships are not exclusive
nor subject to a written  agreement.  The Company  establishes its relationships
with  distributors  on an informal basis which can be terminated by either party
at any time.

     Since the Company started  manufacturing its own mulch film, it has added a
co-extruded  (two layer),  non-degradable,  white-on-black  film,  which is sold
during  the second  and third  quarters  of the year.  Typically,  these  fiscal
quarters have, as a result of seasonality, been weak for the Company's


                                       -3-

<PAGE>



sales.  Management expects that the Company will be less affected by seasonality
of the black film market  because of the white on black film and other  products
it now offers.

Compost Bags

     Through the Federal  Land Fill  Reduction  Legislation  of 1976 the federal
government has mandated the reduction of debris entering land fills,  and states
and  municipalities  are being forced to seek solutions to the problem.  Because
approximately  25% of the content of land fills is  compostable  lawn and garden
waste,  composting represents a future alternative to land fill. The benefits to
the  ecology  and  economy  of  re-deploying   composted   vegetation  are  well
documented,  as is the need for land fill reduction. The Company's UV activated,
biodegradable  compost  bag was  specifically  designed  to meet this need.  The
photo-biodegradable bag is generally 32 by 40 inches and includes a draw string.

     Certain  states  and  municipalities  have  mandated  degradable  bags  for
compostable  waste. The Company's compost bag has been accepted for mandated use
in  Charlotte  County,  Florida  as the  only  photo-biodegradable  bag that met
specifications.  The  Company is  aggressively  moving to expand  sales in these
markets both directly and through distributors. Currently distribution is direct
to retailers in Florida, and through distributors in other parts of the country.
This bag is available,  in certain areas, in supermarkets and other outlets as a
necessary  component in a system for  municipalities  to compost lawn and garden
waste and  thereby  reduce the volume  placed in land fills.  Customers  include
Publix Supermarkets, National Serve All, True Value Hardware and Walmart as well
as other major  retailers who stock the product on a regional  basis The Company
also sells direct to certain end users

     Currently,  the manufacturing of these bags is subcontracted out to others.
The Company  currently  does not have the  necessary  machinery and equipment to
manufacture the bags in house. The Company  regularly  evaluates the feasibility
of manufacturing the bags in house.

Industrial Stretch Wrap Film

     The Company has  developed and is about ready to  manufacture  and market a
premium  industrial  stretch wrap film. Stretch wrap film is used extensively in
the  wrapping  of pallets  loaded with goods in  preparation  for  transport  or
storage.  The  Company's  product is a  one-sided-cling,  300%  high-performance
stretch  film as compared to the general  commodity  market  product  which is a
two-sided-cling,  175% stretch  film. A  one-sided-cling  film has the advantage
over a two-sided-  cling film,  in that pallets can be placed next to each other
without the stretch wraps of the two pallets  adhering and entangling  with each
other and  ultimately  ripping and spilling  the  contents of the  pallets.  The
advantage  of using a 300%  stretch  film over a 175%  stretch film is that less
stretch  film is  employed  to do the  same  job  thereby  reducing  the cost of
packaging..

     The Company has further  plans to expand its  industrial  stretch  films to
include specialty items such as antistatic  stretch film, UV stabilized  stretch
film and a photo-biodegradable stretch film


                                       -4-

<PAGE>



employing  the Company's  patented  additive.  Stretch film is non seasonal,  as
compared to agricultural  mulch film, which will allow the Company to maintain a
more constant level of business throughout the year. Specialty stretch films are
part of an overall stretch film market that is estimated to be approximately 1.8
billion pounds annually.

Silage Wrap Film

     A  further  application  of  the  stretch  film  manufacturing   technology
developed  by the  Company  will be the  manufacture  of silage  wrap film.  The
formulation  of this  product  has  already  been  established  by the  Company.
Although  current  estimates  are that the market size for silage wrap is 100 to
125 million  pounds  annually,  very little is sold in the United  States.  As a
result  there is a  potentially  very large,  although  untapped,  market in the
United  States.  The Company plans on entering this market during the later part
of 1997.

Degradable Additive

     Opportunities  exist in certain  industry  segments  to sell the  Company's
patented additive as an independent line. With the exclusive licensing rights to
all of the Americas for the photo-  biodegradable  technology,  Plastigone is in
discussions  with  plastics  manufacturers  in North  America and both South and
Central America to supply the additive on a wholesale  basis.  The Company is in
the testing phase with certain  manufacturers  to supply the additive for use in
specific situations, e.g. arms manufacturers are testing the additive for use in
plastic shotgun shell waddings.

     Plastigone(R)  additive (also referred to as Masterbatch)  can be used in a
large  number  of  different  plastic  products,   including  products  made  of
linear-low-density  polyethylene,  low density  polyethylene,  and high  density
polyethylene.  In the United  States,  each of these  products  has  commanded a
specific  market  area  and  has  attracted  its own  family  of  producers  and
distributors. The Company plans on pursuing these markets in the near future.

     In 1988, the Company introduced  Plastigone(R)  Litterless #221 masterbatch
degradable  additive for use in  nonagricultural  applications.  The Company has
sold a degradable  masterbatch to banana growers in Central and South America to
test degradable  banana bags. A formulation  for degradable  grape vine has been
determined to have the same characteristics as the tape presently in use, except
the tape  currently  used in the  industry is made from PVC, a  carcinogen.  The
Company  presently intends to pursue these markets.  Masterbatch  additive sales
were not significant in 1995.

Market Strategy

     To promote the long-term  position of the Company as a market  leader,  the
Company adopted the strategy to become the authoritative  voice in plasticulture
(plastics  in  agriculture;   whether  degradable  or   non-degradable),   using
university  affiliated  experts  and  other  recognized   professionals  in  the
agricultural industry. The Company's aim is to be considered a definitive source
of thoroughly tested technical data for this method of farming. To this end, the
Company worked closely with the


                                       -5-

<PAGE>



American Society for Plasticulture in sponsoring independent university research
and  field  testing,  and  organizing  international  symposiums  on the  use of
degradable plastics in agriculture.

     The Company has adopted a strategy which it believes will increase sales of
both degradable and  non-degradable  plastic film and related products.  Because
the use, both commercially and privately, of degradable products is a relatively
new and  developing  market,  the Company  continually  monitors  the demand for
degradable products, and acceptance of such products by segments of industry. As
demand  and  acceptability  increase,  the  Company  will,  as it does  with all
prospective markets it considers, study the potential for the Company to compete
for  orders  for the  particular  product  as well as the  profitability  of the
potential sales when deciding  whether to enter the market.  It is expected that
as demand for degradable  products  increases,  the Company's  emphasis on these
products will also increase.  However, until such time as the Company determines
that  a  change  in its  strategy  is  required,  it  will  continue  to  market
non-degradable  products as well so as to maximize its involvement in profitable
markets and to create financial stability through a diverse product base and the
ability to adjust production to the needs of a particular  industry segment.  As
with  its  agricultural  products,  the  Company's  aim  is to be  considered  a
principal source on degradable plastic technology in the composting environment.
Management  believes that  successful  results from field tests  currently being
conducted  by various  municipalities  around the country  would  result in wide
spread use of the Company's  degradable compost bags. However, the primary focus
is currently in those States that have implemented laws requiring  separation of
yard waste for  composting.  Many  states  have passed such laws and a number of
additional  states  have  legislation  pending.  State  agencies  are engaged in
determining  the  best  methods  for  implementing  these  programs.  Plastigone
continues to offer its  assistance  to  municipalities  attempting  to establish
standards for degradable compost bags.

Manufacturing Operations

     Until August 1992, the Company's operations consisted of (a) subcontracting
the  manufacture of plastic film utilizing the additive for sale of the finished
degradable  product to its own  customers;  and (b)  marketing  the  additive to
manufacturers of plastic products, neither of which was very successful.

     On  August  15,  1992,  the  Company   commenced   manufacture  of  plastic
agricultural mulch film in its own plant in Ft. Myers,  Florida,  producing both
degradable  and  non-degradable  film.  This has enabled the Company not only to
control  the  quality of its product  line but also  assure  timely  delivery of
customer orders.

     The  Company  presently  limits  its   subcontracting   activities  to  the
manufacture of products other than plastic film. The Company has determined that
certain  other  products  such as compost  bags,  are able to be produced to its
standards by others,  while plastic film, which has more exacting standards,  is
not conducive to manufacture by others.



                                       -6-

<PAGE>



Competition

     Although the Company  believes  that its UV degradable  agricultural  mulch
film is a unique  product,  other forms of  degradable  plastics are  available.
There is only one recognized  product known to Plastigone  that does not require
exposure to ultraviolet  radiation before  disintegration.  This product is very
expensive and the Company is of the view that it is therefore not structured for
use in competitive film products.

     Corn  starch  plastic  is the  predominant  alternative  to  the  Company's
degradable products. It consists of a mixture of corn starch and plastic.  While
the corn starch biodegrades,  the plastic is not biodegradable.  The plastic may
be as  much  as 80% of the  total  product  .  Corn  starch  plastic  has  other
disadvantages:  it does not blend well with the melted plastic resins making the
manufacturing process much more difficult;  it does not have a stable shelf life
especially under humid  conditions;  and the degradation  process cannot be time
regulated.  Lactose plastic is another  alternative.  These plastics use lactose
rather than starch but have much the same disadvantages as corn starch plastics.
Hydro-degradable  plastic is an alcohol based plastic that  dissolves into small
fragments in water but does not biodegrade.  The  degradation  process cannot be
regulated and is rapid once in contact with water. Photo-degradable plastic is a
UV  activated  degradable  plastic  that  embrittles  and breaks down into small
flakes.  Its  disadvantages are that it does not biodegrade and builds up in the
soil. The  degradation  process as well cannot be time  regulated.  Plastigone's
technology  is  unique  in that it is  truly  photo  and  biodegradable  and its
degradation  process can be time regulated.  This gives Plastigone a significant
competitive  advantage in the  agricultural  market as well as in certain  other
markets.

     There are many competitors in the  non-degradable  agricultural  mulch film
market.  The Company's  prices for this product are competitive  with other like
products on the  market.  The Company  has an  advantage  in Florida,  its major
market area,  since customers can save on packaging and freight costs by picking
up the  products  at the  factory  in Ft.  Myers.  In  addition  to the  regular
non-degradable  mulch film,  the Company  sells a value added  category of films
made from different blends of resins for different  applications,  including red
and green  reflective  films,  "super tuff" film and "super  strength" film. The
Company also regularly includes in its production schedule smaller custom orders
for these high value films.  The Company's  embossed cast film line is producing
plastic  mulch film which the  Company  believes  to be of the  highest  quality
available in each category.  The plastic mulch film  manufactured by the Company
to its exacting standards is performing well in its agricultural applications.

     With respect to the Company's  nonagricultural  products,  its  competitors
consist of large chemical companies,  such as Mobil, Union Carbide, Dow Chemical
and  Ampacet,  which  have much  greater  financial,  personnel,  manufacturing,
research and  development  resources  than the Company,  as well as  established
reputations and distribution  networks. The Company competes by concentrating on
smaller  specialty  niche markets that are overlooked or are too small for these
larger  competitors  to enter on a profitable  basis.  There can be no assurance
that the Company's


                                       -7-

<PAGE>



nonagricultural  products or its  degradable  products will achieve a successful
penetration of any markets.

Source of Supply

     Except for the  degradable  additive,  all other raw materials  used in the
manufacturing   process  are  readily  available  from  different  companies  at
competitive prices.  Plastic resin used in the manufacturing of film is produced
by companies like Dow Chemical,  Union Carbide, Chevron and Ampacet Corp. and is
purchased  directly  from  them or  distributors.  The  degradable  additive  is
purchased from the Company's licensor. (See "Patents, Trademarks and Licenses").
The Company has no reason to believe that its licensor  will be unable to supply
its needs;  however,  the Company can also purchase the degradable additive from
at least one foreign licensee.

Dependence on One or a Few Major Customers

     During the year ended December 31, 1995, one of the Company's  distributors
accounted for 14% of the Company's sales. No other customer accounted for 10% or
more  of the  Company's  sales.  The  five  largest  customers  of  the  Company
represented an aggregate of approximately 37% of total product sales.

Patents, Trademarks and Licenses

     The inventors and patent owners of the technology  underlying the Company's
photo- biodegradable products are Gerald Scott and the estate of Dan Gilead, who
granted the rights to exploit their patents and  applications  for patents,  and
future  modifications  or  improvements  thereof,  to  Plastopil-Hazorea,   Ltd.
("Plastopil"),  an Israeli  limited  partnership.  The Company's  agreement with
Plastopil grants to the Company the exclusive license in the Western  Hemisphere
(except  as to  baling  twine in the  United  States)  to use and sell  products
utilizing  the  Scott-Gilead  technology.  Except under certain  conditions  the
Company will not  manufacture  the additive  itself,  but will  purchase it from
Plastopil or its licensees  outside of the United  States.  Although the patents
underlying  the license  expire in 2001 and 2002 it would be very  difficult for
others to duplicate the processes,  know how and technology  required to produce
the  additive.  Plastigone  plans to modify and improve the additive and reapply
for new patents before their expiration.

     The Company's  license from Plastopil is essential to its  manufacture  and
marketing of photo- biodegradable plastic film, which accounted for 40% of sales
revenue  in 1995,  as  compared  to 33% of  sales  revenue  in  1994.  It is the
intention of the Company to continue to increase its sales of photo-  degradable
plastic film as part of its overall strategy of marketing its products,  whether
degradable or non-degradable, to the special needs of customers.

     The  Company  is  currently  engaged  in  the  marketing  of  UV  activated
biodegradable  additives for plastic film under the trademark "Litterless #221";
and manufacturing and marketing of photo- 

                                      -8-

<PAGE>

biodegradable plastic film and plastic bags under the trademark  "Plastigone(R)"
and non-degradable plastic film under the tradename "Plastay."

FDA Compliance

     Management  believes  that  its  formulations  comply  with  Food  and Drug
Administration  requirements  relating  to plastic  bags and sacks for  grocery,
supermarket,  and retail store  applications.  Temporary  contact of the film to
food products has been approved.

Research and Development

     During its  development  stage,  the Company was involved in sponsoring the
testing of its degradable mulch film by agricultural departments at more than 25
colleges  and  universities  around  the  country.  The  testing  validated  the
Company's  representations  concerning  degradability  and nontoxicity even with
variations in crops, growing seasons, geographic location, temperature and other
variables.

     Comprehensive   research  performed  at  major  agricultural   centers  and
laboratory  reports also confirmed the  photo-biodegradability  of the Company's
product and that it was totally non toxic according to water and soil samples. A
study done by  Alvarez,  Lehman &  Associates,  Inc.,  of  Tallahassee,  Florida
demonstrated that there is no toxicity when Plastigone's  degradable  product is
degraded in water and fed to fish or plant life.  Another study done by Research
Triangle Institute,  of Research Triangle Park, North Carolina demonstrated that
the additive did confer degradability to otherwise inert plastic.

     During 1995 the Company  focused its  research and  development  efforts on
several  activities.  The Company  formulated  and developed a high  performance
industrial  stretch wrap with one sided cling and 300% stretch.  Extensive  work
was performed on the base  manufacturing  equipment and  electronic  controls to
enable  efficient  production  of stretch  wrap,  resulting  in an  increase  in
capacity of almost 100%. This was accomplished  through the use of the Company's
staff as well as outside  consultants.  The Company  believes  that stretch wrap
will become its major product line in future years.

     General  research  and  development  is ongoing and  management  expects to
develop  new  products  focused  on niche  markets  that are too small for major
chemical companies to pursue. In 1995 and 1994 the Company invested $256,032 and
$0, respectively, in research and development.

Employees

            The Company  presently  employs 18 people on a full time  basis,  of
whom six are in  sales  and  administration,  and the  balance  are  engaged  in
manufacturing. None is represented by a collective bargaining agent. The Company
believes its relations with its employees to be good.



                                       -9-
<PAGE>



Item 2. Description of Property
-------------------------------

     The  Company  owns 1.8 acres  located at 2814  South  Street,  Fort  Myers,
Florida 33916. The Company has two buildings  located on the premises,  totaling
15,000  square feet,  which house its  executive  and  manufacturing  facilities
(including laboratory  facilities for quality control).  The Company has given a
mortgage on the property in connection  with its  acquisition  of the site.  The
balance of the mortgage  debt was $205,165 as of December 31, 1995. A semiannual
payment of $12,530 is due April 15,  1997 and a balloon  payment of  $202,245 is
due on October 15, 1997.  These payments  include  interest at 10%. (See Item 7.
Financial  Statements  - Notes to  Financial  Statements  - Note E). The Company
leases an additional  2.6 acres  including a 2,800 square foot storage  building
from the city of Fort Myers.  The Company has an option to purchase the property
from the city.

Item 3. Legal Proceedings
-------------------------

     The  Company is  currently  a defendant  in certain  actions,  all of which
involve  former  customers or suppliers  of the  Company.  Such actions  involve
claims for  non-payment of amounts due totaling less than $100,000 in aggregate.
No  assurance  can be given as to if, or when,  such  claims will be resolved or
that such  resolution  will be in favor of the Company.  (See Item 7.  Financial
Statements - Notes to Financial Statements - Note I).

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

     None.



                                      -10-
<PAGE>



                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
------------------------------------------------------------------------------

     On June 7, 1994, the Company's common stock,  which traded under the symbol
GONE, was delisted from the Nasdaq SmallCap  Market.  The  determination  by The
Nasdaq Stock Market, Inc. to delist was on the basis of the Company's failure to
meet the filing requirements of Schedule D of the NASD (National  Association of
Securities  Dealers) Bylaws.  The Company's common stock has since traded in the
over-the-counter  market. The last reported high and low bid price per share for
the  Company's  common  stock as  reported on Nasdaq on June 7, 1994 was 7/8 and
5/8, respectively.  There were no reported bid or asked prices for the Company's
common stock from June 8, 1994 to January 2, 1996.

     Information  is set forth below  concerning the high and low bid prices per
share for the Company's  Common Stock for each quarter of 1996.  The  quotations
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions.

                1996                    High Bid                Low Bid
                ----                    --------                -------

            First Quarter                1 / 2                  1/16

            Second Quarter               7/16                   3/16

            Third Quarter                3/8                    1/8

            Fourth Quarter               11/32                  3/32

     The Company estimates that, at December 31, 1996, there were  approximately
1,800 shareholders. The Company has never paid cash dividends.

Item 6. Management's Discussion and Analysis or Plan of Operation.
------------------------------------------------------------------

General

     The fiscal year ended  December 31, 1995 was a  disappointing  year for the
Company.  A number of key events,  principally the weather and NAFTA,  adversely
impacted the Company's operating results for the period.

     The Southeastern U.S. experienced the highest rainfall recorded since 1936,
resulting  in three  major  floods.  In  addition,  1995  was a record  year for
hurricanes.  Agricultural  mulch film customers either lost crops or were unable
to plant because of flooded  fields.  Farm  production was reduced by as much as
one-third.  Many farms were forced into bankruptcy,  or discontinued farming all
together. Some were forced to sell farmland just to stay in business.


                                      -11-
<PAGE>



     In 1995,  the North  American Free Trade  Agreement  (NAFTA) came into full
operation.  Under NAFTA Mexican farmers can grow, ship, and deliver to buyers in
the U.S. at a lower cost than the American farmer. Florida farmers, historically
produced and sold $600 million worth of tomatoes or 58% of the U.S. market. As a
result,  in 1995 Florida  farmers  produced only 37% of the tomatoes sold in the
U.S. market, a decline of approximately $200 million.

Revenues

     Net revenues for the year ended December 31, 1995 were $2,220,749  compared
to $3,253,728  for the year ended  December 31, 1994. a decrease of 32%. Most of
this decrease was attributable to the aforementioned  events. Lost revenues,  in
turn, also contributed to severe cash flow problems,  resulting in the Company's
inability to obtain raw materials on a timely basis. During 1995 the Company had
95 days of production downtime.

     Degradable  plastic  mulch  film  accounted  for  approximately  40% of the
Company's  revenues in 1995 as compared to 33% in 1994.  The Company's  revenues
are  very  seasonal  due to the  fact  that  the  Company  is  dependent  on the
agricultural market.  Revenues during the 1st quarter of 1995 and 1994 accounted
for approximately 48% and 31%, respectively of total revenues for 1995 and 1994.

     It is the Company's  intention to diversify away from its dependence on the
agricultural market.  Although, the agricultural market will always be a part of
the Company's  overall  strategic  plan, the Company plans to diversify into the
industrial  film  market  during the 2nd  quarter of 1997 with  specialty  niche
market films.  This will include a one-sided cling, 300% stretch film, which the
Company has already  formulated and produced in limited test runs, with positive
results.  Other specialty films will include  anti-static  film and silage wrap.
The Company  also plans on  aggressively  developing  the market for  degradable
compost bags and its patented additive. Arms manufacturers are currently testing
the additive in shotgun shell waddings.  Remington Arms, after extensive testing
with very positive results,  is expected to began purchasing the additive during
1997. The Company expects other arms manufactures to follow suit shortly.

Cost of Goods Sold

     Cost of goods  sold as a  percentage  of sales was 87 % for the year  ended
December 31, 1995 as compared to 75% for the year ended December 31, 1994.  This
increase was a result of several factors.  Cash flow problems as discussed above
caused a stop and start again manufacturing situation as the Company had to halt
manufacturing  numerous  times  because of a lack of raw  materials and start up
again as  receivable  collections  allowed the purchase of raw  materials.  Also
contributing to increased  manufacturing  costs were fluctuations in the cost of
plastic resins.

Research and Development

     The  Company  invested  $256,032  in  research  and  development  in  1995,
primarily  in the area of  specialty  stretch  wrap  films.  This  included  the
formulation, machinery and electronics


                                      -12-
<PAGE>



modifications and manufacturing test runs. As discussed above, the Company plans
to  aggressively  pursue this market  beginning  in the 2nd quarter of 1997.  No
research and development  costs were  recognized  during the year ended December
31,  1994.  The Company  anticipates  that some  expenditure  for  research  and
development  may be  necessary  in  future  periods  to  develop  certain  other
specialty  films.  The Company plans on  aggressively  pursuing these markets in
connection  with its overall  business  strategy of  diversifying  away from its
dependence  on a  currently  depressed  agricultural  market  and  manufacturing
products  which  respond to the  special  needs of  certain  niche  markets.  No
estimate of these costs is possible at this time.

Selling General and Administrative

     Selling,  general and  administrative  expenses  were $827,867 for the year
ended  December 31, 1995 compared with $862,285 for the year ended  December 31,
1994.  This  reduction of $34,418 was a result of efforts to control and reduce,
where possible, certain expenses such as legal and consulting expenses.

Interest Expense

     Interest  expense in 1995 was  $120,646  or 5.4% of  revenues  compared  to
$134,018 or 4.1% of revenues for 1994. The decrease of $13,372 was a result of a
reduction in short-term borrowings during 1995.

Liquidity and Cash Requirements

     During the 1st quarter of 1997 the Company  entered into an agreement  with
Oakes,  Fitzwilliams & Co., L.P., an investment banking firm, whereby $1,000,000
was raised  through the issuance of  convertible  debt.  (See Item 7.  Financial
Statements - Notes to Financial  Statements  Note L). The Company also raised an
additional  $528,000 in 1996 and $202,000 in 1995 in net  proceeds  from private
placements.  Certain of these proceeds were used to fund the retirement of notes
payable as indicated below.

     The Company believes that it now has sufficient  working capital to provide
for its  operations  and to allow the Company to diversify its revenue base away
from the depressed and seasonal  agricultural market and into the specialty film
market as part of its overall business strategy.

     As of  December  31,  1995 the  Company  had a working  capital  deficit of
$1,643,539.  Of the $600,000 included under Current Liabilities as Notes Payable
$275,000 was  subsequently  repaid  during 1996 and  $225,000  was  subsequently
converted to common stock and warrants in 1996. Accrued Interest of $155,571 was
also converted to common stock and warrants  during 1996. (See Item 7. Financial
Statements - Notes to Financial Statements - Notes D & L).

     The Company does not believe that  inflation  has had a material  effect on
its sales or operations.


                                      -13-
<PAGE>



Item 7. Financial Statements.
-----------------------------

     Attached hereto at pages F-1 to F-16

Item 8.  Changes  In  and  Disagreements  With  Accountants  on  Accounting  and
Financial Disclosure.
--------------------------------------------------------------------------------

     None.

                                    PART III

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

     Certain  information about directors and executive officers of the Company,
is contained in the following table:

Name                           Age      Position
----                           ---      --------
                                       
Duncan Fitzwilliams            52       Chairman of the Board and Director
                                       
Ron Davis                      50       President, Chief Executive Officer
                                        and Director
                                       
William E. Clegg III           48       Vice President, Chief Financial Officer
                                        and Secretary
                                       
James Gellert                  28       Director
                                       
Avi Harpaz                     51       Senior Vice President and Director
                                       
Bruce Hausman                  66       Director
                                     
Business Experience

     Duncan J. L. Fitzwilliams has been a Director of the Company since February
1996.  Since  1987,  Mr.  Fitzwilliams  has been a  founding  member  of  Oakes,
Fitzwilliams  & Co.,  Limited.  Mr.  Fitzwilliams  is  Co-Chairman  of  Quadrant
Healthcare  plc. He is also a director  of Bespak  plc,  the Lazard Fund and The
Henry Venture (II) Fund. Mr. Fitzwilliams holds a B.A. from Oxford University.

     Ron Davis joined the Company in May 1994 as Vice President of Marketing and
Sales and was elected by the Board as President and Chief  Executive  Officer in
September 1994. He has been


                                      -14-
<PAGE>



a member of the Board of Directors  since  October  1994.  From  September  1991
through  April  1994,  Mr.  Davis was the  International  Business  Manager  for
Atlantis Films, Inc.  responsible for developing world wide sales and marketing.
From 1988 to September  1991, Mr. Davis was the Divisional  Manager of Specialty
Products  at  AEP,  Inc.  (Automatic  Extruders  of  Plastic).  responsible  for
production scheduling, inventory, pricing, customer service and sales. Mr. Davis
graduated from the University of Arkansas in 1975.

     William E. Clegg III joined the  Company in August  1996 as Vice  President
and  Chief  Financial  Officer.  Prior to  joining  the  Company  Mr.  Clegg was
self-employed as a consultant in the accounting,  finance and computer  software
field from May 1995 to July 1996.  From December  1988 to April 1995,  Mr. Clegg
was Vice President and Chief Financial Officer of Danfoss,  Inc., a manufacturer
of electronic controls. Mr. Clegg holds a B.S. in Accounting from Louisiana Tech
University.

     James H. Gellert,  has been a Director of the Company since  February 1996.
Mr. Gellert has been associated with Oakes,  Fitzwilliams & Co., L.P. since 1990
and has been a Vice  President of the firm since 1994.  Mr. Gellert holds a B.A.
from Harvard University.

     Avi Harpaz has been a Director  since the  Company's  inception in 1986 and
served as Vice  President-Finance  and Chief Financial  Officer from May 1988 to
January 1991 and as President and Chief  Financial  Officer from January 1991 to
April 1992.  Mr. Harpaz has served as Senior Vice President of the Company since
April 1992.  Mr.  Harpaz' wife is one of the principal  shareholders  of Foodis,
Inc., which controls Isratrade Associates. Isratrade Associates owns 4.9% of the
Common Stock of the Company.  Mr.  Harpaz is a certified  public  accountant  in
Israel and has a B.A. in economics from Tel Aviv University.

     Bruce  Hausman has been a Director of the Company  since August  1992.  Mr.
Hausman was associated with Belding Heminway Company,  Inc. (textiles) from 1961
until 1993, first as a consultant and, from February 1988 to May 1992, as Senior
Vice President and subsequently as a principal executive officer. He served as a
director  of  Belding  from 1978  until the sale of such  company  in 1993.  Mr.
Hausman  also served as a director of Circa  Pharmaceuticals,  Inc.  from August
1990 to July 1995.  Mr.  Hausman was elected to the Board of Directors of Daltex
Medical  Sciences,  Inc. in December of 1993 and became its  President and Chief
Executive  Officer  in May of 1995.  He holds a M.S.  from  Columbia  University
School of Business and a J.D.  from New York Law School.  He was admitted to the
New York Bar in 1980.

Item 10. Executive Compensation.
--------------------------------

     The  following   table  sets  forth   information   concerning  the  annual
compensation of the Company's chief executive  officer for the 1995 fiscal year.
None of the executive  officers of the Company received  compensation  exceeding
$100,000 during the 1995 fiscal year.




                                      -15-
<PAGE>




<TABLE>
<CAPTION>


                              Annual Compensation                                 Long Term Compensation
                              -------------------                                 ----------------------
                                                                             Awards                Payouts
                                                        Other      Restricted        Shares
Name and Principal                                     Annual        Stock          Underlying     All Other
Position               Year     Salary      Bonus   Compensation    Award ($)        Options (#)   Compensation
--------               ----     ------      -----   ------------    -----            -------       ------------
<S>       <C>          <C>      <C>       <C>                                              <C>                   
Ron Davis (1)          1995     $75,000   $12,861       ---           ---            300,000            ---
President and Chief    1994     $44,423       ---       ---         $4,135             ---              ---
Executive Officer

(1)  Mr. Davis joined the Company in May 1994.
</TABLE>


Option / SAR Grants in Last Fiscal Year
---------------------------------------

     The following  table contains  information at May 5, 1997,  relating to the
number of warrants  (stock  appreciation  rights) granted during the 1995 fiscal
year and the number and value of such  unexercised  warrants held by the officer
named in the Summary Compensation Table.

<TABLE>
<CAPTION>


                    Number of             Percent of Total                     
                   Securities              Options / SARs                      
                   Underlying               Granted to        
                  Options / SARs           Employees in             Exercise or Base
Name               Granted (#)              Fiscal Year              Price per Share          Expiration Date     
------------- --------------------   -----------------------   ------------------------   ------------------------
<S>                <C>                         <C>                      <C>                          <C> <C> 
Ron Davis          300,000                     54.9%                    $0.20                   June 30, 1998

</TABLE>

Compensation of Directors

     The Company does not  compensate  its  Directors for service as a director.
Actual expenses associated with attending meetings of the Board are reimbursed.

Employment Contracts and Termination of Employment and
Change-in-Control Agreements

     On  August  1,  1996  the  Company  entered  into a  three-year  employment
agreement  with the President and Chief  Executive  Officer,  Ron Davis,  for an
annual  salary of  $135,000  plus  annual  bonus as  determined  by the Board of
Directors.  In addition, Mr. Davis is entitled to receive incentive compensation
based on 5% of the Company's annual net operating  income, as such is defined in
the employment agreement.  In conjunction with the agreement the Company granted
Mr.  Davis  50,000  shares of common  stock and  warrants to purchase  1,000,000
shares of common stock at an exercise


                                      -16-
<PAGE>



price of $.25 per share  (one-third of which vested  immediately and the balance
vested on January 2, 1997).  In the event that during the term of the  agreement
the  Company  acquires  by  merger  or  consolidation  all  the  assets  of or a
controlling  interest in another  entity,  the Company  will grant Mr.  Davis an
additional  1,000,000  warrants  to  purchase  common  stock at $.25  per  share
exercisable in three equal installments.

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

     Security ownership of certain beneficial owners.

     The following  table sets forth, as of April 5, 1997,  certain  information
with  respect to  persons  who,  to the best of the  Company's  knowledge,  were
beneficial owners of more than 5% of the issued and outstanding  shares of stock
of the Company.



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

Title of Class   Name and Address         Amount and Nature            Percent 
                 of Beneficial Owner      of Beneficial Ownership(1)   of Class

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

Common Stock     Cazenove & Co.            2,145,190 (2)               9.4%
                 12 Tokenhouse Yard
                 London, EC2R, 7AN
                 England

                 Avi Harpaz                1,523,000 (3)               6.7%
                 16 Arugot Street
                 Herzalia, 46364
                 Israel

                 Ron Davis                 1,350,000 (4)               5.9%
                 1992 Allen Court Drive
                 Germantown, TN

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


(1)  Includes  both the right to vote and the  right to  dispose  of the  shares
     unless otherwise indicated.

(2)  According to the records of the Company,  Cazenove & Co. (i) directly  owns
     1,350,095  shares of Common Stock of the Company;  and (ii) holds currently
     exercisable  warrants to  purchase  795,095  shares of Common  Stock of the
     Company.

(3)  Includes 1,123,000 shares owned by Isratrade Associates, 1214 Capri Street,
     Coral  Gables,  Florida  33134.  According to a Schedule 13G dated March 9,
     1990, Isratrade Associates is


                                      -17-
<PAGE>



     a partnership of Isratrade,  Inc. (39.5%),  B-Trade,  Inc. (7.5%),  Foodis,
     Inc. (47%) and Albert Ifra (6%). Foodis, Inc. is the managing partner.  The
     wife  of Avi  Harpaz,  member  of the  Board  of  Directors,  is one of two
     principal  shareholders,  and an officer and  director of Foodis,  Inc. The
     Schedule 13G states that Mrs. Harpaz disclaims any beneficial  ownership of
     shares of the Company.  Also includes 200,000 shares issuable upon exercise
     of currently  exercisable  warrants and 200,000  issuable  upon exercise of
     currently exercisable options held by Mr. Harpaz.

(4)  Includes  1,300,000  shares of  Common  Stock  issuable  upon  exercise  of
     currently exercisable warrants.

     Security ownership of management.

     The following  table sets forth, as of May 5, 1997,  information  regarding
the  beneficial  ownership  of the  Company's  equity  securities  owned by each
director of the Company, the named officers and by all directors and officers as
a group:

<TABLE>
<CAPTION>

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

Title of Class  Name and Address                       Amount and Nature            Percent of
                of Beneficial Owner                    of Beneficial Ownership(1)   Class
------------------------------------------------------------------------------------------------


Common            Ron Davis                             1,350,000 (2)               5.9%
                  1992 Allen Court Drive
                  Germantown, TN

                  Avi Harpaz                            1,523,000 (3)               6.7%
                  16 Arugot Street
                  Herzalia, 46364
                  Israel

                  Bruce Hausman                           588,234 (4)               2.6%
                  4642 Bocaire Blvd.
                  Boca Raton, FL  33487

                  Duncan J.L. Fitzwilliams                          0                 0%
                  c/o Oakes Fitzwilliams & Co., L.P.
                  909 Third Avenue
                  New York, N.Y.  10022

                  James H. Gellert                                  0                 0%
                  c/o Oakes Fitzwilliams & Co., L.P.
                  909 Third Avenue
                  New York, N.Y.  10022



                                      -18-
<PAGE>




                   All Directors and Executive            3,811,234 (5)            16.7%
                   Officers as a Group ( 6 persons)

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

</TABLE>


(1)  Includes  both the  right  to vote  and to  dispose  of the  shares  unless
     otherwise indicated.

(2)  Includes  1,300,000  shares of  Common  Stock  issuable  upon  exercise  of
     currently exercisable warrants.

(3)  Includes 1,123,000 shares owned by Isratrade  Associates as to which shares
     Mr. Harpaz  disclaims  beneficial  ownership.  Also includes 200,000 shares
     issuable  upon  exercise of  currently  exercisable  warrants,  and 200,000
     issuable upon exercise of currently exercisable options.

(4)  Includes  408,367  shares  issuable upon exercise of currently  exercisable
     warrants.

(5)  Includes  2,158,367 shares issuable upon exercise of currently  exercisable
     warrants and 300,000 shares issuable upon exercise of currently exercisable
     options.

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

     Based  solely  upon  a  review  of  Forms  3 and 4 and  amendments  thereto
furnished to the Company under Rule 16a-3(d) of the Exchange Act during its most
recent fiscal year and Form 5 and  amendments  thereto  furnished to the Company
with respect to its most recent fiscal year, the following  directors,  officers
and  beneficial  owners of more than 10% of the  Company's  common stock did not
file the required reports under Section 16(a) on a timely basis:


Name                         Number of Late Reports      Number of Transactions
-----                        ----------------------      ----------------------
Ron Davis                               2                           3

Duncan Fitzwilliams                     1                           0

William E. Clegg III                    1                           1

James Gellert                           1                           0

Avi Harpaz                              2                           2

Bruce Hausman                           3                           4


     All such  individuals,  except  for Mr.  Harpaz,  have  filed the  required
reports with the Securities and Exchange Commission as of May 14, 1997, the date
of filing of this report.

Item 12. Certain Relationships and Related Transactions.
--------------------------------------------------------

     None.


                                      -19-
<PAGE>



                                     PART IV

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

(a) Exhibits

      3.1  (1)    Articles of Incorporation (as amended)
      3.2  (2)    By-Laws
      4.1  (3)    Form of Convertible Secured Loan Note Due 1999.
      4.2  (3)    Form of Regulation S Warrant.
      10.1 (4) +  Incentive Stock Option Plan.
      10.2 (5)    License Agreement.
      10.3 (6)    Amendment to License Agreement dated January 2, 1990.
      10.4 (6)    Agreements extending due date of promissory notes.
      10.5 (6)    Fort Myers City Industrial Park Land Lease.
      10.6 (6)    Lease of Apartment - Reflections Apartments.
      10.7 (6) +  Ron Davis - Warrant to purchase common stock.
      10.8 (7) +  Amended and Restated 1989 Stock Option Plan.
      10.9 +      Employment Agreement dated August 1, 1996 between Ron Davis 
                  and the Company.
      27          Financial Data Schedule.
      99.1 (3)    Placement Agency Agreement dated January 17, 1997 by and 
                  between the Company and Oakes, Fitzwilliams & Co. Limited.
      99.2 (3)    Form of Offshore Securities Purchase Agreement.
      99.3 (3)    Form of Security Agreement dated February 21, 1997 by and 
                  between the Company and Oakes, Fitzwilliams & Co. Limited, as 
                  representative of the investors in the Offering.


(1)  Incorporated  by  reference to Exhibits  3(a) and 3(b) of the  Registrant's
     Registration  Statement  on Form S-1,  File No.  33-29625 NY dated June 22,
     1989 (the "S-1 Registration Statement").

(2)  Incorporated by reference to Exhibit 3(a) of the Registrant's Annual Report
     on Form 10-K for the fiscal year ended December 31, 1990.

(3)  Incorporated by reference to the  correspondingly  numbered  exhibit to the
     Registrant's Report on Form 8-K filed on March 17, 1997.

(4)  Incorporated  by reference to Exhibit 10.1 of Amendment No. 1, dated August
     28, 1989, to the S-1 Registration Statement.

(5)  Incorporated  by  reference  to  Exhibit  10.3  of  the  S-1   Registration
     Statement.


                                      -20-
<PAGE>



(6)  Incorporated by reference to the  correspondingly  numbered  exhibit to the
     Registrant's  Annual  Report  on Form  10-KSB  for the  fiscal  year  ended
     December 31, 1994 as filed with the Securities  and Exchange  Commission on
     March 30, 1995.

(7)  Incorporated  by  reference  to Exhibit  14(a)(3)(28)  of the  Registrant's
     Annual Report on Form 10-K for the fiscal year ended December 31, 1989.

+    Management  contract or  compensatory  plan or  arrangement  required to be
     noted  as  provided  pursuant  to Item  13(a) of the  instructions  to Form
     10-KSB.

     Copies of any exhibit to this Form 10-KSB  will be  provided  upon  written
     request to the  Secretary of the Company and payment of the cost of copying
     such exhibit.

(b)  Reports on Form 8-K

     On  March  17,  1997,  the  Company  filed a  report  on Form  8-K with the
Securities and Exchange  Commission to report that, on February 28, 1997, it had
consummated the sale of 72.5 units of the Company  ("Units") at a purchase price
of $10,000 per Unit to twelve  foreign  investors.  Each Unit  consists of (i) a
$12,500 principal amount Convertible  Secured Loan Note Due 1999 of the Company,
and (ii) warrants to purchase 50,000 shares of common stock, $0.01 par value per
share.  Such  sale of Units  was  effected  pursuant  to an  exemption  from the
registration requirements of the Securities Act of 1933, as amended, pursuant to
Regulation S promulgated thereunder.



                                      -21-
<PAGE>



                                   SIGNATURES

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

                            PLASTIGONE TECHNOLOGIES, INC.


Date: May 12, 1997          By:         /s/ Ron Davis
                                        -------------
                                        Ron Davis
                                        President, Chief Executive Officer and
                                        Director

     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  registrant and in the capacities and on
May 12, 1997.



/s/ Duncan J.L. Fitzwilliams                                   
----------------------------    Chairman of the Board 
Duncan J.L. Fitzwilliams

/s/ Ron Davis                                
----------------------------    President, Chief Executive Officer and Director
Ron Davis

/s/ William E. Clegg III        Vice President & Chief Financial Officer
---------------------------     (Principal Financial and Accounting Officer)and
William E. Clegg III            Secretary


/s/ James H. Gellert           
---------------------------     Director
James H. Gellert


---------------------------     Director
 Avi Harpaz

/s/ Bruce Hausman
---------------------------     Director
Bruce Hausman




                                      -22-
<PAGE>



                                                    Commission File No. 0-18193





                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    EXHIBITS

                                       to

                          ANNUAL REPORT ON FORM 10-KSB

                CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                          PLASTIGONE TECHNOLOGIES, INC.






                                      -23-
<PAGE>



Exhibit
Number          Document                                           Page Number
------          --------                                           -----------

3.1  (1)        Articles of Incorporation (as amended)
3.2 (2)         By-Laws
4.1  (3)        Form of Convertible Secured Loan Note Due 1999.
4.2  (3)        Form of Regulation S Warrant.
10.1 (4) +      Incentive Stock Option Plan.
10.2 (5)        License Agreement.
10.3 (6)        Amendment to License Agreement dated January 2, 1990.
10.4 (6)        Agreements extending due date of promissory notes.
10.5 (6)        Fort Myers City Industrial Park Land Lease.
10.6 (6)        Lease of Apartment - Reflections Apartments.
10.7 (6) +      Ron Davis - Warrant to purchase common stock.
10.8 (7) +      Amended and Restated 1989 Stock Option Plan.
10.9 +          Employment Agreement dated August 1, 1996
                between Ron Davis and the Company.
27              Financial Data Schedule.
99.1 (3)        Placement Agency Agreement dated January 17,
                1997 by and between the Company and Oakes,
                Fitzwilliams & Co. Limited.
99.2 (3)        Form of Offshore Securities Purchase Agreement.
99.3 (3)        Form of Security Agreement dated February 21,
                1997 by and between the Company and Oakes,
                Fitzwilliams & Co. Limited, as representative of
                the investors in the Offering.

____________________

(1)  Incorporated  by  reference to Exhibits  3(a) and 3(b) of the  Registrant's
     Registration  Statement  on Form S-1,  File No.  33-29625 NY dated June 22,
     1989 (the "S-1 Registration Statement").

(2)  Incorporated by reference to Exhibit 3(a) of the Registrant's Annual Report
     on Form 10-K for the fiscal year ended December 31, 1990.

(3)  Incorporated by reference to the  correspondingly  numbered  exhibit to the
     Registrant's Report on Form 8-K filed on March 17, 1997.

(4)  Incorporated  by reference to Exhibit 10.1 of Amendment No. 1, dated August
     28, 1989, to the S-1 Registration Statement.

(5)  Incorporated  by  reference  to  Exhibit  10.3  of  the  S-1   Registration
     Statement.


                                      -24-
<PAGE>


(6)  Incorporated by reference to the  correspondingly  numbered  exhibit to the
     Registrant's  Annual  Report  on Form  10-KSB  for the  fiscal  year  ended
     December 31, 1994 as filed with the Securities  and Exchange  Commission on
     March 30, 1995.

(7)  Incorporated  by  reference  to Exhibit  14(a)(3)(28)  of the  Registrant's
     Annual Report on Form 10-K for the fiscal year ended December 31, 1989.

+    Management  contract or  compensatory  plan or  arrangement  required to be
     noted  as  provided  pursuant  to Item  13(a) of the  instructions  to Form
     10-KSB.

                                      -25-
<PAGE>



                          PLASTIGONE TECHNOLOGIES, INC.

                          INDEX TO FINANCIAL STATEMENTS


                                                              PAGE
                                                             NUMBER
                                                             ------

REPORT OF INDEPENDENT AUDITORS                                 F-2


BALANCE SHEET AS AT DECEMBER 31, 1995                          F-3


STATEMENTS OF OPERATIONS FOR EACH OF
THE YEARS IN THE TWO-YEAR PERIOD ENDED
DECEMBER 31, 1995                                              F-4


STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY (CAPITAL DEFICIENCY) FOR EACH OF
THE YEARS IN THE TWO-YEAR PERIOD ENDED
DECEMBER 31, 1995                                              F-5


STATEMENTS OF CASH FLOWS FOR EACH OF THE
YEARS IN THE TWO-YEAR PERIOD ENDED
DECEMBER 31, 1995                                              F-6


NOTES TO FINANCIAL STATEMENTS                                  F-7

                                       F-1

<PAGE>



                         REPORT OF INDEPENDENT AUDITORS



Board of Directors and Stockholders
Plastigone Technologies, Inc.


     We have audited the accompanying balance sheet of Plastigone  Technologies,
Inc. as at December 31, 1995, and the related statements of operations,  changes
in  shareholders'  equity  (capital  deficiency)  and cash flows for each of the
years in the two-year  period then ended.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

     We conducted  our audits in accordance  with  generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  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 financial  statements  enumerated above present fairly,
in all material  respects,  the financial  position of Plastigone  Technologies,
Inc. at December 31, 1995,  and the results of its operations and its cash flows
for  each of the  years  in the  two-year  period  ended  December  31,  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 A to the
financial  statements,  the Company  has  sustained  recurring  losses and has a
working  capital  deficiency  and a capital  deficiency  at December  31,  1995.
Further,  the Company is in default on its notes  payable.  These  issues  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
Management's  plans in regard to these matters are also described in Note A. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


/s/ Richard A. Eisner & Company, LLP
May 12, 1997

New York, New York
July 16, 1996

With respect to Note H[4]
August 1, 1996

With respect to Note I
December 12, 1996

With respect to Note L
April 8, 1997

                                       F-2

<PAGE>



                          PLASTIGONE TECHNOLOGIES, INC.

                                  BALANCE SHEET

                             AS AT DECEMBER 31, 1995

                                   A S S E T S
                                   -----------


Current assets:
   Cash . . . . . . . . . . . . . . . . . . . . . . . . . .    $    8,601
   Accounts receivable less allowance for doubtful
     accounts of $24,000 (Notes D, I and J) . . . . . . . .       265,387
   Inventories (Notes A[2], B and D). . . . . . . . . . . .       461,515
                                                              -----------

          Total current assets. . . . . . . . . . . . . . .       735,503

Property, plant and equipment, at cost, net of
   accumulated depreciation of $380,584
   (Notes A[3], C and D). . . . . . . . . . . . . . . . . .     1,578,158
License, at cost, less accumulated amortization of $10,000
   (Notes A[4] and H[1]). . . . . . . . . . . . . . . . . .        30,000
Other assets. . . . . . . . . . . . . . . . . . . . . . . .        19,451
                                                              -----------

          T O T A L . . . . . . . . . . . . . . . . . . . .   $ 2,363,112
                                                              ===========

                              L I A B I L I T I E S
                              ---------------------

Current liabilities:
   Due to shareholder (interest at 10%) . . . . . . . . . .   $    35,000
   Due to private placement agents (interest at 10%). . . .       194,000
   Current maturities of mortgage note (Note E) . . . . . .         9,790
   Notes payable (Note D) . . . . . . . . . . . . . . . . .       600,000
   Notes payable - vendors (interest from 10% to 12%) . . .       159,390
   Accounts payable . . . . . . . . . . . . . . . . . . . .       917,583
   Accrued expenses . . . . . . . . . . . . . . . . . . . .       236,453
   Accrued interest . . . . . . . . . . . . . . . . . . . .       226,826
                                                              -----------

          Total current liabilities . . . . . . . . . . . .     2,379,042
                                                              -----------

Mortgage note, less current maturities (Note E) . . . . . .       195,375
                                                              -----------

Commitments and contingencies (Notes H and I)

                               CAPITAL DEFICIENCY
                               ------------------
                                    (Note F)

Common stock, par value $.01 per share; authorized
   25,000,000 shares; 10,255,989 shares issued and
   outstanding. . . . . . . . . . . . . . . . . . . . . . .       102,560
Additional paid-in capital. . . . . . . . . . . . . . . . .     5,486,718
Accumulated (deficit) . . . . . . . . . . . . . . . . . . .    (5,800,583)
                                                             -------------

          Total capital deficiency. . . . . . . . . . . . .      (211,305)
                                                             -------------

          T O T A L . . . . . . . . . . . . . . . . . . . .  $ 2 ,363,112
                                                             ============
                                             
     Attention is  directed  to the  foregoing  accountants'  report  and to the
          accompanying notes to financial statements.

                                       F-3

<PAGE>



                          PLASTIGONE TECHNOLOGIES, INC.

                            STATEMENTS OF OPERATIONS


                                                            Year Ended
                                                           December 31,
                                                           ------------
                                                     1995               1994
                                                     ----               ----

Net revenues (Note K) . . . . . . . . . . . .     $2,220,749        $3,253,728


Cost of goods sold. . . . . . . . . . . . . .      1,928,276         2,428,644
                                                 -----------        ----------


Gross profit. . . . . . . . . . . . . . . . .        292,473           825,084
                                                 -----------        ----------


Costs and expenses:

   Research and development costs . . . . . .        256,032

   Selling, general and administrative. . . .        827,867           862,285

   Settlement expenses (Note I) . . . . . . .         20,000           126,346

   Interest (income). . . . . . . . . . . . .        (17,855)          (36,837)

   Interest expense . . . . . . . . . . . . .        120,646           134,018

   Other (income) . . . . . . . . . . . . . .         (6,756)           (2,150)
                                                 ------------       -----------

          T o t a l . . . . . . . . . . . . .      1,199,934         1,083,662
                                                 ------------      -----------


NET (LOSS). . . . . . . . . . . . . . . . . .    $  (907,461)       $ (258,578)
                                                 ============       ===========


Net (loss) per common share . . . . . . . . .       $(.09)             $(.03)
                                                    ======             ======


Weighted average number of common shares
   outstanding (Note A[5]). . . . . . . . . .      9,571,825         9,385,989
                                                  ==========        ==========


     Attention is  directed  to the  foregoing  accountants'  report  and to the
          accompanying notes to financial statements.

                                       F-4

<PAGE>



                          PLASTIGONE TECHNOLOGIES, INC.

       STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY)
                                    (Note F)



<TABLE>
<CAPTION>

                                                 Common Stock           Additional                        Stock
                                                 ------------            Paid-in        Accumulated    Subscription
                                            Shares        Amount         Capital         (Deficit)       Receivable          Total
                                            ------        ------         -------         ---------       ----------          -----

<S>                <C> <C>                  <C>          <C>            <C>             <C>              <C>             <C>      
Balance - December 31, 1993 . . . . . .     9,435,989    $ 94,360       $5,298,318      $(4,634,544)     $(20,000)       $ 738,134


Value assigned to warrants issued and
   other... . . . . . . . . . . . . . .                                      3,700                                           3,700


Cancellation of shares. . . . . . . . .      (50,000)       (500)         (19,500)                          20,000           - 0 -


Net (loss) for year . . . . . . . . . .                                                    (258,578)                     (258,578)
                                          -----------   ---------      -----------       -----------     ---------      ----------


Balance - December 31, 1994 . . . . . .     9,385,989      93,860        5,282,518       (4,893,122)         - 0 -         483,256


Value assigned to warrants issued . . .                                     10,465                                          10,465


Issuance of common stock, net of
   expenses of $15,065 (Note F[1]). . .       870,000       8,700          193,735                                         202,435

Net (loss) for year . . . . . . . . . .                                                    (907,461)                     (907,461)
                                          -----------   ---------      -----------       -----------     ---------      ----------



BALANCE - DECEMBER 31, 1995 . . . . . .   10,255,989    $102,560       $5,486,718       $(5,800,583)     $  - 0 -        $(211,305)
                                          ===========   =========      ===========      ============     =========      ==========
</TABLE>


     Attention is  directed  to the  foregoing  accountants'  report  and to the
          accompanying notes to financial statements. 

                                      F-5
<PAGE>



                          PLASTIGONE TECHNOLOGIES, INC.
                            STATEMENTS OF CASH FLOWS

                                                            Year Ended
                                                           December 31,
                                                           ------------
                                                       1995           1994
                                                       ----           ----

Cash flows from operating activities:
   Net (loss). . . . . . . . . . . . . . . . . .     $(907,461)      $(258,578)
   Adjustments to reconcile net (loss) to net
     cash (used in) operating activities:
       Depreciation and amortization . . . . . .        89,161          89,263
       Value assigned to warrants. . . . . . . .        10,465           3,700
       Amortization of debt costs. . . . . . . .                        11,667
       Accrued interest. . . . . . . . . . . . .        80,287          72,582
       Changes in operating assets and
         liabilities:
           Decrease (increase) in accounts
             receivable. . . . . . . . . . . . .       447,191        (116,401)
          (Increase) decrease in inventories . .       (46,910)        194,384
           Decrease (increase) in other current
             assets. . . . . . . . . . . . . . .        42,273         (17,274)
           Decrease in other assets. . . . . . .        10,849           4,630
           Increase (decrease) in accounts
             payable and accrued expenses. . . .       103,652         (67,383)
                                                     ----------      ----------

             Net cash (used in) operating
               activities. . . . . . . . . . . .      (170,493)        (83,410)
                                                     ----------      ----------

Cash flows from investing activities:
   Purchase of property, plant and equipment . .       (79,543)        (18,917)
                                                     ----------      ----------

Cash flows from financing activities:
   Loans from placement agent. . . . . . . . . .                         5,000
   Proceeds on short-term borrowings . . . . . .                        50,000
   Principal payments of long-term debt. . . . .                        (4,224)
   Proceeds from sale of common stock. . . . . .       202,435
                                                     ----------       ---------

             Net cash provided by financing
               activities. . . . . . . . . . . .       202,435          50,776
                                                    ----------       ---------


NET (DECREASE) IN CASH . . . . . . . . . . . . .       (47,601)        (51,551)
Cash - beginning of year . . . . . . . . . . . .        56,202         107,753
                                                    ----------        ---------
CASH - END OF YEAR . . . . . . . . . . . . . . .    $    8,601       $  56,202
                                                    ==========       ==========
Supplemental disclosure of cash flow
   information:
     Cash paid for interest. . . . . . . . . . .     $  21,924       $  60,623


     Attention is  directed  to the  foregoing  accountants'  report  and to the
          accompanying notes to financial statements. 

                                      F-6

<PAGE>


                          PLASTIGONE TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS

(NOTE A) - The Company and Summary of Significant Accounting Policies:
----------------------------------------------------------------------

     [1] The Company:
         -----------

         Plastigone  Technologies,  Inc. (the "Company") was incorporated in the
State of Florida on April 24, 1986. The Company  manufactures  and distributes a
line of photo activated  biodegradable  as well as  nondegradable  plastic film,
primarily to the agricultural  market.  It also distributes  degradable  compost
bags manufactured  with its additive and sells the degradable  additive to other
plastic manufacturers.

         The Company has incurred  substantial losses since inception and losses
have continued in 1996,  and as of December 31, 1995 has an accumulated  deficit
of $5,800,000  and a working  capital  deficiency of  approximately  $1,644,000.
Further,  $600,000 of notes  payable on August 1, 1995 and the notes  payable to
vendors were not paid when due and are  currently in default.  As a result,  the
note holders can  foreclose on  substantially  all the Company's  assets.  These
factors raise  substantial  doubt about the  Company's  ability to continue as a
going concern.

         As discussed in Note L, in 1996, the Company raised  $500,000 in equity
financing  and  settled  certain  payables  for less than the  carrying  amount.
However, the Company is in need of substantial  additional financing to continue
its  operations.  The  Company  is  attempting  to obtain  additional  long-term
financing but to date has been unable to  consummate  an agreement.  The Company
hopes to achieve  profitable  operations by reducing costs and increasing  sales
volume  through the  introduction  of new product  lines,  however,  there is no
assurance when or if such can be obtained.  Other alternative means of financing
are being  considered.  The financial  statements do not contain any adjustments
that might result from the outcome of these uncertainties.

     [2] Inventories:
         ----------- 

         Inventories  are valued at the lower of cost  (first-in,  first-out) or
market.

     [3] Equipment:
         ---------
         Equipment is stated at cost and depreciated over estimated useful lives
using the straight-line method.

     [4] License costs:
         -------------

         License costs are being amortized using the straight-line method over a
period of 20 years.


(continued)

                                       F-7


<PAGE>


                          PLASTIGONE TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS

(NOTE A) - The Company and Summary of Significant Accounting Policies:
----------------------------------------------------------------------
           (continued)

     [5] Net loss per common share:
         --------------------------

         Loss per common  share is  computed  by  dividing  the net loss for the
period by the weighted average number of common shares  outstanding.  The effect
of warrants and options outstanding would be anti-dilutive and, therefore,  have
not been included in the computation.

     [6] Recently issued accounting pronouncements:
         ------------------------------------------

         In October 1995, the Financial  Accounting  Standards Board issued SFAS
No. 123,  "Accounting for Stock-Based  Compensation"  which is effective for the
Company's fiscal year commencing  January 1, 1996. SFAS No. 123 allows companies
to  either  account  for  employee  stock-  based  compensation  under  the  new
provisions  of SFAS No. 123 or under the  provisions  of  Accounting  Principles
Board ("APB") Opinion No. 25, but requires pro forma disclosure in the footnotes
to the financial statements as if the measurement provisions of SFAS No. 123 had
been adopted.  At this time, the Company intends to continue  accounting for its
employee  stock-based  compensation  in  accordance  with the  provisions of APB
Opinion No. 25.

     [7] Use of 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.

     [8] Fair value of financial instruments:
         ------------------------------------

         The carrying value of cash,  accounts  receivable and accounts  payable
approximates the fair value because of the short maturity of those instruments.

         Due to the related  party nature of the notes  payable,  the Company is
unable to determine its fair value.


(continued)


                                       F-8

<PAGE>


                          PLASTIGONE TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS

(NOTE B) - Inventories:
-----------------------

            Inventories are summarized as follows:

                        Raw materials. . . . . . . . . . . .  $282,726
                        Finished goods . . . . . . . . . . .   178,789
                                                             ---------
 
                                  T o t a l. . . . . . . . .  $461,515
                                                             =========


(NOTE C) - Property, Plant and Equipment:
-----------------------------------------

            Property, plant and equipment are summarized as follows:

                        Land . . . . . . . . . . . . . . . .  $   50,000
                        Building and improvements. . . . . .     354,799
                        Machinery and equipment. . . . . . .   1,410,528
                        Furniture and fixtures . . . . . . .      86,341
                        Automobiles. . . . . . . . . . . . .      22,018
                        Computer equipment . . . . . . . . .      35,056
                                                              ----------
                                  T o t a l. . . . . . . . .   1,958,742

                        Less accumulated depreciation and
                           amortization. . . . . . . . . . .     380,584
                                                              ----------

                                  T o t a l. . . . . . . . .  $1,578,158
                                                              ==========


(NOTE D) - Notes Payable:
-------------------------

     Notes payable consist of loans from various investors and placement agents.
The notes bear interest at 10% per annum and the principal  balances and accrued
interest were due on August 1, 1995. The notes are  collateralized by a security
interest  in  the  Company's  inventory,  accounts  receivable,   machinery  and
equipment.

     The notes were not paid when due on August 1, 1995, and,  accordingly,  the
note holders can foreclose on the Company's  assets at any time.  See Note L for
conversion and repayment of debt.


(NOTE E) - Long-Term Debt:
--------------------------

    Mortgage collateralized by real estate,  interest at 10%, 
       payable in 10 semiannual  installments  of principal 
       and interest of $12,530 with a balloon  payment of 
       principal  and interest of $202,245 on
       October 15, 1997. . . . . . . . . . . . . . . . . . .  $205,165
    Less current maturity. . . . . . . . . . . . . . . . . . . . 9,790
                                                              --------

    Noncurrent portion . . . . . . . . . . . . . . . . . . .  $195,375
                                                             =========

(continued)


                                      F-9
<PAGE>


                          PLASTIGONE TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS


(NOTE F) - Capital Deficiency:
------------------------------

     [1] Private placements:
         -------------------

         During  1995 the  Company  sold 4.35  units in a private  placement  at
$50,000 per unit,  receiving net proceeds of approximately  $202,000.  Each unit
consisted  of 200,000  shares  and a warrant to  purchase  200,000  shares.  The
Company issued the placement agent a warrant to purchase 60,000 shares of common
stock at $.25 per share exercisable through June 1998. (Note F[2]).

     [2] Warrants:
         ---------

         The Company has the following warrants outstanding at December 31, 1995
for the purchase of its common stock:

                                   Shares/    Exercise     Expiration
                                   Units       Price         Date
                                   -----       -----         ----

     Public warrants. . .          2,170,000   $1.25    March 31, 1996 (A)
     Placement agent. . .            250,000     .40    June 29, 1997
     Issued with debt and
        services - 1992 .          1,025,000     .40    June 29, 1997
     Issued for services
        - 1993. . . . . .             25,000     .40    June 29, 1997
     Issued with debt
         - 1993/1994 . . .           300,000     .50    June 30, 1998
     Placement agent
         - 1993/1994 . . .            30,000     .50    June 30, 1998
     Issued to
         noteholders
         - 1994  . . . . .            24,000     .50    June 30, 1998
     Issued for
         services/1995 . .           300,000     .20    June 30, 1998 (B)
     Issued for
         services - 1995
         (Note F[1]) . . .            60,000     .25    June 30, 1998
     Private placement -
         1995 (Note F[1]).              4.35     .375    June 14, 1997
     Issued to
         noteholders
         - 1995. . . . . .           300,000     .25    August 31, 1997

     (A)  During  the  year  ended  December  31,  1995 the  Board of  Directors
          extended the expiration date from December 31, 1995.

     (B)  Warrants  issued to President of Company See Note H[4] for  additional
          warrants issued to President.

(continued)


                                      F-10

<PAGE>


                          PLASTIGONE TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS

(NOTE F) - Capital Deficiency:  (continued)
------------------------------ 

     [3] Stock Options:
         --------------

         The Company has a stock option plan (the "Plan") for key  employees and
key personnel  under which 500,000 shares of common stock have been reserved for
issuance pursuant to Plan. The Plan permits the granting of both incentive stock
options  ("ISOs")  and  nonincentive  options.  All stock  options  granted  are
exercisable at a price determined by the  administrative  committee of the Plan.
However,  the ISOs must not be less  than the fair  market  value of the  stock.
Under the Plan,  no option may be exercised  for six months from the date of the
grant,  nor may any option be granted  after June 30, 1999.  All options must be
exercised  within  ten years of the date of grant,  except  for ISOs  granted to
persons  owning more than 10% of the  Company's  outstanding  common stock which
then must be exercised within five years of the date of the grant and the option
price shall not be less than 110% of fair market value on the date of grant.

     A summary of incentive stock option transactions are as follows:

                                                          Number of
                               Number of                   Shares
                                Shares   Exercise Price  Exercisable
                                ------   --------------  -----------

Outstanding at December 31,
   1993 . . . . . . . . . . .   480,000  $ .75 - $2.50    415,000
                                                          =======

Granted . . . . . . . . . . .    25,000      $ .75
Cancelled . . . . . . . . . .  (175,000) $1.00 - $1.20
                               ---------

Outstanding at December 31,
   1994 . . . . . . . . . . .   330,000  $ .75 - $2.50    330,000
                                                          =======

Granted . . . . . . . . . . .   246,000  $ .25
Cancelled . . . . . . . . . .  (187,000) $ .25 - $2.50
                               ---------

Outstanding at December 31,
   1995 . . . . . . . . . . .   389,000  $ .25 - $1.09    389,000
                               =========                  =======

     As of December  31, 1995,  options for the purchase of 111,000  shares were
available for future grant under the Plan.

(continued)


                                      F-11

<PAGE>


                          PLASTIGONE TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS

(NOTE F) - Capital Deficiency:  (continued)
-----------------------------

     [3] Stock Options: (continued)
         -------------

         On  February  9, 1995 the  Company  granted  to  certain  officers  and
employees  options to purchase 189,000 shares of common stock at $.25 per share.
Previously  granted  options to purchase  105,000  shares with  exercise  prices
ranging from $.75 to $2.50 were cancelled.


(NOTE G) - Income Taxes:
------------------------

     At December  31,  1995,  the  Company  had  available  net  operating  loss
carryforwards  of  approximately  $5,844,000  for federal  and state  income tax
purposes  expiring  through 2010. The  utilization  of a significant  portion of
these losses may be subject to an annual limitation.

     Differences  between  loss for  financial  reporting  purposes and loss for
Federal  income tax  purposes  relate  primarily  to  depreciation  and  certain
expenses not currently deductible.

     At December 31, 1995, the Company has deferred tax assets of  approximately
$2,230,000  offset  by  deferred  tax  liabilities  of  approximately   $95,000,
resulting in net  deferred tax assets of  $2,135,000.  For  financial  reporting
purposes,  a valuation allowance of $2,135,000 has been recognized to offset net
deferred tax assets since the likelihood of realization of the benefit cannot be
established.  There was a net increase in valuation  allowance of  approximately
$391,000 and $240,000 during 1995 and 1994, respectively.


(NOTE H) - Commitments:
-----------------------

     [1] License agreements:
         -------------------

         The Company,  as licensee,  is a party to an agreement  with  Plastopil
Hazorea, Ltd.  ("Plastopil"),  an Israeli limited partnership,  as licensor. The
Company has the exclusive right to market,  license, or otherwise distribute the
Plastopil  technology and any products  emanating from or based on the Plastopil
technology in the United States, Canada, the Caribbean, Mexico and South America
and is required to purchase from  Plastopil all of the fine chemical used in the
production of photodegradable  plastics. The license agreement remains in effect
until May 5, 2016.

(continued)


                                      F-12

<PAGE>


                          PLASTIGONE TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS

(NOTE H) - Commitments:  (continued)
-----------------------

     [1] License agreements: (continued)
         ------------------

         During 1989,  the Company began  marketing a  nonagricultural  product,
Litterless  #221,  which is subject  to a profit  sharing  arrangement  with the
licensor under which net profits are shared equally.  Net profits, as defined in
the  agreement,  to be shared  during  the years  ended  December  31,  1995 and
December 31, 1994 were not material.

     [2] Leases:
         ------

         The Company is obligated for minimum annual  rentals,  under  operating
leases longer than one year for land,  automobiles and office equipment expiring
through 1998 as follows:

         Year Ending
         December 31,
         ------------

         1996. . . . . . . . . . . . .  $17,000
         1997. . . . . . . . . . . . .   11,000
         1998. . . . . . . . . . . . .    2,000
                                        -------
         
                   T o t a l . . . . .  $30,000
                                        =======

         Rent expense pursuant to operating leases was approximately $53,000 and
$44,000 for 1995 and 1994, respectively.

     [3] Other:
         -----

         Prior to December 31, 1990, the Company received approximately $130,000
in connection with a research grant.  Upon successful  completion of the product
research,  the Company is liable to make payments based on gross sales and other
marketing or commercial  exploitation of the product,  at rates specified in the
agreement, to a maximum of 150% of the funds actually provided. Research for the
project continues to be evaluated and there have been no sales of the product.

     [4] Employment agreement:
         --------------------

         On August 1, 1996 the  Company  entered  into a  three-year  employment
agreement (the  "Agreement") with the President for an annual salary of $135,000
plus an annual bonus as determined by the Board of Directors.  In addition,  the
President  is  entitled  to  receive  an  incentive  based on 5% of  annual  net
operating income, as defined.

(continued)


                                      F-13

<PAGE>


                          PLASTIGONE TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS

(NOTE H) - Commitments:  (continued)
----------------------- 

     [4] Employment agreement: (continued)
         --------------------

         In  conjunction  with the Agreement  the Company  granted the President
50,000  shares of common  stock and  warrants  to purchase  1,000,000  shares of
common stock at an exercise price of $.25 per share  (one-third vest immediately
and two-thirds  vest on January 2, 1997). In connection  therewith,  the Company
valued  the stock and  warrants  at  approximately  $103,000.  In the event that
during the term of the Agreement the Company acquires by merger or consolidation
all the assets of or a controlling  interest in another entity, the Company will
grant the President an additional 1,000,000 warrants to purchase common stock at
$.25 per share exercisable in three equal installments.


(NOTE I) - Litigation:
----------------------

     During 1993 the Company  settled  litigation  involving  claims against two
customers.  The claims  were  extinguished  by  dividing  a  $725,000  insurance
settlement  with the  customers  retaining  $650,000  and the Company  retaining
$75,000,  of which $50,000 was received in 1993.  In  connection  with the above
matter,  the  Company  has filed  claims  against  its  principal  supplier  for
defective merchandise and various breaches of contract. The supplier has brought
counter claims against the Company claiming amounts in excess of $1,000,000.

     On  December  12, 1996 the parties  entered  into a release and  settlement
agreement.  In connection therewith,  the supplier agreed to pay $325,000 to the
Company's insurer and the parties agreed to dismiss their respective claims.

     The Company is involved in several other  matters of litigation  and claims
with customers,  suppliers,  former  employees and others.  The outcome of these
matters are uncertain at this time and counsel is unable to render an opinion as
to their ultimate resolution.

     During  1995 and 1994 the  Company  decided  to settle  certain  litigation
matters. In connection  therewith the Company recorded a charge of approximately
$20,000 and $126,000 in 1995 and 1994, respectively.

(continued)


                                      F-14

<PAGE>


                          PLASTIGONE TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS

(NOTE J) - Concentration of Credit Risk:
----------------------------------------

     Financial  instruments  that  subject the Company to credit risk consist of
accounts  receivables  from  farmers  principally  located  on the West Coast of
Florida.  The Company  performs  ongoing credit  evaluation of its customers but
does not require collateral to support  receivables.  The Company establishes an
allowance for doubtful  accounts based upon the factors  surrounding  the credit
risk of specific customers and other information.


(NOTE K) - Significant Customer:
--------------------------------

     One customer  accounted for  approximately  14% and 13% of net revenues for
the year ended December 31, 1995 and December 31, 1994, respectively.


(NOTE L) - Subsequent Events:
-----------------------------

     In 1996 the  Company  sold 11 units at $50,000  per unit and  received  net
proceeds of approximately $528,000 after expenses. Each unit consists of 200,000
shares of common  stock and  200,000  warrants  exercisable  within  one year at
$.375 per share.

     Through August 1996 certain holders of notes agreed to convert principal of
$225,000 and interest of $155,570 (through August 31, 1996) into common stock at
$.25 per share subject to certain conditions. In connection therewith,  warrants
to purchase  1,126,672  shares of common stock at $.0375 were granted to certain
noteholders.  In  connection  therewith,  the  Company  will  record a change of
approximately  $56,000 representing the fair value of warrants at date of grant.
In May and July 1996, $275,000 of notes payable were repaid (see Note D).

     In April and August 1996, the Company  entered into agreements with certain
vendors whereby amounts owed of $142,300 were settled for $80,000.

     In 1997 the  Company  sold 100 units at a price of $10,000  per unit.  Each
unit  consist  of a $12,500  convertible  collateralized  loan and  warrants  to
purchase  50,000 shares of common stock.  Each note is  convertible  into common
stock commencing  August 21, 1997 through January 31, 1999 (due date of note) at
the  holders  option at a  conversion  price of $.125 per  share.  The notes are
collateralized by the Company's machines,  equipment and furniture and fixtures.
The warrants are exercisable  from August 21, 1997 through  February 21, 2002 at
an exercise price equal to the average five days trading price prior to exercise
less 40%, however in no event less than $.10 per share. In connection therewith,
the Company granted the placement agent 20 units.

(continued)


                                      F-15

<PAGE>


                          PLASTIGONE TECHNOLOGIES, INC.

                          NOTES TO FINANCIAL STATEMENTS

(NOTE M) - Fourth Quarter Transactions and adjustments (Unaudited):
-------------------------------------------------------------------

     During  the  fourth  quarter  of fiscal  1995,  the  Company  made  various
adjustments  to accounts  receivable,  inventory,  payables,  accruals and notes
payable aggregating  approximately  $295,000.  The effect of such adjustments on
the first three quarters of the year has not been determined.

                                      F-22