U.S. SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
                                    ------------


                                     FORM 10-KSB
                                    ------------


              [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934
                     For the fiscal year ended December 31, 1996

                                         OR

            [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934
                          Commission file number 33-23429-D
                                     ------------


                                  NIGHTINGALE, INC.
             (Name of Small Business Issuer as specified in its charter)
    
            
                  Utah                                 87-044988-8
             ------------                              ------------
     (State or other jurisdiction of                (I.R.S. employer
      incorporation or organization)                 identification No.)
          2232 Eastwood Blvd.                              84403
           Ogden, Utah 84403                             (Zip Code)
 (Address of principal executive offices)

           Issuer's telephone number, including area code:  (801) 479-0742
                                  ------------


     Securities registered pursuant to Section 12(b) of the Exchange Act:  None

     Securities registered pursuant to Section 12(g) of the Exchange Act:  None


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

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained, to the best of Issuer'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. X

     The  Issuer's  revenues  for the fiscal year ending  December 31, 1996 were
$9,661.

      As of the date  hereof,  there is no public  market  for the  Registrant's
securities.  The Registrant has closed its public offering but, pursuant to Rule
164-11-1 as promulgated by the Utah Securities  Division,  no securities sold in
the public  offering have been issued.  The number of shares  outstanding of the
Registrant's  sole class of common  stock,  as of December 31,  1996,  and as of
April 9, 1997, is 1,000,000 shares.

                     DOCUMENTS INCORPORATED BY REFERENCE:  NONE







<PAGE>



                                    PART I

ITEM 1.  DESCRIPTION OF BUSINESS

General

      Nightingale,  Inc. (the 'Company") was formed for the purpose of investing
in any and all types of assets,  properties and  businesses.  The Company issued
1,000,000  shares of its Common Stock to its officers,  directors and others for
the  aggregate  sum of  $20,600.  On  September  28,  1988,  the  United  States
Securities  and Exchange  Commission  granted  effectiveness  to a  Registration
Statement on Form S-18, filed by the Company. The Registration Statement was for
an offering of  2,000,000  Units of Common  Stock and Warrants at $.10 per Unit.
Each Unit  consisted  of one share of Common  Stock,  one Class "A" Common Stock
Purchase Warrant and one Class "B" Common Stock Purchase  Warrant.  The offering
was a "blind pool" or "blank check" offering.

      The offering was closed on October 6, 1989.  All  2,000,000  Units offered
were  subscribed  for and a total of $200,000 was  deposited  into the Company's
Escrow  Account.  The offering was  registered for sale in the State of Utah and
therefore,  the Company  was and is  required  to comply  with Rule  164-11-1 as
promulgated by the Utah Securities Division. Such Rule prohibits the issuance of
shares, the secondary trading of the Company's securities and the expenditure of
more  than  20  percent  of the  net  offering  proceeds  without  first  giving
subscribers a rescission offering in connection with an acquisition.

      Since the close of its offering, the Company has been attempting to locate
potential  business  acquisitions   ("Potential  Business   Acquisitions")  from
investors,  promoters,  finders,  entrepreneurs or others. A Potential  Business
Acquisition  may be a  concept  which  has not yet  been  placed  in  commercial
operation,  which has recently commenced operations and is in need of additional
funds for expansion  into new products or markets,  or an  established  business
which may be experiencing  financial or operating difficulties and is in need of
the limited additional capital the Company could provide.

      In some  instances,  a  Potential  Business  Acquisition  may  involve the
acquisition  of or merger  with a  corporation  which does not need  substantial
additional  cash but which desires to establish a public  trading market for its
common stock. Some Potential  Business  Acquisitions may seek to become a public
company  through  merging with,  being acquired by or selling their assets to an
existing   public   company.   There  are  numerous   reasons  why  an  existing
privately-held company would seek to become a public company through a merger or
acquisition  rather than doing its own public  offering.  Such  reasons  include
avoiding the time delays involved in a public offering; retaining a larger share
of voting  control  of the  publicly-held  company;  reducing  the cost  factors
incurred in becoming a public  company;  and avoiding any dilution  requirements
set forth under various states' blue sky laws.

      The Company does not propose to restrict its search for Potential Business
Acquisitions  to any particular  industry or any particular  geographic area and
may, therefore,  engage in essentially any business to the extent of its limited
resources.


                                      2

<PAGE>



      It is anticipated that knowledge of Potential  Business  Acquisitions will
be made known to the Company by various  sources,  including  its  officers  and
directors,   shareholders,   professional   advisors   such  as  attorneys   and
accountants,  securities  broker-dealers,  venture  capitalists,  members of the
financial  community,  and  others who may  present  unsolicited  proposals.  In
certain  circumstances,  the  Company  may  agree  to pay a  finder's  fee or to
otherwise  compensate  such  persons for services  rendered in bringing  about a
transaction.  However,  no cash finder's fee or other  compensation which may be
paid to such persons for services  rendered in bringing  about a transaction  is
subject to future negotiation between the Company, the entity to be acquired and
the finder.

      The Company is not  currently a party to any binding  agreement to acquire
or merge with any  company.  The  Company's  management  is  continuing  to seek
suitable  acquisition  candidates.  However,  there can be no assurance  that an
acquisition or merger will be effected.

Rule 164-11-1 As Promulgated by the Utah Securities Division

      The offering was registered for sale in several states including the State
of Utah. Therefore,  the offering and the Company were, and are, subject to Rule
164-11-1  as  promulgated  by the Utah  Securities  Division.  Rule  164-11-1 is
applicable  to  offerings  in  which  eighty  percent  (80%)  or more of the net
offering  proceeds  are not  specifically  allocated.  Following  the  close  of
offerings subject to Rule 164-11-1, a company subject to the Rule is required to
maintain a minimum of eighty  percent  (80%) of the net offering  proceeds in an
escrow  account  until  such  time as it can  specifically  allocate  the use of
proceeds.  At such time as the offering proceeds can be specifically  allocated,
the Company must file additional  information with the Utah Securities  Division
disclosing  the use of proceeds and deliver such  information  to the  investors
purchasing shares in the offering.

      At the  time  that  the  additional  documentation  concerning  the use of
proceeds is filed with the Utah Securities Division, Rule 164-11-1 requires that
investors  in the  offering  be given no less than twenty (20) days to ratify or
rescind his or her investment. Investors who elect to rescind the purchase shall
receive a pro rata refund of all available  offering proceeds.  However,  should
enough  investors  request a refund  such that net  tangible  asset value of the
Company  after the refund would be less than  $75,000,  the Company will offer a
pro rata refund of all unused  offering  proceeds to  investors.  Therefore,  if
sufficient numbers of investors elect to rescind, it is possible that rescinding
investors will not receive 100% of the amount invested. A company subject to the
Rule is entitled to use a substantial portion of the gross offering proceeds for
underwriting  commissions,  offering  expenses and operating costs regardless of
investors' rescission rights.

      Rule 164-11-1 also prohibits the issuance of  securities,  the delivery of
stock  certificates  or the secondary  trading of the Company's  stock until the
offering proceeds have been released to the Company subsequent to the rescission
offering.

      The  Company  is  required  to  file  a  post-effective  amendment  to its
Registration  Statement  on file with the  Securities  and  Exchange  Commission
setting forth  current  information  before  soliciting  shareholders  regarding
rights to rescission.


                                      3

<PAGE>



      The  Company  received a total of  $200,000  from the sale of Units of its
securities in its public offering. The Company deposited 80% of the net offering
proceeds,  or $140,000,  in an escrow account pending  compliance with Utah Rule
164-11-1.  As of December  31,  1996,  a total of $201,103  was held in the Rule
164-11-1 Escrow Account.

Selection of Opportunities

      The analysis of new business opportunities has been and will be undertaken
by or under the  supervision  of the officers and  directors of the Company with
assistance from the Company's shareholders,  with none of whom is a professional
business analyst or has any previous training or experience in business analysis
or in selecting or hiring business analysts.  The Company has, since the date of
the  closing  of  its  public   offering,   considered   potential   acquisition
transactions with several companies but as of this date has not entered into any
definitive agreement with any party. The Company has unrestricted flexibility in
seeking, analyzing and participating in Potential Business Acquisitions.  In its
efforts to analyze potential  acquisition targets, the Company will consider the
following kinds of factors:

      (a)   Potential for growth, indicated by new technology, anticipated 
            market expansion or new products;

      (b)   Competitive  position as compared to other firms of similar size and
            experience  within  the  industry  segment  as  well as  within  the
            industry as a whole;

      (c)   Strength and diversity of management, either in place or scheduled 
            for recruitment;

      (d)   Capital requirements and anticipated  availability of required funds
            to be provided by the Company or from  operations,  through the sale
            of  additional   securities,   through  joint  ventures  or  similar
            arrangements or from other sources;

      (e)   The cost of participation by the Company as compared to the 
            perceived tangible and intangible values and potentials;

      (f)   The extent to which the business opportunity can be advanced;

      (g)   The accessibility of required management expertise, personnel, raw 
            materials, services, professional assistance and other required
            items; and

      (h)   Other relevant factors.

      In applying the foregoing  criteria,  no one of which will be controlling,
management  will  attempt to analyze all factors  and  circumstances  and make a
determination based upon reasonable  investigative  measures and available data.
Potentially  available  business  opportunities  may  occur  in  many  different
industries  and at  various  stages of  development,  all of which will make the
tasks of comparative  investigation and analysis of such business  opportunities
extremely difficult and complex.  Due to the Company's limited capital available
for investigation and management's limited

                                      4

<PAGE>



experience  in business  analysis,  the Company may not  discover or  adequately
evaluate adverse facts about the opportunity to be acquired.

Form of Acquisition

      The manner in which the Company participates in an opportunity will depend
upon the nature of the  opportunity,  the  respective  needs and  desires of the
Company and the  promoters  of the  opportunity,  and the  relative  negotiating
strength of the Company and such promoters.

      It is likely that the Company will acquire its participation in a business
opportunity  through the  issuance of common  stock or other  securities  of the
Company.  Although the terms of any such  transaction  cannot be  predicted,  it
should be noted that in  certain  circumstances  the  criteria  for  determining
whether or not an  acquisition is a so-called  "tax free"  reorganization  under
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended, depends upon
the issuance to the  shareholders of the acquired company of at least 80 percent
common stock of the combined entities immediately  following the reorganization.
If a transaction  were structured to take advantage of these  provisions  rather
than other "tax free"  provisions  provided under the Internal Revenue Code, all
prior shareholders  would in such circumstances  retain 20% or less of the total
issued and  outstanding  shares.  This could  result in  substantial  additional
dilution to the equity of those who were  shareholders  of the Company  prior to
such reorganization.

      The present  shareholders of the Company will likely not have control of a
majority  of  the  voting  shares  of the  Company  following  a  reorganization
transaction.  As part of such a transaction,  all or a majority of the Company's
directors  may resign and new  directors  may be  appointed  without any vote by
shareholders.

      In the case of an acquisition,  the  transaction may be accomplished  upon
the  sole   determination  of  management   without  any  vote  or  approval  by
shareholders. In the case of a statutory merger or consolidation, it will likely
be  necessary  to call a  shareholder's  meeting and obtain the  approval of the
holders of a majority of the outstanding shares. The necessity of obtaining such
shareholder  approval  may  result  in  delay  and  additional  expense  in  the
consummation  of any  proposed  transaction  and will also give rise to  certain
appraisal rights to dissenting shareholders.  Most likely,  management will seek
to structure any such transaction so as not to require shareholder approval.

      It  is   anticipated   that  the   investigation   of  specific   business
opportunities   and  the   negotiation,   drafting  and  execution  of  relevant
agreements,  disclosure documents and other instruments will require substantial
management time and attention and substantial  costs for accountants,  attorneys
and others.  If a decision  is made not to  participate  in a specific  business
opportunity,  the costs theretofore incurred in the related  investigation would
not be  recoverable.  Furthermore,  even  if an  agreement  is  reached  for the
participation in a specific business opportunity, the failure to consummate that
transaction may result in the loss to the Company of the related costs incurred.


                                      5

<PAGE>




Employees

      The Company currently has no employees.

ITEM 2.  DESCRIPTION OF PROPERTY

      The  executive  offices  of the  Company  are  presently  located  at 2232
Eastwood Blvd., Ogden, Utah 84403, the home of the President of the Company. The
Company  does  not  pay  rent  for the use of  such  facilities.  The  Company's
executive  offices are sufficient for the present purposes of the Company.  Upon
the consummation of an acquisition or merger,  the Company's offices will likely
be moved to the  principal  offices of the  company  acquired  or with which the
Company is merged.

ITEM 3.  LEGAL PROCEEDINGS

      There are not presently any material  pending legal  proceedings  to which
the  Company  is a  party  or of  which  any of  its  property  or  wholly-owned
subsidiaries  is subject and no such  proceedings are known to the Company to be
threatened or contemplated against it.

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

      No meetings of the Company's shareholders were held during the fiscal year
ending December 31, 1996

                                    PART II

ITEM 5.  MARKET FOR THE Company'S COMMON STOCK AND WARRANTS AND RELATED
         SECURITY HOLDER MATTERS

Market for Common Stock. There is no public market for the Company's securities.

      Holders.  The number of record holders of the Company's common stock as of
December 31, 1996 and April 9, 1997,  is 4. Pursuant to Rule 164-11-1 as adopted
by the Utah  Securities  Division,  no  securities of the Company were issued to
purchasers of the Units of Company offered in the public offering.

      Dividends.  The Company has not paid any cash  dividends  to date and does
not anticipate or contemplate paying dividends in the foreseeable  future. It is
the present  intention  of  management  to utilize all  available  funds for the
development of the Company's business.

      Warrants.  A total of 2,000,000  Units of the Company's  Common Stock were
subscribed  for in the Company's  public  offering.  Each Unit  consisted of one
share of Common  Stock,  $.001 par value,  and one "A" Warrant to  purchase  one
share of Common Stock at $.25 per share exercisable during a twelve month period
commencing 30 days from the date of the closing of the offering, and

                                      6

<PAGE>



ending  twelve months  thereafter,  and one "B" Warrant to purchase one share of
Common  Stock at $.50 per share  exercisable  during an  eighteen  month  period
commencing  30 days  from  the  date of the  close of the  offering  and  ending
eighteen months  thereafter.  The offering was closed on September 28, 1989. The
Warrants have been extended on several  occasions and now expire on December 31,
1997. The Warrants cannot be exercised unless a current  Registration  Statement
is in effect,  of which there can be no assurance.  The Company has the right to
call the  Warrants  for  redemption,  in whole  or in part,  upon 30 days  prior
written  notice at a price of $.001 per Warrant.  If the Warrants are called for
redemption,  they may be exercised at any time prior to the close of business on
the day preceding the date fixed for  redemption.  Any rights to purchase Common
Stock  subject to the Warrants will be forfeited to the extent such Warrants are
not  exercised  prior to such date.  The Common Stock and Warrants sold as Units
pursuant to this  offering are not  transferable  separately  until the exercise
period commences.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS

      The Company was formed for the purpose of  investing  in any and all types
of assets, properties and businesses. The Company issued 1,000,000 shares to its
officers and directors for the aggregate sum of $20,600.  On September 28, 1988,
the United States Securities and Exchange Commission granted  effectiveness to a
Registration Statement on Form S-18, filed by the Company in the Denver Regional
Office.  The  Registration  Statement was for an offering of 2,000,000  Units of
Common Stock and Warrants to purchase  shares of Common Stock, at $.10 per Unit.
The offering was a "blind pool"  offering.  The Company sold all 2,000,000 Units
offered  in its  public  offering.  Inasmuch  as the  Company is subject to Rule
164-11-1 as promulgated by the Utah Securities Division,  the exact net offering
proceeds  which will be available to the Company is not presently  determinable.
The gross offering proceeds were $200,000. Pursuant to Rule 164-11-1 the Company
was  required to escrow 80% of the net  offering  proceeds  or $140,000  pending
further  compliance  with the  Rule.  The  Company  is  required  to  offer  its
subscribers an opportunity to rescind their  purchases  before such proceeds may
be used. If sufficient subscribers elect to rescind, such that less than $75,000
will remain in the escrow account,  all purchases of the Units will be rescinded
and no shares will be issued.  In such event,  the  Company's  subscribers  will
receive the remaining offering proceeds on a pro-rata basis.

      The Plan of  Operation  of the Company is further  described  in Item 1 of
this Form 10-KSB.

Liquidity and Capital Resources

      Presently, the Company's assets consist solely of a minimal amount of cash
from its initial  capitalization  less amounts  expended for offering  costs and
operations  to date.  As of December 31,  1996,  the Company had total assets of
$201,328 which included $201,103 of restricted cash. Therefore,  the Company had
essentially  no usable cash as of December 31, 1996 and is dependent  upon loans
and advances from its management and affiliates to fund its expenses pending the
completion  of an merger or  acquisition.  As of December 31, 1996,  the Company
owed  affiliates  $125,942.  As a result of the  Company's  lack of  liquid  and
useable capital, the company's affiliaes

                                      7

<PAGE>



have  loaned  money to the  Company on an as needed  basis to fund  professional
fees, filing fees, travel costs and other costs of the Company.  There can be no
assurance  that the  Company's  affiliates  will  continue  to loan money to the
Company for its expenses.

Results of Operations

      The Company has not commenced any active operations as of the date hereof,
except for its search for suitable acquisition candidates.  The Company's assets
consist  primarily  of  cash,  which  is  on  deposit  in  interest-bearing  and
non-interest  bearing accounts.  The only revenue generated by the Company since
its  inception  is interest.  The Company had interest  income of $9,661 for the
year ending December 31, 1996 compared with total interest income of $10,142 for
the year ending  December 31, 1995.  Total expenses for the year ending December
31, 1996, were $17,861 as compared with $18,272 for the year ending December 31,
1995.  The  Company's   expenses  consist   primarily  of  travel  expenses  and
professional fees incurred in connection with proposed acquisitions. The Company
had a net loss of $8,200 for the year ending  December 31, 1996  compared with a
loss of $8.131 for the year ending December 31, 1995.

Inflation

      The Company does not believe that  inflation  will  negatively  impact its
business plans.


ITEM 7.  FINANCIAL STATEMENTS

                         Index to Financial Statements

Financial Statements

      Independent Accountants' Report - 1996

      Balance Sheet
        December 31, 1996

      Statement of Operations
        Years ended December 31, 1996 and 1995

      Statement of Changes in Stockholders' Deficit
        From Inception January 9, 1988 through December 31, 1996

      Statement of Cash Flows -
        Years ended December 31, 1996 and 1995

      Notes to Financial Statements


                                      8

<PAGE>




Financial Statement Schedules

      All schedules are omitted  because they are not applicable or the required
information is shown in the financial statements or notes thereto.



                                      9

<PAGE>



                         INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Stockholders of Nightingale, Inc.


We  have  audited  the  accompanying  balance  sheet  of  Nightingale,  Inc.  (a
development  stage company) as of December 31, 1996, and the related  statements
of operations, stockholders' deficit and cash flows for the two years then ended
and cumulative amounts from January 9, 1988 (date of inception) through December
31, 1996.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our 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  referred to above present fairly, in
all  material  respects,   the  financial  position  of  Nightingale,   Inc.  (a
development  stage  company) as of  December  31,  1996,  and the results of its
operations  and its cash  flows for the two  years  then  ended  and  cumulative
amounts from January 9, 1988 (date of inception)  through  December 31, 1996, 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 6 to the
financial  statements,  the Company  has  suffered  recurring  losses that raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these  matters are also  described  in note 6. The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.


                                    TANNER + COMPANY

Salt Lake City, Utah
February 28, 1997

                                      10

<PAGE>


                           NIGHTINGALE, INC.
                     (A Development Stage Company)
                   Statement of Stockholders' Deficit
                               Continued


                                                           Balance Sheet

                                                       December 31, 1996
------------------------------------------------------------------------------






         Assets

Current assets:
   Cash                                                     $        225
   Restricted cash held in escrow                                201,103
                                                            ------------

            Total current assets                            $    201,328
                                                            ------------

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

                                                            ------------
         Liabilities and Stockholders' Deficit

Current liabilities:
   Accounts payable and accrued liabilities                 $        569
   Advances from related parties                                 125,942
   Common stock units subscribed                                 177,017
                                                            ------------

            Total current liabilities                            303,528

Stockholders' deficit:
   Common stock - par value $.001 per share.
     Authorized 100,000,000 shares; issued and
     outstanding 1,000,000 shares                                  1,000
   Additional paid-in capital                                     19,600
   Deficit accumulated during the development stage             (122,800)
                                                            ------------

            Total stockholders' deficit                         (102,200)
                                                            ------------

            Total liabilities and stockholders' deficit     $    201,328
                                                            ------------



------------------------------------------------------------------------------
See accompanying notes to financial statements.

                                   11

<PAGE>


                           NIGHTINGALE, INC.
                     (A Development Stage Company)
                   Statement of Stockholders' Deficit
                               Continued


                         Statement of Operations

             Years Ended December 31, and Cumulative Amounts
------------------------------------------------------------------------------






                                                             Cumulative
                                                              Amounts
                                        1996        1995        from
                                                             Inception
                                    ------------------------------------

Revenues - interest                 $      9,661$     10,142$     65,365

General and administrative expenses       17,861      18,273     188,165
                                    ------------------------------------

   Loss before income taxes               (8,200)     (8,131)   (122,800)

Income taxes                                   -           -           -
                                    ------------------------------------

   Net loss                         $     (8,200)$    (8,131)$  (122,800)
                                    ------------------------------------

Loss per share                      $      (.01)      $ (.01)    $  (.13)


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

Weighted average shares                1,000,000   1,000,000     974,000
                                    ------------------------------------





------------------------------------------------------------------------------
See accompanying notes to financial statements.

                                   12

<PAGE>


                           NIGHTINGALE, INC.
                     (A Development Stage Company)
                   Statement of Stockholders' Deficit
                               Continued


                   Statement of Stockholders' Deficit
      January 9, 1988 (Date of Inception) Through December 31, 1996
------------------------------------------------------------------------------


                                                       Deficit
                                                        Accum-
                          Common Stock                  ulated
                                                       During the
                     ---------------------- Additional Develop-
                      Number of              Paid-In     ment
                       Shares    Par Value   Capital     Stage      Total
                                      
                     ------------------------------------------------------
Balance,
January 9, 1988           -     $    -      $    -     $    -     $    -      

Common stock issued
for cash at $.02 per
share                  20,000        20         380         -         400

Common stock issued
for services at $.12
per share               5,000         5         595         -         600

Common stock issued
for cash at $.02 per
share                 975,000        975     18,625         -      19,600

Net loss                  -           -          -     (1,534)    (1,534)
                  ------------------------------------------------------

Balance,
December 31, 1988   1,000,000      1,000     19,600     (1,534)   19,066

Net loss                  -           -          -     (3,842)   (3,842)
                  ------------------------------------------------------

Balance,
December 31, 1989   1,000,000      1,000     19,600     (5,376)   15,224

Net loss                  -           -          -     (10,018)  (10,018)
                  ------------------------------------------------------

Balance,
December 31, 1990   1,000,000      1,000     19,600    (15,394)    5,206

Net loss                    -          -          -     (1,494)   (1,494)
                  ------------------------------------------------------




------------------------------------------------------------------------------
See accompanying notes to financial statements.

                                   13

<PAGE>


                           NIGHTINGALE, INC.
                     (A Development Stage Company)
                   Statement of Stockholders' Deficit
                               Continued

                          Common Stock                    Deficit
                      ______________________  Additional  Accumulated
                      Number of                Paid-In    During the
                       Shares      Par Value   Capital    Development   Total
                                                            Stage
                     __________________________________________________________

   Balance,
   December 31, 1991  1,000,000      1,000     19,600      (16,888)     3,712

   Net loss                   -          -          -      (25,203)   (25,203)
                    ----------------------------------------------------------

  Balance,
  December 31, 1992   1,000,000      1,000     19,600      (42,091)   (21,491)

  Net loss                    -          -          -      (46,300)   (46,300)
                    ----------------------------------------------------------

  Balance,
  December 31, 1993   1,000,000      1,000     19,600      (88,391)   (67,791)

  Net loss                    -          -          -      (18,078)   (18,078)
                    ----------------------------------------------------------

  Balance,
  December 31, 1994   1,000,000      1,000     19,600     (106,469)   (85,869)

  Net loss                    -          -          -       (8,131)    (8,131)
                    ----------------------------------------------------------

  Balance,
  December 31, 1995   1,000,000      1,000     19,600     (114,600)   (94,000)

  Net loss                    -          -          -       (8,200)    (8,200)
                    ----------------------------------------------------------

  Balance,            1,000,000   $1,000,000  $19,600     $(122,800) $(102,200)
December 31, 1996
                    ----------------------------------------------------------





------------------------------------------------------------------------------
See accompanying notes to financial statements.

                                   14

<PAGE>


                           NIGHTINGALE, INC.
                     (A Development Stage Company)
                   Statement of Stockholders' Deficit
                               Continued


                         Statement of Cash Flows

             Years Ended December 31, and Cumulative Amounts
------------------------------------------------------------------------------





                                                                    Cumulative
                                                                     Amounts
                                                                      from
                                               1996        1995     Inception
                                             ----------------------------------
Cash flows from operating activities:
   Net loss                                 $ (8,200)    $ (8,131)  $ (122,800)
   Adjustments to reconcile net loss to
     net cash used in operating activities:
      Amortization                              -           -           1,350
      Increase (decrease) in accounts
        payable and accrued liabilities        (667)     9,780         19,039
                                             ----------------------------------
            Net cash provided by (used in)
            operating activities              (8,867)    1,649       (102,411)
                                             ----------------------------------

Cash flows from investing activities:
   Increase in advances from related parties  18,413     8,401         107,472
   Increase in restricted cash held in escr   (9,661)  (10,142)       (201,103)
   Increase in organization costs               -           -           (1,350)
                                      -----------------------------------------
            Net cash provided by (used in)
            investing activities               8,752    (1,741)        (94,981)
                                      -----------------------------------------

Cash flows from financing activities:
   Proceeds from commons stock units
     subscribed                                 -           -         200,000
   Increase in offering costs                   -           -         (22,983)
   Proceeds from issuance of common stock       -           -          20,600
                                      ----------------------------------------
            Net cash provided by
            financing activities                -           -         197,617
                                      ----------------------------------------

            Net increase (decrease) in cash  (115)        (92)          225



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


See accompanying notes to financial statements.
                                   15

<PAGE>


                           NIGHTINGALE, INC.
                     (A Development Stage Company)
                   Statement of Stockholders' Deficit
                               Continued


                                                             Cumulative
                                                               Amounts
                                                                from
                                         1996        1995     Inception
                                      ----------------------------------
Cash, beginning of period                 340         432          -
                                      ----------------------------------

Cash, end of period                   $   225      $  340      $  225
                                      ----------------------------------




------------------------------------------------------------------------------
See accompanying notes to financial statements.

                                   16

<PAGE>


                           NIGHTINGALE, INC.
                     (A Development Stage Company)
                   Statement of Stockholders' Deficit
                               Continued


                         Statement of Cash Flows
                                                               Continued

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





Supplemental disclosure of cash flow information:


                                                             Cumulative
                                                               Amounts
                                                                from
                                         1996        1995     Inception
                                      ----------------------------------

         Interest paid                $           $     -    $   9,213
                                      ----------------------------------

         Income taxes paid            $   120     $    357   $     692
                                      ----------------------------------






------------------------------------------------------------------------------
See accompanying notes to financial statements.

                                   17

<PAGE>


                           NIGHTINGALE, INC.
                     (A Development Stage Company)
                   Statement of Stockholders' Deficit
                               Continued


                      Notes to Financial Statements

                            December 31, 1996
------------------------------------------------------------------------------



1.  Organization

The Company filed articles of  incorporation  October 8, 1987 to purchase,  sell
and invest in new products, technologies and businesses of any and all types and
kinds.  However,  the Company was not legally  organized  until  January 9, 1988
(date of  inception)  when  $1,000  of  total  consideration  was paid  into the
Company.  The Company has not  commenced  planned  principle  operations  and is
considered  a  development  stage  company as defined in SFAS No. 7. The Company
has, at the present time,  not paid any dividends and any dividends  that may be
paid in the future will depend upon the  financial  requirements  of the Company
and other relevant factors.


2. Significant Accounting Principles

Cash and Cash Equivalents

For purposes of the  statement of cash flows,  the Company  considers all highly
liquid  debt  instruments  with a  maturity  of three  months or less to be cash
equivalents.


Income (Loss) Per Common Share

Income  (loss) per share of common  stock is  calculated  based on the  weighted
average number of shares outstanding during the period. Common stock equivalents
are excluded from the calculation when they would be antidilutive.


Use of Estimates in the Preparation of Financial Statements 

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
reporting period. Actual results could differ from those estimates.



                                   18

<PAGE>


                                  NIGHTINGALE, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                                               Continued

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




Concentration of Credit Risk

The Company  maintains its cash in bank deposit  accounts which,  at times,  may
exceed federally  insured limits.  The Company has not experienced any losses in
such  account and believes it is not exposed to any  significant  credit risk on
cash and cash equivalents.


3. Common Stock Units Subscribed and Restricted Cash

The  Company  has closed but not  completed  a public  offering  on Form S-18 in
accordance  with the Securities  Act of 1933 of 2,000,000  units as of September
1989.  Each unit  consists of one share of the Company's  common stock,  one "A"
warrant and one "B" warrant.  Each "A" warrant allows the holder to purchase one
share of the Company's common stock at a price of $.25 per share of common stock
beginning thirty days after the close of this offering.  Each "B" warrant allows
the holder to purchase  one share of the  Company's  common  stock at a price of
$.50 per share  beginning  thirty days after the close of this offering.  During
1995, the Company  extended the expiration date of both the "A" warrants and "B"
warrants to December 31, 1996.  Under terms of the offering,  the Company placed
in escrow $140,000 which approximated 80% of the net offering proceeds. The cash
will remain in escrow until the Company can specifically allocate the use of the
proceeds.  At the  time  of the  allocation  of the  proceeds  a  post-effective
amendment  will be  filed.  At the  time of the  post-effective  amendment,  the
investors  in the  common  stock  units must be given  twenty  days to ratify or
rescind their investment.  Investors who choose to rescind their investment will
receive a pro rata  refund of all  offering  proceeds.  However,  should  enough
investors request a refund such that the net tangible asset value of the Company
after the refund would be less than seventy-five  thousand dollars ($75,000) the
Company  shall  make a pro  rata  refund  of all  unused  offering  proceeds  to
investors. The shares were sold for $.10 per share.




                                   19

<PAGE>


                                  NIGHTINGALE, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                                               Continued

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

4. Related Party Transaction

The Company has entered into an oral agreement with its president  providing for
the use of a portion of his home as a  temporary  office for the  Company  until
such time as the Company needs additional  facilities.  The Company will not pay
rent for the use of such facilities.

The Company  received  advances from  officers,  stockholders  and entities they
control.  As of December  31, 1996  $98,259 was due to related  parties  with no
repayment  terms and interest at 10%.  Accrued  interest due to related  parties
totaled $27,683 at December 31, 1996.


5. Income Taxes

The difference between income taxes at statutory rates for 1996 and 1995 and the
amount  presented  in the  financial  statements  is  the  increase  in the  tax
valuation  allowance  of  approximately  $3,000,  which  offsets  the income tax
benefit of the operating loss.

       Deferred tax assets consist of the following:

                                            1996        1995
                                        ------------------------

          Operating loss carryforward$     42,000    $ 39,000
          Valuation allowance             (42,000)    (39,000)
                                        ------------------------
                                          $    -     $    -
                                        ------------------------

The Company has net operating loss carryforwards of approximately $123,000 which
begin to expire in 2002. The amount of net operating loss  carryforward that can
be used in any one year will be limited by the  applicable tax laws which are in
effect at the time such carryforward can be utilized and any significant changes
in the ownership of the Company.




                                   20

<PAGE>


                                 NIGHTINGALE, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                                               Continued

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



6. Going Concern

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going  concern.  Because of significant  losses,  the
excess of current  liabilities over current assets,  and stockholders'  deficit,
the  Company's  ability to continue as a going concern is dependent on attaining
future profitable operations, and obtaining additional financial and/or capital.

As shown in the statement of operations,  the Company had  cumulative  losses of
$122,800  as of  December  31,  1996.  Management  of the  Company is  currently
following  a plan to attempt  to  resolve  these  uncertainties.  The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.







                                   21

<PAGE>




ITEM 8. CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING AND
FINANCIAL DISCLOSURE

   The Company has not experienced any disagreement with its accountants.




                                   22

<PAGE>



                                PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE
COMPANY; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

   A. Identification of Directors and Executive Officers

   The  following  individuals  are the current  officers  and  directors of the
Company and will serve for one year or until  their  respective  successors  are
elected and qualified. They are:

   Name             Age                        Position

William Grilz       38                         President/Chairman of the
                                               Board of Directors

Michael Hendry      45                         Director

David Knudson       37                         Secretary/Treasurer/Director

     William Grilz. Mr. Grilz has been a Secondary School teacher in Ogden, Utah
since 1981. He has been  assistant  marketing  and  promotion  director of Weber
State  College in Ogden,  Utah since  1985.  Mr.  Grilz  earned his  Bachelor of
Science  Degree in Physical  Education from Weber State College in 1981, and his
Master's Degree in Education from Utah State University in 1986. He received his
K-12 Administration Degree in1996 from Utah State University.

     Michael  Hendry.  Mr. Hendry is, and has been since 1979,  the President of
Mountain View Title & Escrow Co., a privately held firm located in Ogden,  Utah.
From 1976 to 1979,  Mr.  Hendry was a title  searcher  and  examiner  at Western
States Title,  located in Salt Lake City,  Utah.  Mr. Hendry earned a Bachelor's
degree from Utah State University where he majored in marketing. He has been the
president  of the Utah Land Title  Association  since 1987.  The Utah Land Title
Association is a title industry non-profit association.

     David Knudson.  Mr. Knudson has worked as a business consultant since 1985.
He earned his B.S. Degree in Finance from Weber State College in 1984 and a B.S.
Degree in  Information  Systems and  Technologies  at Weber State  University in
1995.  He has been an  officer  and  director  of  several  small  publicly-held
"blind-pool" companies. Mr. Knudson is also employed as an adjunct professor and
from 1992 to 1995 was employed as a computer  information  systems consultant at
Weber State University.

     B. Significant Employees and Promoters.  There are no significant employees
of the Company.  Shareholder  Mark A.  Scharmann may be deemed a promoter of the
Company.


                                   23

<PAGE>


Mr.  Scharmann has been a private  investor and business  consultant  since
1981. Mr.  Scharmann  became involved in the consulting  business  following his
compilation and editing in 1980 of a publication  called Digest of Stocks Listed
on the Intermountain Stock Exchange.  In 1981 he compiled and edited an 800 page
publication  called the OTC Penny  Stock  Digest.  Mr.  Scharmann  has  rendered
consulting   services  to  public  and  private   companies   regarding  reverse
acquisition  transactions and other matters. Mr. Scharmann was vice president of
OTC Communications,  Inc. from March 1984 to January 1987. From 1982 to 1995, he
was the  president  of Royal Oak  Resources  Corporation.  Mr.  Scharmann is the
President of Norvex, Inc., a blank check company. Mr. Scharmann has assisted the
Company in looking for and analyzing potential  acquisitions.  Mr. Scharmann has
been an officer and director of several blind pool companies.

     C.    Family Relationships. None.

     D.    Other:  Involvement in Certain Legal Proceedings

     There have been no events under any bankruptcy act, no criminal proceedings
and no judgments or  injunctions  material to the  evaluation of the ability and
integrity of any director or executive officer during the past five years.

     E.    Compliance with Section 16(a).

     The Company is not subject to Section 16 of the Exchange Act.

ITEM 10.  EXECUTIVE COMPENSATION

     The following table sets forth the aggregate cash  compensation paid by the
Company for services rendered during the last three years to the Company's Chief
Executive Officer.

<TABLE>
<CAPTION>

                          SUMMARY COMPENSATION TABLE

                              Long Term Compensation

                    Annual   Compensation                        Awards          Payouts
(a)            (b)   (c)       (d)             (e)          (f)         (g)        (h)        (i)
                                              Other                                           All
Name and                                      Annual      Restrict     Option      LTIP      Other
Principal            ($)       ($)         Compensation    Stock        SAR's     Payouts   Compensa-
Position       Year Salary    Bonus            ($)         Awards($)    (#)        ($)       tion ($)
<S>            <C>  <C>       <C>            <C>           <C>        <C>         <C>        <C>

William Grilz  1996 $ -0-     $ -0-          $ -0-         $ -0-      $ -0--      $ -0-      $  -0-
President, CEO 1995 $1,124-   $ -0-          $ -0-         $ -0-      $ -0--      $ -0-      $  -0-
and Chairman   1994 $ -0-     $ -0-          $ -0-         $ -0-      $ -0--      $ -0-      $  -0-

</TABLE>


                                   24

<PAGE>


      No options,  stock appreciation  rights or long-term incentive plan awards
were  issued or granted to the  Company's  chief  executive  officer  during the
fiscal years ended  December 31, 1996,  1995 and 1994.  As of December 31, 1996,
the end of the Company's  last fiscal year,  the Company's  management  owned no
options or stock appreciation  rights.  Accordingly,  no tables relating to such
items have been included in this Item 10.

      Each  officer  and  director  will be paid a  maximum  of $20 per hour for
actual  hours  devoted to the  Company's  business,  estimated  not to exceed an
aggregate of $5,000 per year for all officers as a group. Officers and directors
will be reimbursed for actual  out-of-pocket  expenses incurred on behalf of the
Company. It is currently  estimated that officer and director  compensation will
not exceed  the rate of $5,000  per year for all  officers  and  directors  as a
group,  until  such time as the  Company  may  require  full or  extensive  time
commitments from any officer or director. Except as noted above, the Company has
no agreement or understanding,  express or implied, with any officer or director
or any other person  regarding  employment with the Company or compensation  for
services. For the year ended December 31, 1996, the Company paid no compensation
to management or outside consultants for services rendered to the Company.

      The Company has no  retirement,  pension,  profit  sharing or insurance or
medical  reimbursement  plans  covering its officers and  directors and does not
contemplate implementing any such plan at this time.

      No advances  have been made or are  contemplated  by the Company to any of
its officers or directors.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      A.  Security Ownership of Certain Beneficial Owners

      The following  persons are known to the Company to be the beneficial owner
of more than 5 percent of the Company's voting stock as of September 30 1996:


                                 Number of
                                 Shares
    Name                          Owned           Percent


William Grilz(1)(2)               125,000         12.50%
2232 Eastwood Blvd.
Ogden, UT  84403
 President/Director



                                   25

<PAGE>


                                 Number of
                                 Shares
    Name                          Owned           Percent


Michael Hendry(1)(2)              200,000         20.00%
1862 East 1900 North
Layton, UT  84040
 Director

David Knudson (1)(3)                     -0-         0%
2331 East 1200 North
Layton, UT 84040
 Secretary/Director

Mark Scharmann(2)                 625,000         62.50%
1661 Lakeview Circle
Ogden, UT  84403

A. O. Headman, Jr.(2)              50,000          5.00%
960 Northcliffe Drive
Salt Lake City, UT 84103

ALL OFFICERS AND DIRECTORS
AS A GROUP (3 INDIVIDUALS)        325,000         32.500%
                                  -------        --------
ALL SHAREHOLDERS AS A           1,000,000        100.00%
                                =========        =======
GROUP


     (1) These individuals are the officers and directors of the Company and may
     be deemed  "parents"  and  "promoters"  of the  Company as those  terms are
     defined in the Rules and Regulations  promulgated  under the Securities Act
     of 1933, as amended.

     (2) There are  currently  1,000,000  shares of the  Company's  common stock
     issued and outstanding. In addition to the shares owned by the above-listed
     shareholders,  such  shareholders  each own one Class "A"  Warrant  and one
     Class "B"  Warrant  for each  share of common  stock  owned.  The Class "A"
     Warrants are  exercisable at $.25 per shares and the Class  "B"Warrants are
     exercisable  at $.50  per  share  Although  these  warrants  are  currently
     exercisable,  there  is no  market  for  the  Company's  common  stock  and
     therefore,  there is no current  value to such  Warrants and it is unlikely
     that they will be exercised until and unless there is a public market.

     (3) The  Company has  granted  Mr.  Knudson an option to  purchase  100,000
     shares of the  Company's  common  stock at a price of $.10 per share.  Such
     option expires December 31, 1997.


                                   26

<PAGE>


     All shares are held beneficially and of record and each record  shareholder
has sole voting and investment  power.  The Company sold 2,000,000  Units of its
securities in its public offering.  However, pursuant to Rule 11.1 as adopted by
the Utah Securities Division,  none of such Units have been issued. (See "Item 1
- Business.")

     B.    Security Ownership of Management.  See Item 11(a) above.

     C. Changes in Control.  No changes in control of the Company are  currently
contemplated,  except as described in Item 1. The Company is seeking  mergers or
acquisitions which, when consummated,  will result in a change of control of the
management  of the  Company  as well as a change in the  voting  control  of the
outstanding securities of the Company.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     Since 1993, the Company has borrowed money from Troika Capital  Investment,
Inc. As of December 31, 1996, the amount due Troika Capital Investment, Inc. for
principal and interest was $125,942.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

     A.    Exhibits.

     3.1 Certificate of Incorporation - incorporated by reference to Exhibit 3.1
to Registration Statement on Form S-18 (SEC File No. 33-23429-D)

     3.2 Bylaws -  incorporated  by  reference  to Exhibit  3.2 to  Registration
Statement on Form S-18 (SEC File No. 33-23429-D).

     B. Form 8-K. In December  1996 the Company  filed a Form 8-K in  connection
with the extension of the exercise  period of its Class "A" and Class "B" Common
Stock Purchase Warrants to December 31, 1997.



                                   27

<PAGE>



                               SIGNATURES


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

                                         NIGHTINGALE, INC.


                                         By /s/ William Grilz
                                                William Grilz
                                                Principal Executive Officer


                                         By /s/ David Knudson
                                                David Knudson
                                                Secretary/Treasurer
                                                Principal Financial Officer

Dated: April 10, 1997


     Pursuant to the requirements of the Securities Act of 1934, this Disclosure
Statement has been signed by the following  persons in the capacities and on the
dates indicated:


    Signature                       Title               Date


/s/ William Grilz                  President           April 10, 1997
William Grilz                       and Director


/s/ Michael Hendry                 Director            April 10, 1997
Michael Hendry


/s/ David Knudson                  Secretary/Treasurer April 10, 1997
David Knudson                       and Director



                                   28