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, 1997

                                         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)
               ------------------                                 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, 1997 were
$10,563.

      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, 1997, and as of June
22, 1998, 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.

      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.

      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,  1997,  a total of $211,510  was held in the Rule
164-11-1 Escrow Account.

                                      3

<PAGE>



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


                                      4

<PAGE>



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, 1997

                                    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, 1997 and June 22, 1998,  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 ending
twelve  months  thereafter,  and one "B" Warrant to purchase one share of Common
Stock at

                                      6

<PAGE>



$.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,  1998.  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,  1997,  the Company had total assets of
$211,798 which included $211,510 of restricted cash. Therefore,  the Company had
essentially  no usable cash as of December 31, 1997 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, 1997,  the Company
owed  affiliates  $150,928.  As a result of the  Company's  lack of  liquid  and
useable capital, the company's affiliates have loaned money to the Company on an
as needed basis to fund professional fees, filing fees,

                                      7

<PAGE>



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 $10,563 for the
year ending  December 31, 1997 compared with total interest income of $9,661 for
the year ending  December 31, 1996.  Total expenses for the year ending December
31, 1997, were $25,201 as compared with $17,861 for the year ending December 31,
1996.  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 $14,638 for the year ending  December 31, 1997 compared with a
loss of $8,200 for the year ending December 31, 1996.

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 - 1997

      Balance Sheet
        December 31, 1997

      Statement of Operations
        Years ended December 31, 1997 and 1996

      Statement of Changes in Stockholders' Deficit
        From Inception January 9, 1988 through December 31, 1997

      Statement of Cash Flows -
        Years ended December 31, 1997 and 1996

      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, 1997, 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, 1997.  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,  1997,  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, 1997, in
conformity with generally accepted accounting principles.

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

                                          TANNER + CO.


Salt Lake City, Utah
January 25, 1998

                                      10

<PAGE>


                                                       NIGHTINGALE, INC.
                                            (A Development Stage Company)


                                                           Balance Sheet

                                                       December 31, 1997
------------------------------------------------------------------------------






         Assets

Current assets:
   Cash                                                     $        288
   Restricted cash held in escrow                                211,510
                                                            ------------

            Total current assets                            $    211,798
                                                            ------------

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

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

Current liabilities:
   Accounts payable and accrued liabilities                 $        691
   Advances from related parties                                 150,928
   Common stock units subscribed                                 177,017
                                                            ------------

            Total current liabilities                            328,636
                                                            ------------

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             (137,438)
                                                            ------------

            Total stockholders' deficit                         (116,838)
                                                            ------------

            Total liabilities and stockholders' deficit     $    211,798
                                                            ------------






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


See accompanying notes to financial statements.
                                   11

<PAGE>


                                                       NIGHTINGALE, INC.
                                           (A Development Stage Company)

                                                 Statement of Operations

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






                                                             Cumulative
                                        1997        1996      Amounts
                                    ------------------------------------

Revenues - interest                 $     10,563    $  9,661  $   75,928

General and administrative expenses       25,201      17,861     213,366
                                    ------------------------------------

   Loss before income taxes              (14,638)     (8,200)   (137,438)

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

   Net loss                         $    (14,638)   $ (8,200) $(137,438)
                                    ------------------------------------

   Net loss per share                          $           $           $
                                    ------------------------------------






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


See accompanying notes to financial statements.
                                   12

<PAGE>


                                                       NIGHTINGALE, INC.
                                             (A Development Stage Company)

                                        Statement of Stockholders' Deficit

             January 9, 1988 (Date of Inception) Through December 31, 1997
------------------------------------------------------------------------------




                                                     Deficit
                                                   Accumulated
                                        Additional  During the
                       Common Stock       Paid-In  Development

                  ----------------------
                    Shares      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

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



                
                                                      Deficit
                                                    Accumulated
                                        Additional   During the
                       Common Stock       Paid-In   Development
                  ---------------------
                    Shares      Value     Capital      Stage     Total
                  ------------------------------------------------------

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

Net loss                    -          -          -    (14,638)  (14,638)
                  ------------------------------------------------------

Balance,
December 31, 1997   1,000,000   $  1,000   $ 19,600  $(137,438)$(116,838)
                  ------------------------------------------------------



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


See accompanying notes to financial statements.
                                   14

<PAGE>


                                                        NIGHTINGALE, INC.
                                            (A Development Stage Company)

                                                 Statement of Cash Flows

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





                                                             Cumulative
                                         1997        1996      Amounts
                                      ----------------------------------
Cash flows from operating activities:
   Net loss                           $  (14,638)  $(8,200)  $  (137,438)
   Adjustments to reconcile net loss to
     net cash used in operating activities:
      Amortization                           -          -          1,350
      Increase (decrease) in accounts
        payable and accrued liabilities      121      (667)       19,160
                                      ----------------------------------
            Net cash used in
            operating activities         (14,517)   (8,867)     (116,928)
                                      ----------------------------------

Cash flows from investing activities:
 Increase in advances from related parties 24,986   18,413       132,458
 Decrease in restricted cash held in      (10,406)  (9,661)     (211,509)
 escrow
 Increase in organization costs               -         -         (1,350)
                                      ----------------------------------
            Net cash provided by (used in)
            investing activities           14,580       8,752    (80,401)
                                      ----------------------------------

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

            Net increase (decrease) in         63        (115)       288
cash

Cash, beginning of period                     225         340          -
                                      ----------------------------------

Cash, end of period                   $       288   $     225   $    288
                                      ----------------------------------




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


See accompanying notes to financial statements.
                                   15

<PAGE>


                                                       NIGHTINGALE, INC.
                                           (A Development Stage Company)

                                                Statement of Cash Flows
                                                              Continued

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





Supplemental disclosure of cash flow information:


                                                             Cumulative
                                         1997        1996      Amounts
                                      ----------------------------------

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

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






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


See accompanying notes to financial statements.
                                   16

<PAGE>


                                                       NIGHTINGALE, INC.
                                           (A Development Stage Company)

                                           Notes to Financial Statements

                                                       December 31, 1997
------------------------------------------------------------------------------


Summary of     Organization.
Significant    The Company filed articles of incorporation October 8, 1987 to
Accounting     purchase,  sell and invest in new  products,  technologies  and  
Principles     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.


               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.


               Earnings  Per  Common  and  Common  Equivalent  Share.
               The  computation  of basic per common  share is computed  using
               the  weighted  average  number of shares outstanding during the
               year.


               The computation of diluted  earnings per common share is based on
               the weighted average number of shares outstanding during the year
               plus common stock equivalents which would arise from the exercise
               of stock  options and  warrants  outstanding  using the  treasury
               stock  method and the average  market  price per share during the
               year.  Common stock  equivalents  are not included in the diluted
               earnings per share calculation when their effect is 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.


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


                                   17

<PAGE>


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

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



1. Summary of  Concentration of Credit Risk.
   Significant The Company maintains its cash in bank deposit accounts which, at
   Accounting  times, may exceed federally insured limits.  The Company has not
   Principles  experienced any losses in such account and believes it is not
   Continued   exposed to any significant credit risk on cash and cash
               equivalents.

2. Going       The accompanying financial statements have been prepared assuming
   Concern     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 $137,438 as of December 31, 1997. 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.



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


                                   18

<PAGE>


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

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




3. Common      The  Company has closed but not  completed  a public  offering on
   Stock Units Form  S-18  in  accordance  with  the  Securities  Act of 1933 of
   Subscribed  2,000,000  units as of September  1989. Each unit consists of one
   and         share of the Company's  common stock, one "A" warrant and one "B"
   Restricted  warrant. Each "A" warrant allows the holder to purchase one share
   Cash        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
               1997, the Company  extended the  expiration  date of both the "A"
               warrants and "B"  warrants to December  31, 1998.  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.


4. Related     The Company has entered into an oral agreement with its president
   Party       providing  for the use of a  portion  of his home as a  temporary
   Trans-      office  for the  Company  until  such time as the  Company  needs
   actions     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, 1997 $112,629 was due
               to related  parties with no repayment  terms and interest at 10%.
               Accrued  interest  due to  related  parties  totaled  $38,299  at
               December 31, 1997.


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


                                   19

<PAGE>


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

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




5.  Income     The difference  between  income taxes at statutory  rates for the
    Taxes      years ended  December 31, 1997 and 1996 and the amount  presented
               in the financial  statements is the increase in the tax valuation
               allowance of approximately  $5,000,  which offsets the income tax
               benefit of the operating loss.

               Deferred tax assets consist of the following:


                                                     December 31,
                                               ------------------------
                                                   1997        1996
                                               ------------------------

                 Operating loss carryforward   $ 47,000    $ 42,000
                 Valuation allowance            (47,000)    (42,000)
                                               ------------------------

                                               $      -    $      -
          
                                               ------------------------



               The Company has net operating loss carryforwards of approximately
               $138,000  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.


6.  Earnings   In February 1997, the Financial Accounting Standards Board issued
    Per        Statement of Financial  Accounting  Standards  No. 128 (SFAS 128)
    Share      "Earnings Per Share," which  requires  companies to present basic
               earnings per share (EPS) and diluted earnings per share,  instead
               of the primary and fully diluted EPS as previously required.  The
               new standard also requires additional informational  disclosures,
               and makes certain  modifications to the previously applicable EPS
               calculations  defined in Accounting  Principles Board No. 15. The
               new  standard is  required to be adopted by all public  companies
               for  reporting  periods  ending  after  December  15,  1997,  and
               requires restatement of EPS for all prior periods reported.





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


                                   20

<PAGE>


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

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



6.  Earnings   Earnings per share information is as follows:
    Per
    Share
    Continued
                                Year Ended
                               December 31,            Cumulative
                          -----------------------
                             1997        1996           Amounts
                          -----------------------------------------

     Net loss available to
      common stockholders  $   (14,638) $    (8,200)   $ (137,438)
                          -----------------------------------------
     
     Average equivalent shares
      (basic and diluted)  $ 1,000,000  $  1,000,000   $  977,000
                          -----------------------------------------

     Net loss per share (basic
     and diluted)          $     (.01)  $      (.01)   $    (.14)
                          -----------------------------------------




7. Fair Value  None of the Company's financial  instruments are held for trading
  of Financial purposes.  The  Company  estimates  that  the  fair  value of all
  Instruments  financial  instruments  at  December  31,  1997,  does not differ
               materially  from the aggregate  carrying  values of its financial
               instruments  recorded  in the  accompanying  balance  sheet.  The
               estimated fair value amounts have been  determined by the Company
               using available  market  information  and  appropriate  valuation
               methodologies.  Considerable judgement is necessarily required in
               interpreting  market data to develop the estimates of fair value,
               and, accordingly, the estimates are not necessarily indicative of
               the amount that the  Company  could  realize in a current  market
               exchange.

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


                                   21

<PAGE>


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

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






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

     The Company has not experienced any disagreement with its accountants.


                                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       39                         President/Chairman of the
                                               Board of Directors

Michael Hendry      46                         Director

David Knudson       38                         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 in1997 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.


                                   22

<PAGE>


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

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



     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
1996.  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 1996 was employed as a computer  information  systems consultant at
Weber  State  University.  Mr.  Knudson is an officer  and  director  of Pacific
Alliance Corporation, an inactive publicly-held corporation.

     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. 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 1996, 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.  Mr.  Scharmann is
the  President  and a director  of Pacific  Alliance  Corporation,  an  inactive
publicly-held Company.

     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.

                                   23

<PAGE>


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

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





                          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             ($)    ($)   Compen-   Stock    SAR's   Payouts  Compen-
Position       Year  Salary  Bonus sation($) Awards($) (#)      ($)    sation($)

William Grilz  1997  $1,220  $ -0- $ -0-     $ -0-     $ -0--  $ -0-    $ -0-
President, CEO 1996  $ -0-   $ -0- $ -0-     $ -0-     $ -0--  $ -0-    $ -0-
and Chairman   1995  $1,124  $ -0- $ -0-     $ -0-     $ -0--  $ -0-    $ -0-



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

      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, 1997,  1996 and 1995.  As of December 31, 1997,
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, 1997, 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


                                   24

<PAGE>


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

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



      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 1997:


                                 Number of
                                 Shares
    Name                          Owned           Percent


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

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                            =========        =======


                                   25

<PAGE>





     (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, 1998.

     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, 1997, the amount due Troika Capital Investment, Inc. for
principal and interest was $150,928.

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).


                                   26

<PAGE>



     B. Form 8-K. In December  1997 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, 1998.


                                   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:  June ___, 1998


     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           June _____, 1998
William Grilz                       and Director


/s/ Michael Hendry                  Director            June _____, 1998
Michael Hendry


/s/ David Knudson                   Secretary/Treasurer June _____, 1998
David Knudson                       and Director


                                   28